NAPEO
Amid an ever-shifting set of challenges — from rising costs to changing consumer preferences and generational shifts in the workplace — employers now face a “permacrisis.” The formerly unprecedented has become the norm, ramping up pressure on employers to devise new strategies to safeguard their talent and grow their business.
If you’re struggling with low close rates or stalled deals, be brutally honest with yourself by using these three criteria for each opportunity in your pipeline.
Leveraging actuarial skills and data-driven strategies is like having a GPS for your sales journey. It helps PEOs target the right markets, optimize profitability, tailor pricing, and continuously improve.
In today’s rapidly evolving business landscape, PEOs must expand their businesses to thrive and remain competitive. As companies continue to seek efficient and cost-effective solutions for their HR needs, PEOs have a unique opportunity to leverage their expertise and comprehensive services to capture a larger market share.
Just as the HR landscape has shifted significantly in the last 25 years, so has the value of a PEO’s services to prospective clients. Two decades ago, most prospective clients came to us for one reason. They were motivated by the cost savings a PEO could provide on employee benefits.
Podcasting, sales playbooks, and omni-channel integration represent three impactful strategies that can enhance engagement, streamline processes, and improve customer experiences.
Here are 7 recommendations for having better communications to gain deeper, authentic relationships and more client relationships along the way.
While marketing and sales serve distinct functions, their objectives are essentially the same: to attract, engage, and retain clients. When these functions operate in silos, it can lead to inefficiencies, missed opportunities, and, ultimately, poor client experience.
Although there are over 500 PEOs in the U.S. assisting more than 200,000 small businesses, the landscape has changed. Changes in human resources, labor laws, job-searching processes, technology and talent demand have all impacted how PEOs provide solutions and help employer clients.
We live in a tech era where digital marketing is the fastest way for businesses to reach their target audience. 56% of organizations are changing their business models to capitalize on digital opportunities. How can PEOs capitalize on digital marketing?
To remain competitive and keep clients, PEOs must address these critical gaps in HR analytics, platform scalability and data security. By enhancing their service offerings in these areas, PEOs will better meet the evolving needs of their HR clients, ensuring sustained strategy, scale, security and satisfaction.
By educating minority SMBs about the benefits and intricacies of PEO partnerships, we not only foster a deeper understanding of our services but also cultivate trust and transparency.
The ultimate objective of every marketer is to produce a meaningful and measurable ROI. Unfortunately, having that objective and actually achieving that objective are two very different things. As with any goal and objective, there are three key elements to success – a strategy, a plan, and disciplined execution. But keeping your fingers crossed isn’t a sustainable marketing strategy. And hope isn’t an executable plan.
Before setting out to develop a strategy and plan, it helps to understand where you want your plan to take you. What’s the goal? And with marketing, things like new websites, more social media engagement, or even a boat load of new leads shouldn’t be your ultimate goal. The goal should be sales and top-line revenue growth.
Writing a big revenue number on your conference room white board may help rally your team for growth, but it won’t help you build a marketing strategy and plan. In fact, it can actually be a little intimidating. So how do you achieve such a goal? How do you even start?
The best way to start is to break the revenue goal into smaller objectives by reverse engineering the sales and marketing process. Reverse engineering is exactly as it sounds. It’s the process of working backwards from the conclusion to understand how that goal can be reached.
STEP ONE: SET CLEAR REVENUE GOALS
Setting achievable revenue targets and comprehending their sources is crucial. The first step is to determine the proportion of revenue that needs to come from new business as opposed to the existing customer base. Knowing this target number is the starting point to reverse engineering your marketing strategy.
STEP TWO: HOW MANY NEW CUSTOMERS NEED TO BE SIGNED?
To determine the number of new customers required to meet your revenue objective, divide the target for new business revenue by the average size of a new deal. This process will require some research into the closed deals in your CRM over the last few years. Throw out any outliers (i.e., unusually large or small deals) to determine the average revenue per deal.
STEP THREE: HOW MANY PROPOSALS NEED TO BE PRESENTED?
Use your team’s average closing percentage to determine the number of proposals that will need to be presented. How many proposals did your team pitch to potential clients last year? What percentage of those proposals led to successfully closed deals? Often, sales teams tend to overestimate their closing percentages, so thorough research is essential. Again, employing a CRM tool can facilitate transparency and maintain a realistic metrics.
STEP FOUR: HOW MANY SALES QUALIFIED LEADS (SQLS) NEED TO BE GENERATED?
To answer this question, you first need to understand the percentage of Sales Qualified Leads (SQLs) that have historically received a proposal? Not every qualified sales opportunity is guaranteed to receive a one. There are various factors that can cause the sales process to stall (poor timing, decision-maker changes, budgets, etc.). Again, it’s important to understand your team’s historical percentages in order to determine how many SQLs need to be generated to achieve your revenue growth objective.
STEP FIVE: HOW MANY SALES LEADS NEED TO BE GENERATED?
It’s important to understand at all sales leads aren’t equal. Not everyone who “raises their hand“ to demonstrate interest or a desire to learn more warrants the time and attention of your sales team. This becomes clear when you set clear criteria/definitions for lead types and track their conversion from one stage to the next (i.e., “Lead” to “MQL” to “SQL”).
These definitions may help.
A “Lead” is any new contact that’s generated who demonstrates some interest in what your company offers.
An “MQL” (Marketing Qualified Lead) is a “Lead” that fits your target persona criteria. This means they exhibit the characteristics (type of company, size of company, geography, level of decision-maker, etc.) that are similar to that of your current customer base.
A “SQL” (Sales Qualified Lead) is an “MQL” whose behavior or characteristics warrant the immediate attention of a salesperson (i.e., a decision-maker of a target account who views one of your recorded webinars).
Answering the questions outlined in the steps above and understanding the conversion ratios between each category will help you determine the quantity of the various lead types (Lead, MQL, and SQL) that will yield the number of proposals and closed deals required to drive your revenue goals.
With such clear objectives it will now make sense to plan the tactics and campaigns that will drive the required marketing output. Where will the new leads come from?
This process of reverse engineering not only aids in setting attainable marketing objectives but also allows each aspect of the calculation to serve as ongoing key performance indicators (KPIs) throughout the year. By tracking and comparing your conversion rates against historical and benchmark data, you can continuously refine your marketing strategy and develop a pragmatic ROI model for future marketing investments.
By investing in expertise, tailoring solutions, educating the market, highlighting benefits, showcasing success stories, and finding unique and personalized differentiations, PEOs can position themselves as indispensable partners for businesses seeking to navigate complex regulatory landscapes with confidence.
With proper planning, you can keep the sales momentum through the “perceived” slow times. The key is to be consistent, and you will keep the sales momentum going with a healthy pipeline of qualified opportunities.
In today’s hyper-competitive business landscape, client experience (known as “CX” for short) has become the foundation of success across all industries, and PEOs are no exception. And when it comes to differentiating your PEO as a long-term partner for your clients and their teams, CX plays a non-negotiable role in your success – regardless of geography, size, or years in business.
For years, the PEO industry has empowered businesses of all sizes to navigate HR complexities. However, in today’s dynamic market, organizations are ever evolving, and PEOs are not an exception. As companies adapt to technological disruptions, a global market, and other challenges, professional employer organizations are also changing to meet their clients’ needs.
As we delve into the artificial intelligence era, there’s one pressing question in all our minds—what does the future hold for PEOs?
AI is not the only factor that is going to revolutionize the industry; changing workforce demographics, regulatory landscapes, and sustainability are some of the several factors that can influence the industry. These factors are not challenges; they can unlock opportunities for growth and innovation.
TECHNOLOGY
Technology integration is one of the trends that is here to stay. AI, data analytics, and machine learning can transform a business into a tech-driven superpower. How can PEOs leverage these tools to streamline their operations? PEOs can:
AI-powered algorithms can also help small businesses find PEOs with just a few clicks. Depending on a business’s size, industry, and needs, AI-enabled platforms can link them to the ideal PEOs for them.
DIGITAL MARKETING
Thanks to digitalization, marketing has evolved from a product/service-centric approach to a customer-centric approach. If used effectively, digital media platforms can help PEOs personalize their marketing efforts and reach a wider target audience with minimal effort.
The integration of AI, machine learning, and data analytics into marketing makes it easier for PEOs to find small businesses that precisely match their ideal customer profile (ICP). Through AI-enabled platforms, PEOs can identify qualified leads in just a few clicks. They can also generate a quote within minutes and increase their conversion rates.
From email campaigns to social media marketing, the PEO of tomorrow needs to have a holistic marketing approach to become an industry leader.
CHANGING WORKFORCE
A study by Glassdoor revealed that, in early 2024, Gen Z will replace Baby Boomers as the largest generation in the full-time workforce. How is this change relevant to PEOs? With a changing workforce comes new demands. For instance, the four-day workweek has gained overwhelming support from the younger generations. Understanding the workforce’s needs will help PEOs improve employee engagement and retention.
REMOTE AND HYBRID WORK
The COVID-19 pandemic accelerated the adoption of remote and hybrid work. It’s been three years since the pandemic, and remote work is still popular among employees. From virtual onboarding and training programs to digital collaboration platforms, PEOs can play a crucial role in helping businesses navigate the complexities of remote work. Providing innovative solutions for managing distributed global teams effectively could make a PEO indispensable to their clients.
GIG ECONOMY
The gig economy is another workforce shift that needs to be on a PEO’s radar. Statista research projects that 50.9% of the total US workforce will be freelancers in 2027. PEOs can expand their reach and add value to this growing segment of the workforce.
GLOBAL TEAMS
With the world becoming a global market, organizations have employees working from different parts of the globe. Modifying their services to manage international employees, and ensure compliance in various countries can expand a PEO’s scope and help them scale up.
REGULATORY COMPLEXITY
Employment, data privacy, and compliance laws are constantly changing. PEOs, with their expertise in HR compliance, are well-positioned to help businesses navigate this complex regulatory landscape. Staying ahead of legislative changes and providing tailored compliance solutions is crucial for a PEO’s success.
CYBERSECURITY AND DATA PRIVACY
We live in a digital age where businesses need to modify their processes to comply with data privacy laws. Since PEOs have sensitive HR data, investing in secure technology infrastructure is essential to building trust and maintaining compliance.
SUSTAINABILITY AND SOCIAL RESPONSIBILITY
Sustainability and social responsibility are being embraced by several businesses to play their part in building a better future. PEOs could implement sustainable practices through paperless HR practices, employee well-being initiatives, and contributing to local communities.
CLIENT-CENTRIC OPERATIONS
Most businesses prefer customized solutions, rather than a cookie-cutter approach. Modern PEOs partner with their clients to understand their unique needs and industry trends and offer services that align with their strategic goals.
Effective communication and transparency in pricing are also major factors in strengthening client relationships.
The future of work is fluid and unpredictable. PEOs need to be agile and adaptable, readily responding to evolving regulations, workforce trends, and client needs. Continuous learning and innovation could help us stay ahead of the curve.
As businesses manage the complexities of the modern workplace, PEOs will continue to serve as their trusted partners. Embracing digital transformation, adapting to remote work environments, and fostering a culture of innovation play a major role in the industry’s growth.
Understanding and adapting to these trends is essential to not just survive, but to thrive in an ever-changing landscape. It can also assist us in shaping the future of work and redefining the HR landscape for years to come.
As with mastering anything; a golf swing, a musical instrument…any worthy endeavor…training should be continuous and repetitive. The following is an outline of a 30 – day training plan – the operative word here is outline. You will need to make it your own, in content and timeframe – the goal is to help you with the heavy lifting of designing your own plan to increase engagement.
The results of NAPEO’s PEO Pulse Survey for the third quarter of 2023 show that PEOs continue growth, although at a slower pace than previous quarters.
During our Annual Conference and Marketplace last month, we unveiled the findings of our latest white paper.
Two different sales approaches follow. One leads to fast growth and chaos while the other leads to slow growth and stability. One is probably too hot, the other perhaps too cold. May you find what is “just right” for your company.
I have been fortunate to be involved in two successful PEOs with dramatically different sales approaches. In the mid-1990s when I joined the industry, our start-up PEO’s mission was to quickly amass a large village of worksite employees (WSE), and then to jettison them to another PEO that could service them. All energies went into building a successful sales machine. From a start-up with no clients and no industry knowledge, we grew to 12,500 worksite employees and number one in our market in two and a half years. Seven years later, we had 45,000 WSE with offices throughout the west. Our close ratio was above 50%, the median time from first meeting to closed contract was seven days, 25% signed within 24 hours of the first meeting, and 75% closed within 30 days. The internal salesforce ranged from 3 to 6 reps, with two selling vice presidents. Constant, fear driven, heavy pressure, permeated the sales team. So did heavy incentives. A deal a week was expected. Many achieved that and even the average performers were doing over 30 a year. The result was rapid growth and constant internal stress.
Most sales reps in our industry talk about how wonderful the industry is and quite frankly the prospective client does not care. We never mentioned the PEO industry. We simply asked open-ended questions to find one area of pain. When asked, what do you hate about your business? The answer is almost always something we provide. If we could solve that pain point, would they be willing to look at numbers? Research on the company was done before the meeting, not after. If the owner agreed to look, we had a prepared contract with us. There may only be one meeting and one chance with an owner. Get them to commit and delegate. Then get the owner and the sales rep out of the way and get the right people on both sides involved as soon as possible. It was astounding to us that PEOs would let operations people push hard on sales to “do more.” The skill set of finding clients and getting them to commit is markedly different than the skill set of gathering quality information to run a PEO client. The salesperson closed the deal and then got out of the way. Three benefits resulted. First it allowed the salesperson to be more productive in their job. They could hunt and close which was in their wheelhouse. Second, it allowed the operations people for both the client and the PEO to gather the right information. Big incentives for the operations staff to get a client running quickly helps too. The faster they run and the less problems that occur, the bigger the bonus for operations. Third, it established the relationship between client and operations, not the sales rep. If the rep decided to leave after amassing a large book of business, the clients stayed, because they were loyal to operations.
A snowball running downhill is the revenue model of a PEO. It grows as it goes. So do your own math and financial modeling. How much more revenue can you generate by getting that first payroll to run one or two cycles earlier? Decrease the time in this metric and it impacts revenue significantly over time given the high retention rate of a PEO. The numbers may surprise you. After a few payrolls, we would circle back with the client once we knew things were running smoothly. Then we would show them all the other benefits and services that they did not know about when they signed. It worked.
Sounds great, right? But there is a downside. The selling culture works best if established early on. It is difficult to change the operations culture found in most PEOs to a sales culture. It can be done, but heartache and likely turnover will occur. Second, the operations team will almost always be under extreme stress. Clients being engaged without having a full understanding of what they are getting into can be tiresome. It also may be difficult getting information from subordinates in the client company who do not understand what is happening. Internal operations staff may find themselves “reselling” the deal which is not their strength. Combine that with the pressure of getting that first run done quickly and a high-tension atmosphere may result. More mistakes are likely. That first payroll typically results in a phone call with issues and that detracts from the fundamentals of the day-to-day work. This wears down operations people over time. Also, the run rate percentage of new clients will be less than industry norms, but the raw number of clients that run will also likely be higher. Pick your medicine. Goldilocks would likely taste this porridge and think it is too hot.
Another approach is more thorough with front-end discussions and uncovering of needs. Beware that thorough (to some) can also sound like “slow.” This approach includes a discovery call followed by a series of next steps. Step one is software demonstration. This demo may expand into demos of multiple channel partners offered by the PEOs software provider, like time clock or benefit offerings. Then onboarding, orientation, and all that goes with it. Multiple stakeholders in the client company and the PEO become involved. By the time implementation is complete, the client has bought in to the PEO program to a high degree. That first payroll run is smooth, the client is happy, and the PEO operations staff is happy. Healthy growth generally follows. Sounds great. Until you do the math. It is simple…how much money over a few years is left on the table due to the speed of getting that first run? Goldilocks might find this approach too cold.
To find what is “just right” likely combines aspects of each approach. The key? Find what works for your company. Culture is key. If the culture is too slow for your liking, be willing to turn up the heat a little. If you are moving too fast and causing unwanted stress, consider turning the heat down a bit. There exists a sweet spot for every company. May you find what Goldilocks would call “just right.”
In the ever-evolving landscape of marketing, media relations has emerged as a key component of a comprehensive, successful marketing strategy. While the concept of “going viral” on social media certainly captures attention, it is just one aspect of the broader media relations puzzle. Modern media relations is about building strong connections with journalists, influencers, and media channels to effectively disseminate your brand’s stories and expertise.
Culture, engagement, collaboration, and innovation have all experienced drastic changes over the past several years. The move many companies made to a remote or hybrid work environment has created a need for new strategies to achieve the same level of production and employee engagement. This is especially true for marketing and sales teams, which traditionally relied heavily on in-person collaboration and innovation sessions.
When a business leader identifies a problem that needs to be solved, a challenge to overcome, or a need to be fulfilled, their behavior and actions aren’t that different from the way we behave as consumers at home.
