Tag Archives: Sales Management

Navigating Price-Driven Markets

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Negotiations with procurement specialists in large organizations can really be brutal.

More than ever they seem to be driven by a sadistic combination of corporate edicts. These might include: sourcing overseas, reducing commodity costs by some per cent annually, reducing the number of suppliers by 20% and driving to 60-day payable policies – all while achieving the lowest piece-price possible.

These selling conditions define a prototypical “price-driven” market – though I have heard it called other things NSFW.

Sadly, some small B2B firms never actually do anything meaningful about these challenges. Year after year they eke out marginal success by squeezing their prices and margins, repeatedly trying to sell to the same hard-nosed customers, continually targeting the same markets and agreeing to be victimized by abusive procurement conditions.

There are ways to reduce the effects of these challenges. Some of the solutions are quick and some take time to develop. But, one thing is certain, if there is no action taken, there is no improvement likely.

Self-Diagnosis: A Reality Look in the Mirror

Step 1 is understanding what has brought you to this situation. If you are struggling with price-driven markets, one or more of the following statements are likely contributing:

  • Your product offerings and your company actually have no meaningful differentiation
  • You are aimed at the wrong markets and customers
  • You are unable to quantify the economic value you can deliver
  • You are doing a poor job of communicating your economically quantifiable value
  • You have not established true strategic partnerships with your customers

The first step to freedom, is identifying which statement, or combination, is true.

Doing something about it.

Salvation can actually be easier than you might imagine. Here are some paths to consider.

Path 1: Market Refocus

You must focus on markets where your unique product and corporate capabilities have real meaning to customers.

A client of ours had a new product that was significantly price disadvantaged in the general market. Despite this reality, the new business development team was hustling to set up distributors across the country for that general market, betting on corporate approval of a major price reduction to spur sales – when, in fact, corporate was quietly considering shutting the product line down.

Surprisingly, some handful of customers had actually bought this grossly overpriced product – a certain hint that someone was seeing value that others were not. When asked “Why they bought?” those customers explained that the product, even at that exaggerated price, solved a unique set of problems for their situation.

By quickly shifting their sales focus to this market, the business was saved without any change in selling price. In fact, customers in that market requested additional features which eventually lifted the selling price to 4X its original.

Path 2: Understand, Quantify and Communicate Your Unique Economic Value

Everyone in your organization that deals with customers must be able to understand and communicate the economic value of your products.

A client was puzzled by the slowness with which their new product, designed specifically to help customers save substantial amounts of money, was not selling better. The choke point was discovered to be the distributor sales manager who simply did not believe the economic argument. He had quietly avoided promoting that benefit to his distributors, in spite of customer testimonials validating the savings.

A rapid individual re-education was required, followed by a re-training of the distribution sales force. Product sales turned up significantly shortly afterwards.

You cannot assume that your benefits are being accurately communicated. Check the communication choke points.

Path 3: Tell the Whole Story

Your customer cannot make a decision based on anything other than price if that is all she sees. There is much more than price that is critical to the success of a supply relationship. A single-page quote sheet cannot communicate that larger story.

Here are some items to consider. Each can create additional value around the price.

  • Who is on the team you will dedicate to this supply relationship – their names, experience and roles? This information builds trust.
  • What is the detailed schedule, timeline and check points? This information builds credibility.
  • What approach will be used to assure success? What examples of this approach have been successful in the past? This information reduces perceived risk.
  • What is the quality story? This information also reduces perceived risk.

A client of ours increased their bookings by 20% in just one deal using this “whole story” approach.

Path 4: Build a true partnership

A one-salesperson-to-one-procurement specialist link does not define a strong and defensible relationship – even if they play golf once a week and belong to the same ski club. Multiple connection points must be developed: engineering to engineering, quality to quality, customer service to planning, shipping to receiving, manufacturing to manufacturing. The trust that is built up by these multiple open communications channels has real value in terms of problem solving, getting things done and creating a strong tough-to-break bond.

Path 5: Challenge the Chief

I once asked a group of 12 B2B CEOs, during a talk to take out a blank sheet of paper and write down what they perceived as their best product offering – the product that they thought customers should appreciate the most.

I then asked them to identify the value factors delivered by that product. and calculate what economic benefit that ideal customer was likely to receive from that product. Remarkably, they stumbled. None of them could do it in the 15 minutes allotted.

If the CEO can’t do it, how can they expect it of the rest of their team? That kind of understanding and expectation sets the tone for the whole organization from engineering through shipping.

Final Words:

We have offered 5 diagnostic questions and five paths out of the briarpatch of a price-driven market. It will take some serious self-examination and require some analysis and thought, but it is definitely achievable.

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Copyright Jerry Vieira, CMC and The QMP Group, Inc. 2015 All Rights Reserved

If you’d like to learn more about dealing with price-based competition call Jerry Vieira, CMC at 503.318.2696 or email to Jerry@qmpassociates.com. The QMP Website is at www.TheQMPGroup.com and more insights can be found on the subjects of Market Strategy, Business Business Development and Sales at Jerry Vieira’s QMP Insights Blog. If you have an immediate challenge, please communicate it through our Contact Us page.

Reaching the CEO

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Here is a reprint of a recent interview Jerry did with Kevin Price, author, publisher and radio host for the “Price of Business”.  Kevin is a syndicated columnist, both writing for the Huffington Post and appearing on Fox News. The interview explored professional approaches to reaching the CEO of small to midsized firms.

 

Price: Tell me about your firm (number of employees, location, type of companies you work with, etc.).

The QMP Group, Inc. is a Portland-OR-based management consulting firm whose mission it is to help small to mid-size, Business-to Business firms increase their market valuation. We accomplish this by helping them adopt the rigor and disciplines of the QMP (Quality Marketing Process) methodology. That methodology is embodied in our  Marketing & Sales Engine model. We install, repair, replace, align or supercharge whichever of the gears need attention.MarketingandSalesEngine

While The QMP Group itself operates periodically with only one or two employees, we service a wide range of our clients’ needs through close collaboration with highly qualified and experienced consultants of other complementary specialties: Finance, Organizational Development, IT, Operations, Supply Chain Management and Manufacturing.

Price: Tell us your story about reaching C-Level executives to do business?

I started reaching C-Level executives through Thought Leadership, that is, sharing my insights on market strategy through public speaking and writing for business journals. Basically, I was driven to passionately share my beliefs on the subject of the overriding importance or market strategy. I believed then, as I do now, that there is no more important management function than formulating a good market strategy, for the well-being of all stakeholders in a firm: the employees and their families, owners, shareholders, suppliers, customers and the community in which the business resides.

In the early days of my consulting practice I would give a talk at venues where CEOs convened to hear about specific topics of interest. I would give my talk and folks would walk up to me afterward, hand me a business card, and say, “That’s real interesting stuff. I think it might be able to help us. Please give me a call to arrange a time to get together and talk.”

Those introductions led to client engagements. Engagements led to client successes, and successes led to CEO-to-CEO referrals. QMP’s business is still largely maintained through talks and referrals.

One more point about talks. I call talks “Networking from the front of the room”. How else can you get 20 to 80 CEOs and Executives to give you their undivided attention for 45 minutes (with 15 minutes for questions afterwards). Not only that, whoever is sponsoring the venue does all the prep work: food, invitations, scheduling, room set up, etc. There is no more efficient way to reach Executives and CEOs en masse.

Of course, we are not talking about a 45-minute sales pitch here. There is no quicker way to destroy your reputation and credibility as a Thought Leader than trying the hard sell in a talk about insightful business practice. We are talking about a sincere exchange of insights that will help the listener.

Price: Do you know of other examples of businesses being creative in this endeavor?

Let me answer with a story. Several years ago our local chapter of the Institute of Management Consultants convened a members-only working session for the purpose of sharing our personal stories about what we attributed out personal consulting success to. Most of us in the chapter work with the CEOs or high level execs in our client firms.

Naively, I thought that all would say the same thing that I said, namely Thought Leadership – leading to CEO-to-CEO or advisor-to-CEO referrals.

As we went around the room giving each member a chance to tell their own story, I was amazed at the variety of “secret ingredients” of success in reaching CEO’s. Some said their personal network, some said referrals, some said their coaches driving them, some said, believe it or not, cold-calling! Being an engineer I became fixated with finding what could possibly be the common thread in such a diverse set of paths-to-success – and here’s the conclusion I arrived at.

In each case, what the consultant was really saying is, “This is what has worked for me, because this is who I am – naturally.” The individual who said networking is well known in the organization for having and staying connected to a personal and professional network that rivals God’s. The individual that said cold-calling teaches sales and cold-calling techniques for a living.

What I am saying here is that, a person’s path to connecting with a CEO inevitably follows the path of, and leverages, who they naturally are. It builds on what their natural affinity is and how they have channeled it.

A final note on this point: Once you have made your first CEO contacts and built first level successes – the referral machine (CEO-to-CEO or advisor-to-CEO referrals) takes over a fair share of the burden of CEO introductions.

Price: What lessons, if any, do you derive from these stories?

Great Question! Find out who you really are. Discover the thread in your life that is constant, and I believe you will find that it has consistently driven your past successes. Find it then extrapolate it. If that all sounds too esoteric, talk about it with a personal or business coach about your search for the thread. Strengths Finders (the book and the self-assessment) are very helpful. Here’s a link http://strengths.gallup.com/default.aspx.

Remember, your first CEO success can create a flywheel of CEO referrals. So give it all you’ve got. Leave nothing on the field.

Price: Tell us why it is important to for you to pitch to the CEO.

The owner of a privately-held firm is typically its CEO. The firm’s market value is connected directly to that owner’s wallet and net worth – and that individual’s personal wealth (short and long term), and the future of his or her family, are tied to market valuation of the business. Decisions about how to invest to increase that valuation are exclusively the realm of the CEO.

In addition, we are typically executing business process and organizational transformations in our engagements. These process changes have broader and longer term implications on employees, customers and owners, than say, paving the parking lot. The CEO must be involved and actively participate.

Price: What are some unique things you have done to get the attention of CEOs?

CEO’s trust their peers and their advisors. As a consultant, a CEO is not likely to quickly trust you, because they don’t know you. So, getting to CEO’s usually requires a bank shot of trust. A referral from a CEO’s advisor or respected peer is that bank shot of trust.

In turn, for a referral to be made to a CEO by an advisor or peer, that advisor or peer needs to: a) trust you and, b) believe in your expertise, either through personal experience or reputation.

Consultants accomplish this transfer of trust by either; a) demonstrating a track record of success that the CEO’s peer or advisor has witnessed firsthand, or b) building their reputation as substantive Thought Leaders, i.e. speaking and writing on topics germane to the CEO’s circumstance. Those written opinions, talks and successes need to be insightful and substantive.

Your track record and reputation as a Thought Leader, in the minds of a CEOs peer or advisor, is your CEO magnetism.

Price: Tell us about the type of companies with which you like to do business.

We prefer to do business with firms with CEO leaders that are,

1) open-minded,

2) decisive,

3) foster a company culture of accountability and expectations and

4) actively participate in the business.

Formulating an improved market strategy takes knowledge, expertise, analysis and creativity, but more importantly, execution takes real leadership. So, I guess, I am saying the type of leader is more important than the type of company.

Price: What suggestions do you have for others trying to reach CEOs.

Become a Thought Leader. Write, blog and speak to CEOs and CEO advisors.

Build Your Trusted-Advisor Referral Network: Research into how ideas and innovations diffuse into a market place indicates that intra-market network communications (peer-to-peer, or trusted-advisor-to-peer communication) is 13 times more effective in the spread of that idea than mass communications.

Make sure your network knows how to recognize clients you can help:… and, don’t be shy to ask for referrals

Treasure, Preserve, Respect and Thank that Network: Stay in communication, acknowledge and appreciate former clients, advisers and referrers.

Always Act in the Best Interest of Clients: Trusted advisors are trusted because they are transparent and the CEO believes that they are acting in his best interest. Sublimate your needs to the client’s best interest in all that you do. That reputation will me your badge of behavioral honor.

Document your Successes: Measure and record the indicators of your success – and assure they can be validated by references from that engagement

 

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The Key Components of a Thorough Marketing & Sales Audit

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The word audit can strike fear into the heart of almost any person or organization that is its target. “Audit” conjures up images of someone in a position of authority digging through paperwork and records looking for evidence of malfeasance, mistakes, incompetence or non-compliance.

However, when a business performs an audit on their marketing and sales function, they typically just want to answer two basic questions:

  1. What can we do to improve our sales results?
  2. What can we do to improve our marketing and sales ROI?

At its purest intent a marketing and sales functional audit should not conducted to uncover incompetence, to fix blame or to penalize, but rather to discover opportunities to make both marketing and sales more effective. If the motivation of an audit is solely to find a scapegoat or assign blame, the problem is not in the firm’s marketing and sales function, but rather in its culture and leadership.

Step 1: A Quick Starting Point – The Self-Audit

We, at QMP use an 8 dimension, quick 50-question self-audit or self-assessment approach to determine whether there is need for deeper investigation. The output is a simple spider graph which illustrates the impressions that the executive team has of its marketing and sales organizational capabilities and effectiveness.

Figure 1

 

 

Copyright The QMP Group, Inc. 2012 All Rights Reserved

The shape of this figure provides a general idea of where performance gaps are perceived to exist. However, this is a chart which reflects executive impressions and personal observations – not a formal, detailed analysis of processes and capabilities. If the chart reveals high capabilities, but sales performance is actually poor, there is strong misperception among the executive team. But if both the chart output and the firm’s performance are satisfactory, the need for a detailed audit is probably not compelling.

(Click here to request this free self-assessment tool)

Step 2: The Detailed Audit:

If a detailed audit is indicated, the model in Figure 2 provides a framework for conducting that audit. Each of the 8 dimensions of the spider graph will be evaluated within that model.

Figure 2

he Marketing & Sales Engine™

Copyright The QMP Group, Inc 2002 All Rights Reserved

All gears must turn efficiently and together for optimum revenue generation. If any gear is broken or stuck, the engine stalls – and it can only turn as fast as its slowest gear. If a marketing and sales audit is going to identify opportunities for breakthrough or discover where things are malfunctioning, an audit must assess the systemic working of all the gears – even the little ones. One must even include in the audit the oil in the oil pan – which we call Performance Excellence, or the Culture of the firm. A healthy corporate culture can grease, or an unhealthy corporate culture grind to a halt, the firm’s marketing and sales engine.

Auditing the Gold Gear: Market Strategy:

“Even the best soldier becomes a casualty when engaged in unwise battle strategy.”

Audits of Market Strategy often lead to the greatest sales breakthroughs. It is common that a strategy audit reveals a lack of market focus. And though it may seem counter-intuitive to consider narrowing rather than expanding one’s market range, a redeployment of resources to a more tightly-defined, more economically lucrative market segment, almost always results in accelerated growth and less cost.

In one case, prior to a strategy analysis, a rather smug marketing and sales executive said, boasting “I don’t care who buys them (his products) or for what reason. All I care is that they buy a lot.” His attitude reflected itself in the highly unfocused efforts of his sales team. This manager did not expect significant impact, nor did he believe much would be revealed, from a strategy audit. In actuality, the audit triggered a strategic market re-focus which triggered strong double-digit growth for a handful of years while enabling price premiums along the way.

Opportunities for sales breakthroughs are available by looking into other aspects of the firm’s strategy as well, not just its strategic focus. Breakthroughs can be found in analysis of the channel-to-market, pricing policy and the alignment (or rather misalignment) of all the components of the strategy together.

Auditing the Blue Gear: New Business Development

The Business Development gear comprises what most people consider to be classic, tactical marketing. It includes the firm’s e-commerce process, web presence, advertising, sales tool kit, lead generation process, print collateral, trade shows, branding, press relations, publicity and social media. Contrary to the intuition of many – more emphasis on this gear is not always better. Conflicts arise when the strategic intent is to focus while the tactical marketing team is hell bent on “getting our name out there” to as many people as possible.

A Business Development audit can reveal such things as: a) misaligned messages and focus, b) opportunities for shifting resources from expensive promotional efforts (trade shows, advertising) to more effective and less expensive targeted publicity and press relations, or c) a poorly conceived sales tool kit.

One of the most common gaps in a firm’s Business Development program is the lack of a “Thought Leadership” program. In general, thought leadership is the process of building a highly visible industry presence and reputation for your firm and your people, as industry experts. When people look for a solution, they often seek out the experts first – most of the time these days, with an internet search. Thought Leadership is typically the role of technical specialists, marketing spokespeople or senior executives of your firm – the people with enough technical or industry knowledge to be considered experts. “Thought Leadership” involves public speaking, writing and publishing articles, writing blogs, participating in industry association panels, conferences and committees and even involvement in community issues. That activity is heavily reflected in internet presence.

Auditing the Red Gear: Sales Process Disciplines

Within the sales function, the audit checklist is long. Here’s a sampling:

  • the reality, quality and current value of the sales pipeline
  • the usefulness of the sales tool kit
  • the relevance, effectiveness and currency of the sales training program
  • overall sales process effectiveness
  • the discipline of providing, and quality of, market intelligence feedback
  • the sales person’s understanding of the value proposition, differentiation and ideal customer profile, particularly for new products
  • the alignment of the compensation plan to the strategy

Something as simple as re-establishing focus on the Ideal Customer Profile can achieve rapid and significant results. While running a mini-audit, one of our clients discovered their sales people did not have a clear idea of the types of opportunities they should be pursuing. Sales sent in everything they dug up for a bid, swamping the quote department.

We took the client through a focus exercise and profiled the ideal opportunity. It took only a couple of hours to formulate. Within 9 months of this re-focus, their win rate had increased by more than 15% while the number of quotes generated decreased by nearly 33%. They won more of the right kinds of profitable opportunities. It was that simple. Less waste. More success. No blame.

Low-to-no-cost adjustments to issues discovered in an audit are common and can significantly increase sales productivity.

For example, research has shown that 35% to 50% of the customer opportunities in a sales person’s pipeline will never reach a “buy” decision. These are costly, unproductive investments of sales and support resource that have ended up in the “No Decision” bucket.

The likelihood of an opportunity ending in a “No-Decision” is inversely proportional to the degree of the “Compelling Need” a customer feels about solving their business problem. If a customer is not faced with a compelling need to fix their problem they will not buy any solution – yours or your competitor’s. A quick audit of the sales opportunities in the “No Decision” bucket brings cold reality to bear on the need to do a better job of qualifying customers.

Auditing the Soil: Performance Excellence, aka the Culture:

Think of a company’s culture as its soil. At its best, it is nutrient rich and encourages growth. Think of strategy as the seed. Even a genetically perfect seed will not grow in nutrient starved soil. On the other hand, a genetically inferior seed, planted in nutrient rich soil, will at least yield some crop. Culture is everything.

The nutrients in a firm’s culture are its values and its behavioral norms. In our experience, the best cultures exhibit the following characteristics:

  • the setting of clear expectations
  • individual and organization accountability
  • clarity of ownership of initiatives and results
  • measurements and metrics
  • rewards and consequences tied to performance
  • honesty and openness in communications
  • periodic progress checkpoints (at minimum, monthly)
  • a sense of urgency to deal with barriers and challenges to progress
  • teamwork
  • a creative problem-solving orientation focused on solutions not blame

 In our engine model the culture is the oil in the oil plan pan in which the gears move. The culture lubricates and sustains a healthy engine. Without oil the engine seizes up. Without a solid culture of performance excellence, your business seizes up.

Conclusion:

A marketing and sales audit is simply a periodic analysis of what’s working and what’s not. It is a discipline that requires digging into the marketing and sales process to look for opportunities, barriers, bottlenecks and trends. We know from experience, that initiating an audit and analysis, with the discovery of root cause as its objective can spark sales breakthroughs and improve marketing & sales ROI.

A Final Note: A Marketing & Sales Organizational Self-Assessment is not the same as a Marketing & Sales Audit

A Self-Assessment is an organized compilation and scoring of your perceptions about the capabilities of your marketing and sales organization and processes. An Audit is a validation or invalidation of those perceptions from a deep dive into weaknesses and root causes of performance gaps. Self-Assessments record perceptions. Audits discover reality.

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Copyright 2010 The QMP Group, Inc. All Rights Reserved

Learn more about what kinds of growth opportunities a QMP Marketing and Sales Effectiveness Audit can reveal. Or, request a free QMP Marketing and Sales Organizational Capabilities Self-Assessment through our Contact Us Page. We’re here to help.

Networking from the front of the room

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There are two statements I hear repeatedly when speaking with professional services firms. The first is, “It’s a relationship business.” The second is, “We generate the majority of our new business through networking and referrals.”

In fact, service professionals (attorneys, bankers, financial advisors, IT service providers, consultants, brokers and accountants), tell me that they are encouraged (if not by their bosses, by everything they read) to attend a lot of networking events, engage in conversation, not drink too much and hand out business cards.

They are, in effect, being encouraged to play a numbers game. The more events attended and the more cards handed out, the more new clients. Why this approach? Because, it has worked in the past – and if it is not done, new client opportunities dry up. With all the hype in recent years about branding, eMarketing and social media – networking still ranks as a top priority for generating new clients for professional services firms.

But, think about this kind of networking for a moment. In the 30 minutes or so before an event speaker is introduced on the dais, you are supposed to: a) meet as many new people as possible, b) demonstrate sincere interest in who they are and what they do, c) identify their key challenges, d) empathize and e) build up enough mutual trust to get them to remember you well enough to agree to an appointment in the the next, oh let’s say, 3 months. There must be a better way.

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The professional services marketplace is much more competitive these days. A lot more people are handing out a lot more business cards at a lot more events. In addition, a swarm of unemployed executives, and there are many, are buzzing the networking circuit. The bottom line is that professional services firms need a better way than traditional networking to stand out and find new opportunities in this market. They need a more effective way than traditional networking to generate the essential credibility and trust that precedes all new client opportunities.

Front of the Room Networking

Front of the room networking is the act of being the headline speaker at networking and other business events. It has incredible power to attract new prospects and many advantages over crowd surfing. The following list of advatntages illustrates the power of this approach:

1. An intriguing title will attract the right kinds of prospects with the right kinds of problems

Picking a title which addresses and offers approaches to problems commonly faced by your clients is a way to garner interest in your talk. In fact, if done well, the people attending will self-pre-qualify simply by demonstrating enough interest in the topic to attend and listen.

I recently offered a topic to an organization of management accountants for their October monthly meeting entitled, “How to Judge the Reality of your Marketing and Sales Team’s 2012 Forecast”. October, being coincident with most firms’ annual planning efforts, was perfect timing, and the topic being relevant attracted a good amount of attention.

2. Offer to speak at a venue that attracts, by function and title, the key decision makers or influencers for the service you provide

While it may be flattering to be asked to address the local Boy Scout troop, and you may get a feeling of civic and professional pride in doing so, if your professional services are bought or recommended by B2B CFOs, you may want to reserve some energy and your best jokes for the latter crowd.

3. Insight is Essential

Assuming you are addressing the right crowd, with the right topic, with an intriguing catchy title, your talk must provide insight. To be effective it must have the effect of causing people to tilt their head, look up toward the ceiling and say to themselves, “I never thought of it that way.”

or

“ Wow! That’s a clever approach.”

or

“Wish I had thinkers like that in my organization.”

or, best of all …

“I MUST to talk to this guy/gal after he/she finishes.”

4. The hosting / sponsoring organization typically does all the logistics work

They invite the people, promote the event, reserve the venue, arrange and pay for the breakfast, lunch, snacks, coffee, beer or wine (depending on the time of day), provide you a flattering introduction and assure that the place is cleaned up afterwards.

5. You speak (and consequently network) to the whole room at once

Being the featured speaker at a monthly meeting typically permits you to address 25 to 100 people simultaneously, instead of engaging in chit-chat one-on-one for 10 minutes with each of 3 people. As mentioned above, typically networking and association get-togethers allow 30 minutes for that kind of chatting before the speaker starts. That allows time for meeting 3 new people – if you don’t waste time catching up with your buddies first and talking sports, books or politics

6. You have their uninterrupted attention for 45 minutes

For this networking approach to work, you must be an engaging speaker and deliver value. You cannot take advantage of the opportunity and try to sell. You must be willing to share.

Many people feel they will be giving too much away if they do this. As a consultant, my experience is that you can give someone your complete process binder and they will not be able to deploy it without your help. The caution is that you can really only share so much. You must protect your Intellectual Property – but do not fear to share a lot. It builds your credibility, demonstrates your expertise, illustrates your commitment to help and provides more opportunity for your listeners to want to talk with you afterwards.

7. It helps you continue the development of your ideas, products and intellectual property

The compelling need to think and develop your talk after you have committed to it, has the added benefit of forcing you to take thinking time. This thinking time always generates new ideas that you can test with the new audience.

And here are some tips for giving a great talk and getting great results:

1.  Assure you have an audience of decision makers or highly placed (by title) recommenders  

As a colleague of mine said, “Pick your talks by who you want to listen to you, not by who accepted your talk”. Before i recognized this, I wasted more than one evening giving great talks to very interested attendees who weren;t anywhere near the decision to decide on using my services

2. Make your presentations interactive

Another key point is the need to engage interactively with your audience versus lecturing. Small exercises that illustrate key concepts are very helpful. One of the most effective tools is some sort of self-assessment which illustrates key gaps in the current situation of the attendees.

3. Make frequent eye contact with individual people in the room.

It gives listeners a feeling of a personal conversation and intimacy with you even though there may be 100 people in the room.

5. Don’t forget to smile

If people see you are enjoying yourself, and excited about talking with them, they will enjoy themselves and be excited about talking with you.

6. Exchange business cards after your talk

If the sponsoring organization does not provide for it, offer to make (and personally deliver) copies of your presentation to the attendees if they provide you a business card. Also ask if they would mind being on your mailing list when you get their card. At the accountant meeting mentioned in Point 1 above, out of 50+ attendees, I collected 12 business cards after the talk by people coming up to me, expressing their appreciation for what I had to say and requesting the presentation. Within the next few days, I had scheduled four appointments.

7. Follow up quickly, when they ask you to

A final point is worth repeating: Remember, you are never selling when you give one of these talks. You are providing information and insight. The sense the audience feels of you as an expert is what creates the magnetic attraction for you to come and solve their problems.

Summary:

Speaking in front of crowds is an integral part of Thought Leadership and an active Thought Leadership effort is essential for a professional service providers’ business development efforts. A well constructed Thought Leadership effort builds brand, reinforces your individual and firm’s reputation as experts, piques client interest, builds web traffic and provides opportunity for price premiums.

For a good book on the pillars of Thought Leadership, grab a copy of “The Expert’s Edge” by Ken Lizotte (McGraw Hill)

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Networking from the front of the room and other Sales and Consulting business development practices are part both the QMP Sales Skills and Process Workshop and the QMP Consutlancy Navigator Program offered by The QMP Group. Click on their titles to learn more.

 

Lean Marketing and Sales: The Art of Optimizing both Customer and Company Value

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“Lean is the process of maximizing the value delivered to customers by eliminating any wasted activity or expense marketing or sales process that does not create, communicate or enhance customer-received value.”

In this QMP Insights blog we offer an approach for improving both top and bottom-lines through the application of “Lean” principles to six key areas in the marketing and sales function of a firm.

 

Getting Started with Lean in Marketing and Sales:

iStock_000023705897XSmallThere are three foundational principles that must guide any application of lean principles to the marketing and sales function

First, the law of economic value is always at work. That law states: All economic value accruing to your firm has as its source, the customer’s perception that they will receive more value (economic, emotional or physical) from your product or service than it costs them (economically, emotionally or physically) to purchase, acquire, set up and use.

Second, avoidance of the application of lean concepts creates growing breaches in your business that competitors will exploit. If there is any place in your product or service offering, customer service process or sales approach that customers consciously or subconsciously perceive as not providing the highest value possible, that gap will be the place you are most vulnerable to competitive attack.

Third, when assessing the relative importance and value of deploying a specific lean initiative, use the first and second guiding principles above. Considering the deployment of lean principles in your product and service portfolio or your marketing and sales function only as an opportunity to reduce costs can result in customer backlash. Bank of America felt that backlash recently when they instituted debit card user fees and we all feel the frustration when we can’t reach a real person in customer service.

 

The Six Targets for Lean in Marketing and Sales:

Market Focus

Face the facts. Your product or service offering does not offer the same set of economic, emotional or physical values to all market segments equally. Lean means focusing on those market segments where the value-received by customers is the highest. If that situation exists, the law of economic value is satisfied and research shows that the following benefits accrue to your firm:

  • the ability to garner price premiums
  • faster market penetration
  • higher customer satisfaction
  • more peer-to-peer, word-of-mouth customer communication of that value proposition
  • higher interest in your product from channel partners
  • higher probability of achieving market share leadership in that segment
  • reduced marketing expense
  • improved sales win rate and faster time to close
  • reduced product design costs and a clearer product evolution path as a keener awareness of the customer needs in that specific market are revealed
  • greater returns from focused social media and website investments

Market focus is Lean in action.

 

Market Communications

The wisdom of lean and focused market communications is the toughest principle to convey to marketing and sales teams. The common fallacy is that, “more marketing expenditure is better than less”. Marketing and sales teams typically will fight tooth and nail to avoid reductions in this sacred arena. They believe that more marketing dollars across more expansive markets means more customers. Not so.

Research (Everett Rogers, “The Adoption of Innovations”) shows that communications of a new idea is best accomplished through opinion leaders in a target market. Peer-to-peer communications, accelerated by opinion leaders, is 13 times more effectively than mass communications. Focused marketing communications programs to reach those opinion leaders, with focused value propositions achieved through market-focused product design is as effective as can be achieved. Social media can help – as long as it is focused.

Focused marketing communications is Lean in action.

 

Channel to Market

Your business will begin to erode if your channel-to-market provides value only to you and not your customers. Marketers must be vigilant to assure their channel continues to deliver real value to customers and clients. Let’s take Amazon.com as an example.

Amazon.com is, at its most basic level, merely a channel-to-market. They do not write books or build any product. Even the manufacture of the Kindle is outsourced. Amazon’s growth was the result of tapping into an under-satisfied customer value (convenience) and leveraging an emerging technology (the Internet).

By building an on-line bookstore coupled with an efficient order fulfillment process, Amazon stole the customer segment of the book market motivated by convenience, not couches. Relevant value to that segment is: browsing at home, saving gasoline, saving time, the use of peer reviews and comments to facilitate decision-making, fast customer service, the opportunity to contribute reviews and comments, and avoidance of the “out-of-stock to be supplied by another store across town and we’ll call when when it’s in” situation. The introduction of “Whispernet” (the wireless purchase and instant delivery of e-books to the Kindle) further enhanced this basic value set. And taking this value proposition even one step further, Amazon has now added free, unlimited on-line storage of your complete media library (music, books, movies) in the cloud with the Kindle Fire®. Wow!

All this value provided by basically a channel-to-market. Amazon understood how to find untapped needs and use technology to meet them efficiently. This is Lean in action in the channel-to-market

 

Sales Process Discipline

An oft cited statistic claims that 30% to 50% of the opportunities in the average sales person’s pipeline won’t close because the customer makes a decision not to buy anything. The sales person has, in effect, wasted time and money pursuing something that was destined to never result in a sale. How can one really know if a specific opportunity will actually result in a purchase?

The answer has several parts.

First, if Lean principles are applied in the previous steps (strategy, channel and communications), there is a much higher probability that a purchase will occur, because the value proposition and its communication are more efficient, focused and aligned with customers that are likely to receive the greatest value from your product or service.

Second, if the firm has developed an ideal customer profile that describes that buyer type, it enables the sales team to quickly identify a good potential prospect and politely decline continuing involvement with a poor prospect.

Third, there is a simple set of 5 criteria that can improve a sales person’s ability to quickly qualify an opportunity.

  • intensity of the customer’s need or problem,
  • degree to which the product offering can meet that need,
  • degree of the economic, emotional or physical value the customer will receive by using the product or service,
  • customer perception of the relative competitive advantage of the product or service solution
  • the existence of a customer champion for the solution

These principles put Lean in action in the sales process.

 

Market Intelligence Feedback

Market intelligence is critical to success. Sound market strategy depends on current and valid market intelligence. That intelligence may comprise some or all: competitive intelligence, customer satisfaction, barriers the sales people keep running into, the health of the customers’ markets, usage idiosyncrasies and a host of other informational tidbits. The sales team must be at the forefront in gathering this data, because the sales team is company asset that is in the most frequent contact with the customer.

The most efficient way to gather market intelligence is through weekly or monthly sales reports. Contracting market research firms to gather market intelligence from the same customers the sales people talk to each month anyway, is admitting to un-Lean practices and indicative of other organizational or culture problems.

Here are some thoughts about making your Lean market intelligence gathering:

  • make a bullet-point market intelligence section a required part of your sales person’s weekly or monthly report
  • train your sales people how to question and observe – not just spew the benefits of your product
  • include providing market intelligence in the sales compensation plans and sales position descriptions
  • provide the ability to award spot bonuses for the most timely and important pieces of information that come your way
  • read the market intelligence reports; think about and acknowledge them by calling back the sales person who provided the information, thanking them and getting more information

Listen carefully when sales people talk about gaps in the customer’s perception of your product’s value delivered. The first comment is inevitably pricing-related. Pricing-related value gaps are more about market targeting, product design and the customer’s perception of value received than actually about pricing. Pricing is only a symptom of a bigger strategic problem.

 

Conclusion:

The application of Lean principles to marketing and sales is easy and inexpensive. A firm of any size and market can deploy Lean. Lean principles assure that customers get the best value they can – and in return, consistent with the law of economic value, your business optimizes its own economic return.

Click here to talk to QMP about Lean Marketing and Sales

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Accelerating the Market Adoption of an Innovation

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The Product Development and Management Association Glossary of Terms defines failure rate as the percentage of a firm’s new products that make it to full market commercialization, but which fail to achieve the objectives set for them. By that measure, it is not surprising that a quick internet search on the subject of product failure rate yields studies that claim anywhere between 50% (commercial) and 90% (retail food) of new product or service offerings fail.

iStock_000009333210XSmallFailure can mean some or all of lost time, wasted money, missed opportunity, damaged credibility, tainted brand reputation, enhanced competitive vulnerability, lost jobs, truncated careers and a host of other unpleasant outcomes. So, whether the real failure rate is closer to the lower (50%) or higher (90%) end of the estimate is not as important as recognizing that discovering ways to improve it is essential.

For the past 15 years a good part of our work at QMP has centered around helping business-to-business clients turn around under-performing businesses and products. Many of them were struggling with getting new offerings off the ground or gaining traction in the marketplace. We’d like to share with you a bit about what we have learned, in hopes that it may improve your probability of success and help you avoid the myriad consequences of failure.

 

The Empirical Science Basis of the Adoption of Innovation:

In 1962, Everett M. Rogers wrote a breakthrough work entitled, “The Diffusion of Innovation” (republished in its fourth edition in 1995 by The Free Press). In it he compiled a number of studies documenting adoption successes and failures of all types of innovations over the past 100 years — from sociological to scientific. He included varied research findings, such as the struggles of the Chilean health department with getting Andes mountain villagers to adopt the habit of boiling water for health reasons, Iowa farmers adopting hybrid seed corn and Pittsburg school system principals adopting new math.

While the lessons learned from reading such a remarkable book are many, two items stand out above all others; 1) the adoption or diffusion of an innovation is not a linear phenomenon (meaning it does not gain its energy and momentum just one isolated customer at a time across a wide range of groups), and 2) adoption is significantly accelerated by the dynamics of the intramarket communication network (how buyers in a market or group meet, discuss and communicate ideas).

In fact, one of the most amazing conclusions coming from the research is that communication through the intramarket network is roughly 13 times more effective than mass communication in the adoption of an innovation. This interesting research conclusion predates the emergence of social media, blogging and Tweeting which, by now, are well recognized as an effective internet-powered intramarket communication vehicles.

 

Mass Communication and Struggles with Adoption

One of the most common problems we find with innovations struggling to gain a foothold in the marketplace is the parent firm’s unwillingness to focus. Rather than taking a chance on a focused launch initiative, they believe it’s better to try a broad one and see what sticks. In addition, the management team and product people are typically so convinced of the universal applicability of the innovation, that it leads the firm to believe that “getting our name out there” quickly, to masses of potential buyers, will be all that is required for success. This is rarely the case.

In pursuing such a course of action, it is not uncommon for a firm to find they have spent valuable economic resources on grand branding schemes and exposure initiatives with a minimal real impact on market penetration. Applying for a second round of dilutive funding to finance a second run at that same holy grail is an option—and some select it – with the same results.

 

Fragmenting the market to gain a profitable foothold

Buyers, particularly commercial and business-to-business buyers, invest in an innovation because they believe the economic value they will receive from that innovation will exceed the amount they have to pay for it. The market success of an innovation requires that the market which you’ve targeted has a significant enough proportion of customers with a big enough common problem to create a compelling argument for an investment to solve it. The key is, not all market segments have the same problem to the same degree. Focusing your launch on a particular sub-segment of the market where the economic value proposition of the innovation is compelling, creates a much higher probability of success than a broad approach.

 

If it’s that simple, why don’t more businesses focus?

There are many reasons: First, investors prefer firms that are moving after big markets with big payoffs. The bigger the market envisioned, the bigger the potential payout. Secondly, the inventors have a sincere belief that “everyone” can eventually use their innovation—and eventually they may be correct. Third, innovators and marketers alike get caught in the excitement, glitz and hype of launching a major market initiative launch. It can be a very heady experience. And, fourth, they simply have too much marketing money in the budget and don’t know how to manage it well.

Trying to stand in front of the innovation-launch train as a voice of reason, as it barrels down the track of a well-funded general market launch is fruitless. It’s best to wait till the train burns out its fuel and then catch up to it further down the track when it has stalled.

Not withstanding the previous explanations, there is a more fundamental reason why people don’t focus for success, they simply don’t know how to select the best markets to focus on.

 

Criteria for Target Market Attractiveness:

Over the years of working the challenge of assessing and selecting the target market segment that will yield the highest probability of success for an innovation, we have developed a series of criteria that seem to work effectively.

Market Momentum: Different market segments have different economic, demographic and regulatory factors which affect its basic momentum. When selecting a market, we want our investments to be lifted and propelled downstream as much as possible by inherent momentum factors in our favor.

Compelling Need: This factor refers to the extent the problem the innovation is designed to resolve is compelling from an economic, safety or regulatory standpoint. Take the Segway for example, the innovative two-wheeled, gyroscopically-balanced personal transport scooter. It’s general market launch, after much early hype, has been less than hoped for by investors and its inventors alike. It is, however, finding its way to higher success rates in mobile security markets, on campuses, malls, large commercial complexes, inner city tourism, and in a slightly modified version, golf courses.

Match: The extent to which the innovation matches and completely resolves the compelling need it was designed to fix. A perfect match will increase customer satisfaction and improve the ability of potential customers to rapidly make the innovation-to-problem-fix mental link.

In the early days of flat panel monitors, when they were expensive compared to bulky CRTs, one of our clients attempted to penetrate the general desktop market with this own version of a flat panel monitor. At a $1,000 selling price, compared to a $249 monitor price, the effort failed. However, when the effort was refocused on hospital rooms (a much smaller segment of the market but with a more compelling set of needs), the monitor was wildly successful. In hospital rooms, space is constrained, electromagnetic interference from CRTs cannot be tolerated around sensitive medical monitoring equipment and sparks from high static CRTs can’t be permitted in oxygen rich environments. The client’s initial adoption failure was turned to success simply by redirecting the market focus—and there were no changes required to either the average selling price or inherent product features. In fact, the selling price increased as, over time, hospitals requested additional features to increase the basic capabilities of an already good solution.

Socket Count: A socket is a potential place where the innovation can be installed. For example, a first estimate of the potential sockets for the microwave oven at its inception would have been the number of households without one. Today, the number of sockets available for new microwave oven innovations is going to be limited to those sockets that either don’t have a microwave already installed (very few) or those for which the innovation solves a compelling need or significant shortcoming with their existing solution.We want to find a market to target our innovation at that not only has a compelling need and positive momentum factors , but also a lot of unfilled or under-satisfied sockets.

Value Quotient: Closely related to the magnitude of the compelling need is the balance of the value quotient from the customer’s perspective. This relates to the value of the benefit to the customer of solving their problem with your innovation, divided by the cost of acquiring, installing, learning and using it. There may be a significant compelling need, but if the cost of the innovation needed to repair the compelling need is prohibitive, adoption will be slow. A rule of thumb is that within three years of purchase the innovation should pay back at least 5 to 1 in bottom line cash flow for the customer. A further note on this point: Value received is not completely economic. Value comprises the complete suite of benefits encompassed in the Economic, Emotional, Political and Physical realms of what your product/service delivers.

RPQL Position Availability: RPQL stands for Relative Perceived Quality Leadership. Forty plus years of research in the Strategic Planning Institute PIMS data base (Profit Impact of Market Strategy) indicates that the single most important factor affecting a business unit’s success is the market’s perception of the relative perceived quality of its goods and services compared to its competitors. One important point to remember—perceived quality is related to the segment of the market. Not all segments perceive quality in the same way. Charging after a market that already has an RPQL leader is equivalent of a military frontal assault on an entrenched position. Not a wise decision.

IntraMarket Network: As mentioned earlier, innovations diffuse more rapidly if there is a strong intra-market network through which the value proposition of the innovation can be communicated—person-to-person, customer-to-customer. The intra-market network comprises two parts a) its venues (events, forums) and vehicles (journals, publications, websites) and b) its intra-market opinion leaders.

Opinion leaders are the real geometric multipliers of the value proposition message. For opinion leaders to be most effective they need to have four important characteristics. First, they need to be rabid believers in the innovation and its value proposition. Secondly, they need to be well-networked. Third, they need to be highly credible in the network of interest and finally, they need to be natural sales people—anxious and completely un-shy about communicating new ideas to friends and colleagues alike.

The next five target market attractiveness assessment criteria are important as well, but if the market isn’t attractive after an analysis of the first seven the second five are not worth working through.

Profitability: Selling the innovation must be inherently profitable. If you feel you have to reduce price to gain traction, it may simply be that you have a questionable value proposition or your perception of the customer’s compelling need is misunderstood. It certainly should bring into question your thoughts about the economic equation factor. Sometimes simply changing the target market can change the profitability by allowing pricing in proportion to unique benefit—as in the flat panel terminal example stated earlier.

Competitive Turmoil: The higher the competitive turmoil the more expensive it will be to create a successful presence. The exercise of focusing down to a smaller, less competitive market segment, will provide a higher probability of surviving any inevitable market shakeout.

Brand Leverage: It’s easier to gain market attention for your innovation if your brand speaks innovation. Apple will easily get media and intra-market opinion leader attention for a new consumer, music or creative computing idea. Volvo will get attention for an innovative auto safety related product—like a car seat or anti-roll stabilizer for an SUV. Neither will get brand traction if they introduce a pillow or dinner ware.

Accessibility: Sometimes markets may be attractive but relatively inaccessible because of sales channel limitations, aggressive competition for limited shelf-space, import/export restrictions, licensing requirements or other considerations.

Perceived Value of Differentiators: This last factor comes into play when the competitive turmoil factor is less than optimum. It assesses the degree to which your differentiated position for the innovation, compared with your competitors’ approaches, has meaning and economic value in the target segment under assessment.

 

Conclusions:

What we have learned in years of helping our clients with the market introduction of their innovations is this: Focusing on those markets that exhibit the best composite results on the listed assessment factors results in:

  • More rapid adoption
  • Higher average selling prices
  • Higher profitability
  • Higher degree of customer satisfaction
  • Lower market launch expenses
  • More defensible positions
  • Higher probability of surviving shakeout
  • Learning how to do it consistently in the future
  • Less ownership dilution

 *****

Copyright 2006 The QMP Group, Inc.   All Rights Reserved

 

For more information about how to accelerate the market adoption of your innovative product, contact QMP at qmp1@qmpassociates.com or 503-318-2696

 

The Biggest Sales Myth

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A sure bet on what sales people believe…

One of the first topics commonly included in sales training programs and books is a discussion of “Sales Myths”.  Over the years I have heard a number Pulling Out Hair of these myths and have my own favorite set of a half-dozen or so that we use in our sales training program.

The myth that is particularly revealing is implied in this question we ask to sales people:

How many of you have ever lost to an inferior offering?

When I ask this, I always accompany it with a warning that it’s a trick question. In spite of the warning, a nearly unanimous show of hands is the response.

That’s when the trap closes.

It’s all about perspective

The truth is that you never lose to an inferior offering.  It may appear inferior in your eyes, and from your perspective.  You may even be able to show the specification inferiority in absolute provable, numerical or physical terms.  But, it’s not your eyes and perspectives that matter.  The only eyes and perspectives that matter are those of the customer.

So, what is the real story?

Losing to an offering that is inferior in your eyes really means some, or all, of the following:

  1. You didn’t truly understand the criteria the customer used to make the decision until it was too late.
  2. You didn’t ask what the criteria were.
  3. You didn’t develop enough trust with the customer for them to share the criteria with you.
  4. You didn’t understand the circumstances that influenced the customer.
  5. You didn’t understand, or were unable to advise the customer to re-consider the decision criteria.
  6. You were selling into a poorly qualified opportunity, one that didn’t match the strength of your offering.

Test yourselves:

If you are a sales person, or someone who has access to the sales pipeline of your firm, select the top six opportunities in the pipeline.  For each of these opportunities list the top four to six criteria, in decreasing order of importance, that the customer will use to decide what to buy – or even if to buy at all.

When we use this exercise in our training programs, the stunned and embarrassed faces in the crowd are something to see.

Not too long ago, we were working with a client sales person on his pipeline.  He was proudly sharing page after page of opportunity strategy worksheets.  On every sheet the decision criteria, a section we strongly encourage sales people to document and use in formulating strategies and action plans, were exactly the same.

I had to ask how that could be – and if that was truly what the customers were telling him.  If it were so, it would have been the most incredibly homogeneous market I had ever seen.

He replied, “No, the customers didn’t tell me those criteria.  I know how my customers make their decisions.  I don’t have to ask.”

Was this response arrogance?  Laziness?  Fear of asking? Lack of belief that decision criteria expressed by the customer is relevant?  Whatever the reason, this poor sales person embarrassed himself in front of his peers and management?

Phrasing the question effectively

Much of the value that sales people receive from sales training is in learning key phrases and techniques for asking tough questions.  These questions might be about funding availability, decision-making power, the competitive situation, gaining access to other folks involved in the decision, or, in this case the decision criteria.

One of the common traps sales people fall into with respect to understanding decision criteria is assuming that while they are talking with the customer, decision criteria are naturally being revealed in the normal course of conversation.  Sometimes they are.  Sometimes they aren’t.

The safe stance is to assume that they aren’t revealed.  So, here are some questions to assist in revealing the real decision criteria:

Assuming you are not the exclusive decision maker, would you feel comfortable sharing what you believe other members of the committee are concerned about and would use in selecting the final solution?

If you feel uncomfortable speaking for them, what benefit do you think there might be in gathering the decision makers and influencers to work through and collect all the decision criteria and perspectives?

Have they compiled their concerns, needs and preferences in any sort of document?

Is there a vendor’s guide that would help assure that we will meet or exceed all your criteria?

Of course, there is always the option of asking directly, “What are the decision criteria”?

In reality, based on the responses of the hosts of sales people attending our training programs, that last question is rarely used.  The more common scenario is that sales people believe that they know everything about the customer’s decision process simply by having had a discussion.

A final check…

Even if you haven’t broached the subject of decision criteria directly, and believe you know enough from the conversation, it is helpful to run through the following routine to review what you understand the criteria to be.

“Thanks for taking the time with me, Paul.  Before we break up here, would you mind if I spent just a moment to confirm that I understand the criteria you will be using to make your decision.  Here’s what I inferred from the conversation. (Re-cap here).

When you finish, ask, “Is there anything I missed?  Is there anyone else that we need to speak with who might have additional criteria?”.

Explicit, Implicit and Hidden Criteria

If you follow that dialogue you get only explicit criteria.  It’s certainly better than not knowing anything – but it’s incomplete.

Implicit and hidden criteria are best revealed through keen observation.  While much is said in sales literature about listening skills, keen observation skills are equally, if not more important.

Observing and noting the physical surroundings, the personalities of the buyers, the organizational and political situation in the customer’s firm, the personal ambitions of the buyers and body language can reveal approaches which meet implicit and hidden criteria.  If the office is highly organized and neat, so should be your proposal, your meetings, your presentations and your communications.  If the customer works in teams, package your offering as a team effort.  Implicit and hidden criteria / requirements can be met at the sub-conscious, as well as the conscious behavioral level.

Keep in mind what Yogi Berra is purported to have said,

“You can see an awful lot just by observing”

A final point:

In the hands of the skilled sales person, dialogue and observation must work closely together to identify customer buying criteria.  The more the criteria are understood the higher the probability of winning and the lower the risk of losing to an apparently inferior offering.  .

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Learn more about the QMP process for understanding customer decision making and creating winning sales strategies.

 

Common Sales Myth #1 – A Sales Person’s Job is Just to Sell

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After many years of both conducting sales training workshops and personally selling, I have come to recognize six popular misconceptions about selling. And, I must say, every time I broach those myths during a sales training session I get push-back, disbelief, the wagging of heads and several audible “No Way!’s”. So I am braced for your blog comments.

I have chosen to address each myth as a separate blog post, to make it more convenient to get through in the smaller and smaller free time chunks we all seem to be experiencing these days. Here’s the first.

Myth 1: A Sales Person’s Job is Just to Sell

We understand that sales people are under a lot of pressure to spend time face-to-face with customers and on the road – rather than behind a desk.  But pushing, or allowing, a sales person to only sell is counterproductive. That approach would be the equivalent of saying, “A soldier’s job is just to shoot and kill the enemy.” Good soldiers do a lot more than simply shoot. They are part of a team that sometimes requires them to play different roles and take on different duties. Here are some examples, along with their contrasting business function.

They collect and report field intelligence: Good soldiers are trained, not only to shoot, but also to observe and report on the enemy (competitors), their armaments (competitive advantages and value propositions), their location (markets and customers) and their strong points (where they have impenetrable positions – be it markets or accounts). Soldiers also report on the enemy’s weaknesses and gaps in their lines (under-serviced customers and under-served markets).

Any General, coming onto the battlefield needs, first and foremost, intel – to be able to formulate a strategy. Business managers need intel as well, for the same reason.

They report on the effectiveness of their own, and the enemy’s, weapons: The business equivalent is reporting on customer receptivity to the sales tools in use, the sales approaches, product capabilities, product reliability, product effectiveness, installation problems, quality, training problems and a host of other relevant experiential aspects of selling, delivering and using the product.

They dig in and defend the ground already captured: In business terms they defend their current accounts through disciplined customer service and make sure they are secure.

They exploit a victory, charging after a retreating enemy, or pouring through a breach: When something works in the field they use it again and again, winning repeatedly over weak competitors and landing new customers until the territory is “owned” and they move into a temporary “hold and defend” mode – until the next opportunity for an offensive.

BocageBuster

They share techniques and victories: In World War II, shortly after the Normandy invasion, the allies, having driven off the beaches into western France found themselves in bocage country . Bocage country is best described as countryside spotted with crop and grazing fields that are edged on all sides by 6 foot earthen walls entangled with scrub brush, vines and trees. These barriers have been built up over hundreds of years, a result of field-tending by farmers. From the air, bocage resembles a bunch of egg-cartons set side by side as far as the eye can see – each carton with deep, rectangular recesses. (Though at the time of the invasion, aerial observers did not recognize the impenetrable nature and height of the actual barriers.)

Capturing each field required soldiers to climb up one side of the barrier wall, scramble through the brush, trees and tangled vines, enter the field and charge across it to the bocage wall on the opposite side of the field. Tanks could not climb and penetrate these natural walls. The soldiers had no cover when entering the field. Casualties were high. The enemy simply placed machine guns at the opposite side of the field and mowed down any soldiers coming over the opposite wall. Progress in liberating France, ground to a halt.

That was, until some innovative engineer found that welding a fork-like scoop on the front end of a tank allowed it to tear through the walls, enter the fields ahead of the Allied soldiers and place heavy covering fire on the enemy gun emplacements on the opposite bocage wall. The success of that technique quickly spread to other infantry units. The casualty rate dropped. Progress accelerated. Eventually France was liberated.

When a sales person finds, discovers or invents something that succeeds and creates breakthroughs – it must be shared with all.

They train: To think that basic training is all that soldiers go through is a myth. Soldiers constantly repeat their training and hone their skills to a razor’s edge. They train on new techniques, new weapons, new systems and capturing obstacles and enemy positions in different terrains. Then they re-train on what they learned in their first training. Sales people, sadly, might train once a year. New sales people joining the team, may have to wait as long as 11 months before undergoing their basic training. Lack of training puts the team, the company and the product reputation at risk.

One more point: Training has two parts: basic physical conditioning (sales skills and disciplines) and weapons training (product and sales tool training).

Yes, there is more …

We could go on with the “good soldier” analogy, but by now, if you are a salesperson, you’ve probably reached your reading time-limit and need to run to do something else.

Have a good day.

Read the complete set of  The 6 Common Sales Myths.

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Click to learn more about the QMP Sales Process and Skills Training, call us 503-318-2696 or connect through our Contact Us page

 

 

 

 

 

 

 

 

Common Sales Myth #2 – You’ve Lost to an Inferior Offering

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When we ask salespeople in our workshops to raise their hands if they have ever lost a deal to an inferior competitive offering, they almost universally raise their hands – even though we have told them ahead of time, “It’s a trick question.” 

The truth is: No one ever loses to an inferior offering.

iStock_000010460151XSmall

“How can that be true?”, you ask. “How,” you may ask, “could anyone consider that crap, superior?” 

If you lost, all the evidence indicates it wasn’t really an inferior offering, after all. That truth of it lies in two facts; 1) the decision-maker’s perspective and the values from which the relative superiority and inferiority judgement arose both differed from yours and 2) the outcome satisfied only one person’s needs – and that person wasn’t you. But, ultimately, the outcome is the final proof. 

At the moment a customer, and/or the ultimate decision maker, makes a decision to buy another “inferior” offering instead of your “superior” offering, that other offering is being perceived as a superior alternative in the eyes of that decision maker  – by a unique, hidden or secret set of evaluation criteria that you simply don’t understand or chose to ignore. Your personal opinion doesn’t, and didn’t matter. Relevant value is only in the eyes of the beholder – not the seller.

There are several reasons we are led to self-deceptively believe this harmful myth.

1. We, in sales, think all value is economic. That’s the reason we put so much emphasis on price competitiveness. 

Perceived value can be economic, but it can also be emotional or physical. When my family was young, I remember spending a lot of time analyzing car models and test driving a half dozen or so, narrowing them all down to two finalists. I sequentially drove both of them home for my wife’s final OK. She ran out to the driveway, a new-born in her arms and our other child, a two-year old, clinging to her jeans. She sat in the first car while I held the baby. She didn’t drive it. No excitement.

I returned that car and came back with the other option – a different brand and model from a different dealer. We repeated the drill. While she was sitting in the second car, she reached down, ran her hand across the seat (not leather in those days) and said, “This is it. It feels right.” We bought that car. It had nothing to do with the performance, reliability, handling or any other criteria I was discussing with either sales person. I didn’t have a clue that a “feel” test was going to be the ultimate consideration and the final decision point. I thought, as the salesperson did, that I was acting as the “official” power purchaser and “ultimate” decision maker. 

This “feel test” was an obvious physical value – not an economic or emotional one – and it held importance in the criteria by a “hidden” decision maker. 

2. We don’t understand the real decision criteria. In the story above, I narrowed down the choices. However, there was another final hurdle that neither the sales person or the purchasing agent (me) knew of.

3. We don’t understand all the decision makers  (See my new car story, above)

4. We emphasize the wrong product (or service) strengths. Not all strengths are meaningful to all buyers – or with the same relative importance. There is nothing more irritating and distracting than a salesperson spewing data, stats and features when you are trying to focus on the one, two or three most important things in your personal decision tree. 

5. We try to sell to the wrong target customer in the wrong target market. We continually hear, particularly from inventors and entrepreneurs when we ask them who their target customers are, that “everyone” can use their new product, service or invention. This leads to inefficient use of sales time, and significant mismatches in message. Telling the whole story, while missing the relevant customer or market-specific benefits, is common and leads sales people to say things like, “They (the customers) just don’t get it.” 

We have witnessed a company that believed so strongly in the universality of their value proposition nearly go out of business as they scattered their message as broadly as possible. Panicked by their rapidly dwindling marketing and sales pocketbook, lack of success and anxiousness to avoid failure, they engaged us. We told them to focus very tightly on markets and customers where the value received was the greatest. They finally agreed and the business began to turn around in less than 3 months. That simple change resulted in a four year run of breakthrough growth.

6. We don’t understand our own value proposition and differentiation: Each of our products or services should have a clearly articulated value proposition and differentiation in all three value areas; economic, emotional and physical. These values must be enhanced by the corporate brand – the ambient light that our products shine in. Johnson & Johnson, 3M, GE  and Apple (to a somewhat lesser extent these days) all bask in the glow of that favorable corporate light. The corporate light typically shines an intangible emotional and implied physical light on products and services.

Don’t bail on price as a last desperate attempt to fix your perception mistake.

One final point: To think that price is the only variable available to trigger a buy is flat wrong. But that is the topic of another myth. Suffice it to say, if that were true we’d all be driving the cheapest cars on the road.

Watch our QMP Insights blog for Sales Myth #3: “It’s relationship business”

*****

Copyright  The QMP Group, Inc. 2013 All Rights Reserved

Click to learn more about the QMP Sales Process and Skills workshops or call us at 503-318-2696 or through our Contact Us page .

Common Sales Myth #3 – Sales is all about Relationships

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It’s a Relationship Business!

That four-word phrase is probably the most common statement we hear when we talk to sales people about their business.  It is even more common than the statement, “It’s a Price-Driven Market” – though more often than not those two statements travel closely together.

Relationship

Do You Have Brothers and/or Sisters? The Limits of the Relationship

To challenge the assumption that businesses are primarily relationship-driven we ask salespeople the following questions.  Here they are, with the typical answers.

Q.  “Do you have a brother and / or a sister?”      A. “Yes.”

Q.  “Do you have a good relationship with your brother or sister?”     A. “Yes”

Q.  “If your brother or sister tried to sell you something that would be detrimental to your business, would you buy it?”     A. “No (expletive deleted) Way”

Q. “What if they threatened to would tell your Mom that you refused to buy from them, would it change your mind?”    A. Laughter.  “No”

Here’s the point: All relationships, even good ones, have their limits

Relationships are based on trust.

Any activity that violates trust, violates and detracts from the relationship.

Let’s look at the Trust Equation, developed by David Maister, Charles Green and Robert Galford in their wonderful book “The Trusted Advisor“.  According to Maister et al,  Trust equals the sum of= (Credibility + Reliability + Intimacy) divided by (Self Interest).

 T = (C + R + I) / SI

Anything a sales person or their company does to lower Credibility, Reliability or Intimacy, lowers Trust and damages the business Relationship.  As you can also see from the equation, anything that blatantly demonstrates your, or your firm’s, Self-Interest also damages Trust and thereby the Relationship.

Nothing in the equation can affect Trust more than the amount of your self-interest perceived by the customer.  The higher the Self-Interest perceived, the lower the Trust.

Here’s the point. Depending on the Relationship alone can be perceived by the customer as inherently demonstrative of high Self-Interest.  In Relationship terms, “They want me only for my money.”

What Relationships Can and Can’t Do

Relationships can:

  • Get you an audience to make your case
  • Buy you some time and patience when you or your company screw up
  • Get you early, but not necessarily exclusive, notice of a new opportunity at an account

Relationships can’t:

  • Make up for a significant competitive shortcoming in your product or service offering
  • Repeatedly cover for your operational team’s inability to deliver
  • Make up for poor product or service quality
  • Find and win completely new accounts
  • Provide you more than a few percent price premiums
  • Make up for poor market targeting
  • Make up for fundamentally slow market momentum
  • Fix functional short-comings in your products

Here’s the Point: Don’t get complacent because you have good relationships.

Don’t Shoot Yourself in the Foot

Believing that your relationships give you enormous power is, for the most part, fallacious thinking, and can actually ill-inform you on what you and your company need to do. Here are some examples:

  • If it’s all about relationships, what impetus will your engineering team have to design better products?
  • If it’s all about relationships, why should your firm ever reduce prices or negotiate terms?
  • If it’s about relationships, why should operations need to worry about quality? Or delivery?

Here’s the point: Bragging about the customer relationships you have can simply provide unjustifiable cover for others in the organization to not execute their job as effectively as they should.  Remember, it’s still a very competitive world out there.

One More Point: The Fallacy of the Rolodex of Relationships

More often than is advisable, a client will enthusiastically recruit a sales person based on the contacts that sales candidate has amassed during their illustrious sales career.  Sales people treasure and protect to the death, their sales contacts and consider that list as a strategic personal asset.  It becomes a key feature in the personal selling proposition they use in seeking a new job.

Rolodex provides a great tool for managing those.  However, even the best list of Rolodex or CRM-managed contacts, can rarely, for the long term make up for business shortcomings in product, service, delivery, quality, competitiveness and value.

Let me illustrate.  In 1970, General Motors had roughly a 50% share of the US auto market.  That market share was supported by an incredibly, well-established national network of dealers and sales people.  Everyone knew everyone.

Since 2000 General Motors had lost roughly 50% of that 50% share.

Here’s the Point: Relationships aren’t everything.

Recommendations:

As much as has been written in this blog about the fallacies and dangers of dependence on customer relationships, let me make a final few points.

  • You must continue to develop your business relationships
  • You must continue to nurture those relationships based on paying close attention to each of the key elements of the trust equation
  • You must not, for a moment, let the rest of your business team off the hook by bragging and convincing them they only need to depend on your ability to develop and maintain good customer relationships

*****

Copyright 2013 The QMP Group, Inc.   All Rights Reserved

Click to learn more about standard and tailored QMP Sales Skills and Process Workshops or Contact Us at 503-318-2696 to discuss your sales and sales management challenges.