The Six Common Sales Myths

Posted on March 13, 2014June 21, 2018 by Jerry Vieira

Over our 20+ years of working with sales teams in a wide diversity of industries, we have seen and noted Six Common Sales Myths, each of which hinders success. They are explained in a series of articles published in our QMP Insights Blog. The article titles and links are listed below. Simply click the title link to open and read each.

Dispelling these myths can quickly improve the productivity of your sales team.

Be forewarned, however. Some of these concepts might be controversial or run counter to the established sales culture within your firm. So, handle them with care.

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

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

Myth #3 – “Sales is all About Relationships”

Myth #4 – “It’s a Price-Driven Market“

Myth #5 – “Closing Techniques are Effective“

Myth #6 – “The Biggest Accounts are the Best Targets

Click here to read the complete Six Common Sales Myths Series.

*****

For information on the QMP Sales Process Improvements and Sales Training Programs call us at 503.318.2696, email to qmp1@qmpassociates.com or visit our Contact Us page and tell us of your challenges. We’re here to help.

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

Posted on January 6, 2013May 18, 2015 by Jerry Vieira

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.

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.

*********

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

Posted on January 3, 2013March 20, 2014 by Jerry Vieira

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.

“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”

*****

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

Posted on January 2, 2013April 29, 2014 by Jerry Vieira

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.

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

*****

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.

Common Sales Myth #4 – It’s a Price-Driven Market

Posted on January 1, 2013March 13, 2014 by Jerry Vieira

I truly sympathize with sales people who are dealing with commodity managers in large corporate purchasing organizations. Those procurement specialists can be brutal in negotiation. More and more they are driven by corporate edicts to “source overseas” or “reduce commodity purchase costs by 3% per year” or to “reduce the number of suppliers by 20%”.

The truth is, classifying what they do as “Negotiation” is not fair to Merriam-Webster’s definition of the word – or to anyone for that matter.

Can it get any tougher for manufacturers? The Rock

These days, sales people and their parent manufacturing companies commonly find themselves confronting a series of “non-negotiable” buyer requirements that would be laughable, if they weren’t so real and becoming more common:

– 90 day payment terms

– Guaranteed cost-downs

– The lowest cost – period!

– The highest possible on-time delivery

– Impeccable quality

– Unlimited time frame on returns

– “No-questions asked” returns

– No-charge, collaborative up-front engineering and/or marketing cost sharing

– Transparent margin calculations

– And the requirement to keep a buffer inventory of finished parts in the factory – owned, of course, by the supplier

The not-too-thinly veiled threat hidden among those requirements is, “If you can’t meet these terms, we can always find someone else to supply that part/service in Mexico, Asia, Brazil, India” or even, “We’ll build those parts here – ourselves, inside”.

We talked about the Rock above. Here’s the Hard Place.

In the banker’s office the CEO and CFO of the small manufacturing firm are hearing:

– Your cash flow is slowing

– Your margins are slipping

– Your credit line needs to be reduced and renegotiated

– We need to see your financials, monthly

– We need to tighten up our loan portfolio because of the lending debacle of 2008

– and… “No, you can’t have any more leeway”.

So, between the banks pushing for higher prices and margins on your products to improve cash flow (or you lose your financing), and your big customers pushing for lower and lower prices, what’s a small manufacturing firm to do? And, how does a sales person make a living if he isn’t price competitive. Isn’t some margin, albeit low margin, better than losing a customer?

What Price Competition Really Means

Price-driven competition means that one or more of the following statements are true:

The buyers in your target market perceive no meaningful performance or value differences between products from different suppliers – including yours
Your product offering actually has no real and meaningful differentiation compared to your competition for those customers in that target market segment
You, as a sales person, or your marketing team, are doing a very poor job of communicating your meaningful, market-specific differentiation to customers in that market
You are unable to economically quantify the value your product can deliver to customers in that market
You are aimed at the wrong market and customers – a market for which your differentiation does not actually deliver meaningful, economic, emotional or physical value

We have seen all of these situations in our client engagements – typically disguised and drowned out by the sales person’s pleading and cries to “drop the price”.

So What Can Be Done About This Kind of Situation?

The simple, yet most effective answer is: Decide which of the five statements above are true – then set about fixing them.

It is actually easier than you might imagine.

A Case in Point 1: Wrong Market Targeting

A client of ours had a new product that wasn’t selling well. It was price disadvantaged by a factor of 3 over competitive offerings in the general market!! In spite of this, the new business development team was hustling to set up general distributors across the country. They were counting on a major price reduction they were politicking for with corporate to spur sales – when in fact corporate was quietly considering shutting the product line down.

We were asked to determine whether the product line was worth saving.

What little sales there were, were focused in two very narrow markets. Simply by asking customers that bought the few units that were sold in each of these markets why they bought this “over-priced” alternative, a set of inherent, here-to-fore un-promoted competitive advantages were revealed.

Then simply by pivoting the sales team to focus on the market in which the most compelling benefits were revealed the following results were realized:

– Not only did the price not have to be reduced, the market’s desire for added features quickly brought the average selling price of the top model to 4X the original price!

– The single largest order for this product had been $20,000 – now with focus and a re-promoted and re-emphasized set of market-specific benefits the largest order from a customer exceeded $1,000,000

– The number of new customers buying this product quickly rose from 2 to over 150

– Price reductions were no longer discussed

– The effort to saturate the market with distribution outlets was no longer considered necessary and saved a ton of money

Case in Point 2: Poor Economic Benefits Communication

In another instance 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 root cause was discovered to be the distributor sales manager who simply “.. did not believe the economic argument” and refused to promote it – in spite of the customer testimonials to the effect of the savings realized.

A rapid individual re-education was required, followed by a re-training of the distribution sales force, and the product’s sales turned up shortly afterwards.

Case in Point 3: The CEO Gap

I once asked a group of 12 B2B CEOs 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 also asked them to identify an ideal customer for that product.

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

If they can’t do it – can their sales people?

The Point:

Price-driven markets and situations are often a symptom of; a) misdirected market targeting or b) a lack of understanding of, and poor ability to communicate, market-specific economic, emotional or physical benefits of your product offerings to potential customers.

Customers buy for their own reasons, not yours. No matter what you have convinced yourselves about the value customers should see, they saw what they were looking for when they decided to buy. Sometimes it’s not what you want them to see, but if it worked it is delivering real value.

So, if your sales people are screaming for price reductions and you have customers buying when you are not the cheapest price – those customers are seeing something you are not. You need to find out what that is and why. And if they are not buying when the economic case is real, independent of the price, your communication is broken somewhere along the line.

Oh yeah, one final point. If price was truly the ultimate deciding point for decisions, we’d all be driving Versas. If it helps, here’s a link to Car and Drivers article on the 10 Cheapest Cars

*****

If you’d like to learn more about dealing with price-based competition call Jerry Vieira, CMC at 503.318.2696 or email to jgv@qmpassocites.com. The QMP Website is at www.TheQMPGroup.com and more insights can be found at The QMP Insights Blog

Common Sales Myth #5 – Closing Techniques are Effective

Posted on January 1, 2013March 13, 2014 by wadmin

Let’s start this discussion with a stipulation that all successful sales have to go through some sort of closing stage. Nothing happens until a customer or client agrees to pay your company for the delivery of a service or a product. So, in the strictest sense, I guess we can call that a “close”. We can also imagine that all commerce in the world would come to a screeching halt unless some kind of transaction closing happened.

So, good closing techniques are essential – right? And if that’s so why am I targeting closing techniques as a myth?

A Closing Process is Different than a Closing Technique

A “Closing Process” is likely to be mechanistic. Get the quantity and delivery dates correct, get the PO issued and confirm with the customer your ability to meet the delivery schedule. These days that process may be enabled by all sorts of mobile systems, and field inventory accessibility tools. That’s mechanistic closing.

“Closing Techniques” are something different all-together. Closing Techniques are many times designed to manipulate the emotions of the buyer, or to create a sense of urgency, guilt or fear, toward the end of triggering a commitment to buy. At one level, an example might be a car salesman saying something like, “Well, these models are going fast. In fact, there was a guy in here earlier that test drove and liked the exact car you just expressed an interest in. He said he was bringing his wife back this evening for a final decision.” Or, in a business-to-business environment, “We are just about at capacity and if you really need delivery in July, we need to get your order committed and on the schedule no later than end of this week.”

Well before you assume that closing techniques are cool, perhaps even having been indoctrinated by the training your own sales management required, consider the following information – then decide for yourself.

The Impact of being “Closed” by a “Closing Technique”

Neil Rackham in his book “SPIN Selling” reveals the results of 10 years of research done by the Huthwaite Center into high $-value sales success, analyzing 10,000 sales people and 35,000 sales calls in 27 countries. They studied 116 factors that might contribute to sales success.

The results of that study concluded that customers with which “Closing Techniques” were used (emotional, urgency or fear) were:

Less likely to buy
Less likely to re-buy
Less likely to be satisfied after the buy

Admittedly that is an extremely brief description of his work and its conclusions. But it is compelling – and I strongly recommend all sales managers read “SPIN Selling“. It may alter, for the better and forever, your thoughts about training your sales people to use “Assumptive” closes, the “Standing Room Only” close, the “Alternative” close, or any other trick closing technique.

The Huthwaite SPIN model offers an excellent, and more effective, sales process alternative. SPIN is an achronym, and stands for Situation, Problem, Implication and Need-Payoff. The SPIN selling process trains people how to use questions of each type to win a sale.

So, Why is So Much Emphasis Still Placed on the Training and Use of “Closing Techniques”?

Today, the pressure on Sales Managers to produce sales results is higher than it has been in years. Foreign and price-based competition, combined with a still iffy and sluggish economy is resulting in significant pressure on small-to-mid-sized firms. The result is that CEOs, Owners and Sales Managers believe that closing techniques will somehow move a sale forward more quickly. But, in my experience I find that they are, for the most part, ignorant of what the data from the Huthwaite study reveal – and ignorant of other more effective sales techniques. And, they may be pressed to find the time or money to embark upon such a change of direction and approach in mid-stride.

Customer and Client Collaboration Works Much Better

So rather than disenfranchising your sales prospects with slick closing techniques, consider a sales approach more like the Winter Olympics sport of curling. A good sales person is like the “sweeper” who, through patient and detailed questioning, problem solving and collaboration leads the customer to the best answer to help them achieve their goal.

*****

Common Sales Myth #6 – The Biggest Accounts are the Best

Posted on December 31, 2012March 20, 2014 by Jerry Vieira

Here is the last in the series of Six Common Sales Myths.

For small to mid-size businesses, the decision to commit resources to target a large account should considered carefully. The primary considerations are: “What are the implications of winning?” and “How, should we go about it?”

So let me provide you both sides of the story.

Why the Largest Accounts are NOT the Best Sales Targets

The Competition is the Highest: Sales managers and sales people almost universally drool over the thought of landing the big account. Some folks call them “Whales”. With these whales come visions of top line revenue waves carrying on their crests big commission checks and bonus trips to Bermuda for exceeding sales production quotas. The bad news is that every competitor’s salesperson is striving for that same, beach-front room in Bermuda.

It Reduces Your Negotiating Power: Have you ever been presented with 90-day or 120-day payment terms by your large customers? Have you been confronted by corporate edicts from your large customers to buy overseas, or forced to share your product cost models or had to make a pledge of cost-downs (targeted and contracted cost reductions delivered directly to the customer). All of these can be relentless.

You May Become Too Dependent on Them: Bankers, these days, have tightened their requirements for business loans. One of the things they look closely at is the vulnerability associated with one customer presenting too large a proportion of a firm’s business. Having a hefty chunk of business from one large customer may also make one complacent.

Under What Circumstances Can Large Clients be Good?

When You Are Selling a Unique Value Proposition That Is IP Protected: This greatly relieves the pricing pressure and competitive threats – but it is likely short-lived.

When you are adding desperately needed capacity to overheated market demand for your product/service commodity: When there are overall industry shortages of the product or service commodity you deliver, because of very high market demand for your customer’s products, those large “whales” swim a lot farther to find the krill they need to survive. They also become a lot less demanding. Again, this somewhat relieves the discomfort associated with working with large customer accounts – but heated up industry demand does not last forever.

When Your Large Customer is Enlightened: Enlightened means they have embraced the concept of true partnership – recognizing the need for mutual investment, mutual trust, mutual innovation and mutual ROI.

When Decision Making is De-centralized: De-centralized decision making increases the probability that you will find either: a) an enlightened decision maker in one or more of the myriad divisions of the “whale” or, b) divisions and circumstances to which you can deliver significant value from your company’s specific combination of value proposition and differentiation.

When They Spur You on to Innovation or Breakthroughs: The promise of a big payoff, with lots of business from a large customer, can spur creativity and product innovation. What it should not encourage is gambling. By gambling, I mean taking a long-shot that requires stretching beyond reason the laws of physics or the organization’s overall capabilities. Such gambling can quickly destabilize the financial safety net of the firm.

How to Eat a Whale

Yes, yes. No surprise. The answer is one bite at a time. But where you bite first is the real question. Here are some guidelines on selecting where your bite will be most productive, profitable and nourishing.

There are 6 basic strategies in war and business – 3 F’s and 3 D’s, and no, these F’s and D’s in no way reflect my 6^th grade report card. Here are the strategies, by name:

– Frontal

– Fragment

– Flank

– Defend

– Depart

– Develop

The subject of strategy is simply too large to cover in this blog post, so suffice it to say that 5,000 years of military history and 75 years of marketing science have demonstrated, unequivocally, that the most productive strategic combination from the list above is the combination of Fragmentation (segmenting) & Flanking (differentiation). History and research have also demonstrated that frontal assaults can lead to disaster even in the case of great initial success. Remember Napoleon in Russia, Lee at Gettysburg, the English at Gallipoli, the German army in Russia and the Charge of the Light Brigade in the Crimean War. Or, in business terms, think Texas Instruments’ frontal assault on the watch market, Raychem in fiber optics and IBM in PCs. All were frontal assaults by large, highly confident organizations with huge assets behind them. All failed miserably.

By Fragmentation we mean, finding a business segment or Division of the “whale” to which your value proposition provides disproportionate economic value compared to its cost. By Flank we mean identifying, matching, communicating and demonstrating your differentiated value to the fragmented business segment that gets the most value from it, in effect, multiplying your overall value proposition.

A Case in Point:

Long before I was a market strategy and sales consultant, I was involved in a business that sold factory automation software. The division was attempting to sell this software solution to some of the largest, multi-site, multi-divisional manufacturers in the United States. We were spurred on by the knowledge that every large manufacturer we spoke with had active, funded corporate programs to find solutions to the common manufacturing challenge extant in all their manufacturing business units.

Talking with these corporate types, our software team energetically began to design and add capabilities to our system to assure we could handle all of the needs they had identified.

Unbeknownst to us, a competitor had been making inroads with what we perceived as a vastly inferior, inconsequential, less complete offering. They were selling low level, simple solutions into the divisions where decisions did not require corporate “influence”. They were, in effect, fragmenting the account -taking lots of little bites of the whale. By the time we had developed our comprehensive solution, the low level competitive solution had penetrated so expansively, in so many fragments of the business, that retrofitting was out of the question.

This is just one example of how subversive fragmentation can be used to penetrate a large account – one small bite at a time.

The Take-Away:

Large accounts are not inherently good or bad sales targets. They are good or bad sales targets depending on:

the strategy used to penetrate them,
the “enlightened partnership nature” of their corporate procurement,
the centralized or decentralized nature of their decision making,
the strength of your IP and the economic value proposition it delivers, and
whether or not you are adding industry capacity to overheated market demand

That’s the long and short of it.

For more information regarding QMP’s Sales Process and Skills Improvement Workshop or Sales Improvement Consulting Services, call to 503.318.2696 or connect through our Contact Us page.

*****