Archive for category GENERAL DISCUSSION
The Ten Best Sales One-Liners of All Time
Posted by Rick Pranitis in GENERAL DISCUSSION on January 5, 2013
Great sales managers are great coaches. More often than not, they’ve worked deals “from soup to nuts,” and have “carried a bag” as individual contributors to sales teams early in their careers. Now it’s their job to motivate and develop inside and outside account executives to achieve goals and advance their careers.
To successfully motivate their teams, managers should first make themselves equal, rather than different. This often requires managers to “talk the talk” and make their points fast while educating teams.
What follows are ten of the best sales one-liners, Ever! Call them clichés, truisms, or idioms, whatever. Executives, sales managers, customers, industry pundits, and other sales reps use them all the time. This is only volume 1, and there are a whole lot more where these came from. Enjoy this first installment, and share with us in the comments which one-liners you use and hear most, as well as which ones you’d add to the list.
Ten of the Best Sales One-Liners. EVER!
- Just tell them what time it is; they don’t care how you built the watch.
- There’s no need to engineer the Starship Enterprise when all they need is budgetary pricing.
- If you can’t thoroughly demo your product, you’ll die on the vine.
- You prospect’s got a finely-tuned BS meter.
- You can’t expect to take a fishing boat out and just watch the fish jump into the boat.
- You won’t get by on just personality and good intentions.
- It’s better to lose in the 1st round than in the 15th.
- If you’re going to lose, don’t lose alone.
- If all you’ve got is a hammer in your hand, then everything will look like a nail.
- From a strategic perspective, this deal’s carved in butter.
Learn them. Know them. Live them
Having Problems With Your Sales Forecasting?
Posted by Rick Pranitis in GENERAL DISCUSSION on December 20, 2012
In virtually every conversation with a sales executive, at one point we get into a discussion about forecasting. Usually it starts with the executive mumbling something like, “Damn forecasts are worthless, I might was well flip a coin.” Being sensitive to these types of verbal cues, I usually reply something like, “Forecasting system not working for you?”
Then I just sit back and listen. Too often when organizations are finding they have issues with accurate forecasts, they put in strange processes to increase the accuracy of the forecast. I see strange sequences of forecasts, the “This may happen forecast,” moves to “I hope this will happen forecast,” to “I’m sure this will happen because you’re telling me it needs to happen forecast.”
There are lots of problems with forecasts. And truthfully, it’s always a challenge in developing a completely accurate forecast, but here are some thoughts which should help improve your accuracy.
What are we forecasting? A forecast isn’t “will we close this order some time?” A forecast is: “We expect to get and order for this amount by this date.” It has to have specificity in time and value. Forecasting accuracy should be measured based on ability to accurately predict time and value. In other words, if that $1M order comes in 180 days after it was originally forecast, there’s a business management and forecast integrity problem.
A forecast is about a deal, not a number. I talk to too many managers who are achieving forecasting to a number, “I have to forecast $10M this month!” They then look at their pipelines, saying, “I’ve got $20M of deals going into closing, surely I can make $1oM out of those.” The forecast is about a deal, “We believe we will close this deal for this amount by this date or time frame.” The forecast number becomes the aggregate of those deals closing in the timeframe. If you fall short of your target number, then you have to look, deal by deal, determining: “What can we do to close this deal by this date?” It requires a specific action plan and very close alignment with the customer’s buying process. You close the gap in a forecast by identifying specific deals and the actions needed to close those deals.
Bad forecast integrity indicates deeper problems with pipeline integrity and your selling process. The forecast is a natural outcome of the sales process. At some point in our selling process, we have confirmed where they are in their buying process, when they will make a decision, and their attitudes regarding our solution versus the alternatives. Based on where we and the customer are in the process, we can forecast it. We won’t hit it all the time, unexpected things may happen, but the process is pretty simple and can be very accurate.
So if we start missing forecasts consistently it creates deeper concerns. What’s the quality of our pipeline? Is it high quality, or do we have garbage that is misleading us? How well are we executing the sales process? A series of forecasted deals which repeatedly miss the mark shows a problem with the selling process. You either aren’t using it, it isn’t aligned with the customer buying process, or it’s a bad process.
Bad forecasts bring the quality of the entire pipeline, the sales process, and deal strategies into question. Everything is up for grabs, not just the forecast. There is doubt and no idea what the problem is, and no idea what to do to fix it. Is it a skills problem? Is it a competitiveness problem? Are you seeing shifts in the markets? It’s no longer is an issue about making the forecast, but an issue about your organization’s overall ability to consistently achieve goals. You end up not knowing what to attack to improve your business.
When you have consistently bad forecasts from an individual, it’s probably a skills problem. They probably don’t understand or aren’t using the sales process, they may be having problems with certain parts of the sales process, and they may be chasing the wrong deals. It’s actually pretty easy to start identifying this looking at their pipelines and deals.
When your organization has a consistently bad forecast, you have a systemic set of problems that you need to understand and fix. You don’t fix these problems by putting more rigor or steps into your forecasting process; “We start with promises, then move to blood commits, and then move into be-headings?” Putting these phases into your forecasting process is dealing with the symptoms, not the root problems. Focus on the quality of your pipeline, clean out the garbage. Focus on the sales process, is it right, is it aligned with customer buying processes, and most importantly are your people executing it with integrity?
Leverage the reports in your CRM system to better understand the quality of your forecasts and begin to isolate problems. You can easily look at slips/misses. The pipeline quality reports should be directly correlated to the quality of your forecasts. Stuck deals, average age in phase, total sales cycles, pipeline velocity, win rates, all are indicators and impact forecast quality. Opportunity reporting gives you great clues. Consistently changing “estimated close dates,” lack of progression, and others are directly tied to forecast quality.
There are other things you can leverage to improve the quality of your forecasting. In some cases, data analytics, tied to your deals can help improve the quality of forecasting. Assessing “odds to win” and “timing” using tools focused on the customer decision-making and buying cycle can improve the quality of the forecast.
Bad forecasts are a problem. Consistently bad forecasts indicate you have a deeper problem—and it’s not about forecasting!
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The Three Critical B2B Sales Pipeline Metrics
Posted by Rick Pranitis in GENERAL DISCUSSION on November 20, 2012
How healthy is your sales pipeline right now? And what steps are you taking to progressively improve its fitness? Just as your own doctor might measure your body temperature, heart rate and blood pressure before putting you on a personal fitness regime, a pipeline doctor would want to understand your qualified pipeline value, average sales velocity and average sales win rate – and how these factors had changed over time – before coming up with their diagnosis.
Here’s why these three measures are so important…
There are three fundamental things you can do to improve your sales figures: you can generate more qualified sales opportunities, you can shorten your average sales cycles, and you can increase your average sales win rates. Steadily improving all three factors will have a powerful multiplier effect on your sales – and dramatically improve your revenue predictability.
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Bottlenecks and Best Practice
But if you’re not regularly measuring and reviewing all three factors at every level in your sales organization – from each individual sales person through to the whole sales team – you’ll struggle to identify either where your most pressing performance bottlenecks lie or (and this is equally important) to identify pockets of best practice which if adopted more widely would enable you to systematically increase your overall sales performance.
Value, Velocity and Win Rate
Proactive pipeline management involves paying particularly close attention to all three factors – value, velocity and win rate. Together they represent what we have come to regard as the essential pipeline success formula.
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And just in case you wonder whether the effort is worthwhile, a series of studies have shown that organizations that take a data-driven approach to proactive pipeline management show significantly accelerated revenue growth compared to their peers.
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Qualified Pipeline Value
The key word here is qualified. Measuring pipeline value without imposing a company-wide universally agreed definition of what a qualified sales opportunity ought to look like will simply generate misleading, unhelpful and ultimately useless data. And “leads” or “enquiries” don’t count. As I’ve pointed out before, tracking the number of leads generated in the absence of a consistent quality standard tells you nothing and may even lead you to do more of the wrong thing.
You’ll need to craft qualification criteria that address the specifics of your offering and your markets, but at minimum, a qualified sales opportunity must satisfy all of the following:
- Have they identified a clear need?
- Are they likely to buy something?
- Do we have a reasonable chance of winning?
- Would they make a good customer?
Sales Cycle Velocity
Most sales managers would acknowledge that the longer a deal hangs around in the pipeline, stuck at its current stage, the less likely they are to buy. Sales cycle velocity – the amount of time it takes for an opportunity to move from start to finish, and from stage to stage – is therefore an incredibly important predictor of sales success. And if you can shorten your average sales cycles, you have the capacity – without increasing your resources – to sell more.
Given all of this, it always surprises me to see CRM systems that are not set up to report on how long each deal has spent at each stage, or to throw up an exception report when opportunities have been stuck for long than the typical time taken for winning deals to progress. If you’re mot measuring or reporting on this, take an initiative today to deal with it. In fact, if your current CRM system can’t provide it, I would seriously think of changing it. It’s that important.
Sales Win Rate
This is an obvious metric, but even here not all organizations track it with enough granularity to learn the significant lessons this metric can provide. You need to be tracking all possible outcomes. In most complex B2B sales environments, there are at least four:
- You win the deal
- A competitor wins the deal
- The prospect decides to implement an internally developed solution
- The prospect decides to do nothing
You’ll miss the opportunity for incredibly valuable learning if you categorize the last three outcomes simply as “lost”. If you’re not evaluating the outcome of every opportunity into at least these four categories, I strongly suggest you start doing so today – and that you retrospectively analyze recent sales outcomes.
Measure at Every Level
My final recommendation is that you measure these three metrics at every level within your organization, as well as analyzing outcomes by source of opportunity – including comparing different marketing campaigns. You’ll inevitably find outliers in both directions: poor performance that clearly needs to be corrected, and exceptional success that needs to be replicated.
In fact, the latter may provide some of the most valuable learning opportunities: where are you currently being most successful today, what can you learn from this, and how can you enable the rest of the organization to embrace the winning habits you have identified?
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The Four Phases of Customer Evolution
Posted by Rick Pranitis in GENERAL DISCUSSION on November 10, 2012
There are only four customer phases, and all customers will be in one of these at all times. There are many erudite articles written about the interdependence between sales processes and buying processes, but – being primarily focused on new customer acquisition – many miss a critical consideration; The Four Phases of Customer Evolution.
Customers go through three Growing Phases and one Dying Phase. You should understand the phases and particularly the reason why customers more from the Growth Phases to the Dying Phase. The critical thing is not just to recognize which phase they are in – that is fairly obvious – but to understand that if they are to become a customer, then they will inevitably morph from phase to phase. It is only a matter of time.
The four phases are:
- Prospect
- Customer
- Loyal Customer
- Former Customer
The fundamental substance of all the management theory, strategic advice and best practice writings about customer management, key account management or account planning any should be to accelerate phase transition through the Growing Phases; phase 1, 2 and 3, and then decelerate the inevitable transition to phase 4, the Dying Phase.
Here are some facts to chew over:
- The cost of new customer acquisition is 500% that of customer retention
- Increasing customer retention by 2% equates to decreasing costs by 10%
- Reducing customer defections by 5% can increase profitability by up to 125% (depending on industry).
Source (Leading on the Edge of Chaos – Emmet C. Murphy and Mark A. Murphy)
The Road to Customer Defection
Before you read the rest of this section, I want you to consider two different scenarios. Each is real, and I hope you will easily identify with them both.
Scenario A: In the first scenario you (or your company) are selling a product or service to your customer. This scenario should be real and should relate specifically to your existing company. Stop and think for a minute about why prior customers have stopped doing business with you.
- Why have they left you or your company?
- What do you think are the top three reasons?
- Write them down – now, before you play out the next scenario.
Scenario B: In the second scenario; you are the customer. We might all be forgiven for thinking that being a customer is easier than being a supplier – but that is not always the case. In this scenario you need to think about the last time you (or your company) decided to stop doing business with a particular source.
If you take a personal perspective on this, that source might be a restaurant, a clothing store, a hairdresser, an online bookstore, an airline, or an online community. From the perspective of your company, the source may be your stationery provider, IT services supplier, sales trainer, telecommunication equipment vendor, or any one of the many other options.
Combine the personal and company perspectives (if you have both) and write down the top three reasons why you defected. If you are like most people, the answer to Scenario A will start with price or product features, and the answer to Scenario B is more likely to be more focused on ‘how I was treated’.
The problem is that in the real world these two scenarios converge and the disconnect between what suppliers think and the opinions of their customers send their relationship hurtling from a Growing Phase straight into the spiral of the Dying Phase.
Why do customers leave? The reality might be different than you think. According to Rightnow Technologies (now part of Oracle):
- 73% of customers leave because they are dissatisfied with customer service, but companies think just 21% leave for this reason.
- Company thinks that nearly half (48%) leave because of price, when in fact, according to the customer perspective, this happens only 25% of the time.
- The U.S. Small Business Administration and the U.S. Chamber of Commerce support these findings. According to their research:
- 68% leave because they are upset with the treatment they’ve received (Customer Service)
- 14% are dissatisfied with the product or service
Serenade your customer
You’ve abandoned me.
Love don’t live here anymore.
Just a vacancy
Love don’t live here anymore
The lyrics here are from the 1978 song Love don’t live here anymore by Rose Royce, an American soul and R&B group who had a number of hit singles in the 1970s. While the reference to this song might be a little contrived – I’m a sucker for musical references – the sentiment is well expressed and relevant.
If your customers leave you, it is because they don’t love you, and that is usually because they feel unloved. The reason they don’t love you is usually because they feel you have abandoned them. If there is a vacancy – your competitor will rush to fill it, and your customer will inevitably become a former customer.
It is hard to accept that the reason your customers don’t love you is because you have underserved them. It is much easier if you can point to price or product features as the determinants of defection. That hurts less because you can convince yourself that there is little you could have done about it.
Ask yourself this. If you knew that the customer was going to move from a Growing Phase to the Dying Phase, and there was nothing that you could do about price or product features, what actions would you take to serve them better so they would stay? So what are you waiting for? Write down your answers – and take action now.
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This article was originally posted by Donal Daly at DEALMAKER 360® on November 6, 2012
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Creating a Powerful Sales Plan
Posted by Rick Pranitis in GENERAL DISCUSSION on October 26, 2012
Professional sales people have a unique aspect to their job. They have the ability to decide what to do every moment of every day. The need to make such decisions as; where to go, who to see, who to call, and what to do sets a sales person apart from most other professionals.
I’ve often thought that the quality of this decision, more than any other single thing, dictates the quality of the sales person’s results. Consistently make effective decisions, and your results will improve. Make thoughtless, habitual or reactive decisions and your results will be sub-par. One of the ways to ensure that you make good decisions about your selling time is to create a comprehensive sales plan.
So just what is a sales plan? It’s a written, thoughtful set of decisions about the most effective things you can do. A sales plan should be the result of some good thinking, wherein you analyze and prioritize a number of different aspects of your job.
A good sales plan addresses different time durations and different aspects of your job.
Annual planning
Every sales person should discipline himself/herself to an annual planning retreat. Set a day or two aside, every year, to engage in some serious planning. Turn off the phone, shut down the email, and immerse yourself into deep thought about the coming year. Begin by specifying a series of annual sales goals. What, specifically, do you want to accomplish this year in your job? I recommend no more than five specific sales goals. Typically, one of these goals describes the total volume of sales dollars you want to create; another may describe the number of new customers you want to acquire; yet another may relate to the number of high potential customers with whom you want to increase your business. Regardless of what your goals are, an annual, written, specific set of goals is the beginning of a sales plan.
Next, give some thought, and express that thought on paper, as to your basic strategy to accomplish those goals. If you are going to acquire 20 new customers, for example, exactly what are you going to do in order to accomplish that annual goal?
Classify all your accounts by their potential. Rank them in order, identify the highest potential, and then plan to spend more time with the highest potential.
Re-organize your filing system; throw out the obsolete hard copies and delete the unnecessary electronic files.
To do this well, you will need to devote a full day or two. This annual exercise is the first part of a good sales plan.
Monthly plan
Next, you should develop a more detailed plan every month. Produce a one or two page document which contains your specific commitments to the most effective actions. Once again, you are required to analyze and prioritize your efforts in regards to a number of issues.
First, your monthly objectives: What do you want to accomplish relative to the annual goals that you set? If you said you wanted to sell $2,000,000 worth of your goods this year, how much do you have to sell this month? Each of your annual goals should have a monthly component.
Next, you should address your prospects and customers. In order of priority, in which prospects and customers should you invest your time? That priority often takes the form of a methodical and objective ranking into categories – typically A, B, and C – based on potential. The sales plan then describes your plan for coverage of the A’s and B’s.
You should address the CTM opportunities, regardless of where they occur. CTM stands for Closest to the Money. Analyze and prioritize your efforts related to those opportunities within your territory that are closest to the money. What are you going to do to bring each of them to fruition? Specify each, the dollar amount of the opportunity, and what your actions should be.
Your company may have certain key product or product lines that it wants to emphasize. If so, you’ll need to analyze and prioritize your efforts in regards to those product lines. What will you do this month to increase sales of those product lines? What specific actions will you take, in which specific accounts?
Finally, what will you do this month to improve yourself? What classes or seminars will you attend? What books will you read? To which CDs will you listen?
Note that all of this addresses not every action you will take, but rather the most effective actions. You can note these things on a page or two.
Don’t think that you can keep all this in your head, and skip the discipline of writing it down. Writing each specific action and strategy down, whether it’s on a yellow pad or a computer document, forces precise thinking. The written word also commits you to a degree much deeper than if you keep the idea locked in your head.
After you have completed this monthly sales plan, it’s time to schedule your time. Lay out a plan for each day for the next 30 days. Where will you plan to be, and who will you plan to see? Reflect first your priorities from your monthly plan. Then fill in the non-priority calls.
One irrefutable truth about being a sales person is: your days will rarely go completely according to plan. However, without a plan, you will have totally given up the ability to control and manage your time. By having a plan you have something to fall back on, something to refer to, some benchmark by which to measure the constant and urgent demands on your time.
So, there is an annual component to your sales plan, as well as a monthly discipline. But you are not finished yet.
Weekly plans
You need to reorganize and recommit to your monthly time and territory plan each week. Adjust your plan based on what actually happened the previous week. For example, if you didn’t get to see an ‘A’ account that you had planned, can you see them this week instead? Make your adjustments each week. At the end of the week, spend some time planning and preparing for the upcoming week.
Daily plans
Finally, you need to plan each sales call. What do you want to accomplish in each call? What do you need to prepare in order to accomplish it? Again, you’ll be more focused and more committed if you write down a specific outcome you would like to achieve in each sales call. Keep in mind sales is a process, consisting of a series of steps the buyer and seller take to arrive at a good decision. Your planned outcomes should be narrow and specific. Something like: “Acquire the information I need in order to structure a proposal,” instead of “Sell this account.”
The creation of a sales plan, as you can see, is not a simple, one-time event. Rather it is a discipline which involves a commitment of time and thoughtfulness at specific intervals in the year.
It is also not just an administrative requirement, but a powerful tool that enables a professional sales person to consistently make good decisions about the most important decisions s/he faces: Where to go and what to do!
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Six Essentials in Building a Value Proposition
Posted by Rick Pranitis in GENERAL DISCUSSION on October 23, 2012
A great deal of conversation these days is about the way the buying process has changed. Sales professionals are discovering they must step up their game to stay in line with customers’ expectations. One thing that hasn’t changed is the buyers’ expectation for receiving value in each transaction be it goods and services or just conversation. There’s been a good amount of interest in the” Value Proposition” as a method of satisfying this expectation and being a “silver bullet” to sales success.
There isn’t quick fix or an easy answer but you’re going to pursue this path here are essential six things to help smooth your value proposition journey.
1. Create first, communicate second
We often find that there is confusion between creating your value proposition and then how you take it and communicate it during the selling process or through marketing channels.
In my experience, it’s absolutely critical to do the high-level creation part BEFORE attempting to communicate the value proposition to your customers and potential customers. Doing it this way around makes the communication part, and therefore the selling part, so much easier. Suddenly we all become clear about the key messages. They’re obvious, simple, clear and based on reality. One of the biggest problems we come across is good sales professionals doing their best to create value messages in the absence of any wider understanding of where the source of their company value lies. Suddenly, the sales professional is forced to come up with a value proposition based on the latest opportunity – retrofitting their messages back into the rest of the organization. Hard work and almost impossible to achieve – I’ve seen many demoralized sales teams sweating this one.
2. Top down, not bottom up
It’s so much easier for sales people to have a clear, high-level, company-wide, value proposition created, and then they are free to tailor this to specific opportunities, rather than having to make them up from scratch. Also, doing it this way around (i.e. top-down) will reduce your cost of sale as you’ll know which opportunities are worth pursuing and which aren’t.
So the starting point needs to be company-wide, or division, or sector or product group, before translating the messages into major accounts or specific products or sales opportunities.
3. Involve all stakeholders
A value proposition is a promise of value to be delivered and a belief from the customer of the value that will be experienced. And you can’t create this by thinking up some clever words. You need input from many sources including people in your organization and your customers.
4. Understand customer risk
We use the value equation where Cost must also include the risk taken by the customer in choosing to buy from you and your company. Benefits are shown squared because the benefits you discover after going through the value proposition creation process must significantly outweigh the costs:
Value = Benefits – Cost
5. Value is not just rational
During the value proposition creation process, it’s not just the rational dimensions of the client’s organization that need to be taken into account but also the political and emotional/psychological. Look at the 3 dimensions of:
• Rational (price, ROI, speed and feeds, features etc.)
• Political (e.g. how is this going to affect the buyer’s job? How will this value proposition be received by their organization?)
• Emotional/psychological (how does the customer feel about you, your products/services and your company?)
6. Offerings deliver value
You can often achieve a huge surge in value for your customers, with very little outlay, by re-bundling or re-packaging existing offerings.
So, is a value proposition a silver bullet? No, it isn’t, but it will significantly help with lead generation, conversion rates and overall profitability but only if you put some blood, sweat and tears into the creation process first. Mine the silver first, hand-carve the bullet and then aim it at a precise target.
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Selling on Price is the Wrong Path to Follow
Posted by Rick Pranitis in GENERAL DISCUSSION on October 17, 2012
Earlier this month Mark Hunter of The Sales Hunter fame came out with a short and “dead on” accurate article about the serious consequences of slashing prices for the sake of making a sale. Now some of you may say this topic is being beat to death. I hear sales people constantly saying they understand and they realize the impact of such actions and so on and so on… But for some reason (and for far too many sales people) when it comes down to crunch time selling price suddenly becomes flexible. So now everybody, let’s review once more why selling on price is not the path to success;
- Somebody will always come along and offer what you’re offering for a slightly lower price than your price. Don’t think for a moment you are the only one who can offer a low price. As soon as you lower your price, you can expect somebody else to do the same.
- The people you sell to at a lower price will be customers who can’t afford to pay you full price. There will always be a group of customers who are seeking the lowest price, and if you think you’re somehow going to turn them into loyal customers who will pay you full price, you’re crazy. These people have zero desire to pay anything but the cheapest price.
- The customers you attract will see value in what you’re selling at the lower price, but will not see value at the full price. Why should they? If you sold it to them at a lower price, then that is what their expectations are built around.
- Customers who haggle with you wanting a lower price are the same ones that will haggle with you over everything. This is the bane of so many issues. Why do anything that would attract difficult customers? A smarter move would be to encourage them to buy from a competitor.
- The lower profit margin you’re making selling at the lower price is not going to give you or your company the level of profit you need to operate. If you’re not making a profit, there’s no way you can stay in business for very long. Not only do you need to make a profit on what you’re selling today, but you need to make enough profit to allow you to invest in building your business for tomorrow.
- You’re worth full price! Do you view yourself as a cheap person? Of course not! Perspective does matter and if you think you can make a sale only by lowering your price, it will become your go-to method. It will become your “normal.” If you want to see yourself successful and capable of being at the top of your industry, then you simply can’t sell on price alone. And you certainly can’t make a habit out of discounting.
Mark’s list is pretty comprehensive and the points are all valid. I would add one more: The customers’ perception of value goes beyond just the product or service you’re offering. That perception extends to you personally. If you’re ever going to be considered as a valued advisor or consultant i.e. sales professional – caving in on price whenever the negotiation process becomes difficult will destroy any creditability you may have established in the eyes of your client. You become just as much a commodity as the product or service you’re selling. And, you can be just as easily replaced by the next shiny bauble or offer which walks in the door.
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Five Ways to Keep Your Biggest Customer
Posted by Rick Pranitis in GENERAL DISCUSSION on October 11, 2012
Before you slash prices, check out these strategies for keeping your best customers happy and loyal.
Contrary to popular belief, a big customer that buys a lot of product from you is not necessarily a good thing. Big companies have a habit of pigeonholing smaller firms into being suppliers of commodity products. That way, they can play you off against your competition in order to push prices down. They don’t care whether you make any money on the deal because they can just switch to another vendor should the price drop drive you out of the business.
Now here’s the good news. There are five ways to defend against this kind of pricing game.
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Strategy #1: Differentiate Yourself. If your firm offers a needed product or service that no other company can provide, then it’s impossible for the big company to play you off against your competitors. To create that differentiation, you position your offering so that whatever is unique about it becomes a “must have” for that customer. There’s the story of a lost a sale of a million-dollar publishing system because the competitor convinced the customer that they needed the ability to set type around the shape of a hand print, something that the customer had never done before and would never do in the future.
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Strategy #2: Provide Expertise. If you or your firm can offer expertise that the customer needs in order to fulfill their goals, you can be strategic to them, even if you’re a commodity supplier. For example, a company that sells glue for manufacturing consumer electronics might have world-class expertise in volume manufacturing that, if shared with their customer, would make them more profitable. That expertise is then periodically “lent” to the customer in order to reduce their manufacturing costs, thereby making an ongoing relationship valuable to the customer.
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Strategy #3: Create a High Replacement Cost. If it would cost the customer a prohibitive amount to replace your firm’s products and services, they’re far less likely to replace you with another competitor. What’s important here is that you create the high replacement cost AFTER you’ve made the sale, because prior to the sale, the big customer (if they’re at all self-aware) are likely to see the replacement cost as liability and thus be less likely to buy from you in the first place.
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Strategy #4: Really Know the Account. If you can get yourself involved in the inner workings of the customer account and become part of their strategic planning, they’ll begin to see you as a consultant rather than a mere supplier. For example, IBM sometimes assigns an employee as a general IT consultant inside Fortune 100 firms. In addition to being a sales representative, that employee is mandated to act as an independent IT resource acts as a clearing house for any problems that occur with IBM’s offerings.
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Strategy #5: Generate Reverse Credibility. This one is tricky, because credibility usually flows from the larger company to the smaller one. (e.g. “Our customer list includes GM and Oracle!”) However, if a smaller firm has a market reputation that helps the larger firm create credibility in a new market, the larger firm will may see the relationship as strategic. Example: the Taiwanese computer manufacturer Acer used to publicly tout its’ relationship with boutique studio FrogDesign in order to seem more “cool” in the consumer PC space.
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Neil Rackham Speaks to the Changing Face of B2B Buying
Posted by Rick Pranitis in GENERAL DISCUSSION on October 4, 2012
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Neil Rackham – the man who brought us SPIN® Selling – offers some fresh perspectives on the changing state of B2B buying. If you’re a serious Sales Professional dedicated to remaining on the cutting edge of your profession, this short video is a must-watch. Here are some of the key points:
- In a fast moving world, your prospects are struggling to balance coping with their current situation with the need to anticipate and pre-empt future events
- Today’s top sales people are challenging their prospects with ideas and possibilities before the customer has even recognized they have a need
- The changing face of B2B buying behavior is affecting every stage of the “sales process” – vendors must adapt or they will become irrelevant
To find out more, watch this video:
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If video fails to load/start, click this link: Neil Rackham speaks to the changing state of B2B buying
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Structuring an Effective Sales Funnel
Posted by Rick Pranitis in GENERAL DISCUSSION on October 2, 2012
B2B companies often represent their sales process as a funnel. The sales funnel usually starts with qualified (or “sales ready”) leads and ends with closed-won opportunities. Modern sales methodologies insist on managing this funnel professionally. But how should it be structured in the first place? Obviously, the answer will vary from company to company, but here are three quick tips to hone your funnel.
Meaningful Internal Transitions –a good way to choose the right sales funnel stages is to focus on “meaningful transitions”, i.e. borders between stages representing a shift in the sales process. In this respect, the distinction between “continuations” and “advances” established by the SPIN Selling model is very useful:
- A continuation is an action that is useful in the context of the sale (e.g. sending the prospect a presentation he requested) but does not “move the sale forward”.
- An advance is an action that moves the sale forward (e.g. answering an RFP formally).
This distinction gives you an “internal view” of the best structure for your sales funnel, as advances obviously signal borders between funnel stages.
Meaningful External Transitions – you can also take the “external view” of the transition of opportunities from one stage of your sales funnel to the next. The idea here is to consider your sales process from the perspective of the buyer. What information are they looking for in each stage of the funnel? How do they confirm you have answered their questions? From this, you can infer the content of each funnel stage, hence the overall structure of your sales funnel.
Reflect and Refine – there is another, potentially easier way to find the right structure for your sales funnel: start with the time-tested SPANCO model (see below) and refine it based on the analysis of your funnel dynamics. You are looking for two indicators.
- “Reasonable” conversion rates from one stage of the funnel to another: as a counter-example, a seven-stage funnel with a 55% conversion rate from stage one to stage two would obviously be weird.
- Balanced stage durations: funnel stages should have approximately the same length. This is not a question of aesthetics, but of convenience – it makes identifying potential delays easier and thus reduces monitoring costs.
Over time, pipeline dynamics will reflect both the internal and external view of the structure of your funnel. The key is to keep monitoring them.
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Quick foot note on the SPANCO Model: Just in case you need a reminder, and as I hate making a reference in an article (especially when it’s an acronym) without explanation and/or clarification.
“SPANCO” stands for:
- Suspect – Definition of the target
- Prospect – Identification of the lead
- Approach – Analysis – Evaluation and qualification of requirements, identification of the solution
- Negotiation – Negotiation process
- Closing – Finalization of the order
- Order Ongoing – Account follow-up (up and cross-selling, etc.) Order management and sales monitoring
The SPANCO method offers visibility for each lead and progress at the various phases of the sales process. It also provides you with an ongoing vision of the rate of sales activity in your company.
By clearly identifying the stages in the sales process, you will be able to see the state of your portfolio of leads, so that at any moment, the salesperson (and their line management) can identify where and how to intervene in order to turn a lead into a customer.
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