Posts Tagged SALES BEST PRACTICES
Are We Moving Beyond The Consultative Sale Model?
Posted by Rick Pranitis in GENERAL DISCUSSION on March 21, 2013
If you look back over the last hundred years or so, there have been three or four major shifts in how major organizations sell. Each period was dominated by a specific sales model and best practices for implementing that model.
Clearly the “king of the hill” for the last thirty to forty years has been Consultative Selling. Consultative Selling emphasizes the importance of moving from a product-centric to a customer-centric sale. A focus is placed on doing a superior job in building relationships and uncovering and developing customer needs. The art and science of asking questions is a pivotal skill set.
Now for sure, each business organization and each training company has their own particular twist on Consultative Selling – for example: different questioning frameworks. But the underlying assumptions and fundamental skills are the same.
It is important to highlight, as compared to the product-centric approach, Consultative Selling has proven to be a dramatic improvement – it has worked and worked well.
With that said, if one looks very carefully, it’s possible to discern the emergence of a new model for selling in B2B markets. Like most paradigm shifts the change is not happening everywhere, all at once – over night. Instead, the change is emerging in phases with some markets and companies spearheading the way.
The important point is to be aware a change is happening and to start exploring the importance of the shift for your organization. With this in mind, let’s take an initial look at the new sales model and explore why the change is occurring.
This new sales model maintains a customer-centric approach, but the assumptions about the expectations of the customer are different. Let’s examine that difference.
Some customers are changing from wanting consultative sales people to wanting expert sales people. These customers are becoming increasingly impatient with sales people who consistently start calls with a “discover your pain” discussion. They expect the sales person to have a good handle on their needs and interests before the call. So time in the call can be spent on diagnosing and integrating the problems and on generating alternative innovative solutions which will have a positive impact on the customer’s business.
In order to conduct this type of call, the sales person must know beforehand the economic, political, market, and regulatory trends driving the customer’s business. With this knowledge in hand, they can bring a point of view to the discussion, ask second and third-level questions and work with the customer to formulate a business solution, as opposed to, starting with a basic discovery conversation. Today’s problems are complex and time matters. So customers cannot afford to start at square one to help every sales person understand their business issues.
Anytime there is a paradigm shift, it’s interesting to ask the question: Why now? Usually there are a number of voices speaking out but seldom is there total consensus. But what is common is some trend which defines the change and a match that ignites the change.
In this case it could be speculated the underlying driver is the fact customers in a wide variety of markets are facing the necessity to up their game. Market economics are demanding, competition is tough and getter tougher and a lot of the old answers have been played out.
So business-as-usual is not going to carry the day and changes which are simply incremental may help you to survive but not to prosper. Customers need new ideas they can use to innovate their business and they are expecting their suppliers to help. This business dynamic has been occurring for some time and some companies have gone through transformational changes in order to adjust.
But, what was the match that lit the fire for change in the sales function? Again consensus is unlikely to be found … but here’s something to consider.
The match which started the movement toward Consultative Selling – the key event which brought Consultative Selling to emerge – was the research done by Neil Rackham’s Huthwaite Research Group. This was subsequently turned into the all-time best seller – SPIN Selling. The research provided the credibility and the book provided the how-to.
As was the case forty years ago, a new piece of research has been conducted and a new book has been published to provide the foundation for change. In this case, the research was done by the Sales Executive Council and the book was authored by Matthew Dixon and Brent Adamson. The book is entitled The Challenger Sale.
It’s always hard to tell whether a new set of ideas are a vanguard for an important change or simply a creative fad for promoting discussions. In this case, you may not want to bet against the former.
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This article was originally posted by Richard Ruff on June 20, 2012 to the Sales Training Blog
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Successful Selling is a Journey
Posted by Rick Pranitis in GENERAL DISCUSSION on February 28, 2013
The sales process is a journey. If the customer doesn’t understand where you’re headed and why they should come along, they won’t. Making a sale should be easy, especially when you have the right product at the right time in front of the right person. But too many people try and make it more complicated than it needs to be, and lose the prospective client in the process.
Here’s five “keep it simple” rules which can keep you on track and help get you to a successful close.
Cut to the chase.
A good sales person doesn’t waste time with filler words. They start talking about their product right away. Here’s an example; a website developer calls your company and starts by saying, “I am glad I finally got a hold of you. It took me more than 10 minutes to find your contact information on your website. My company does web development, and we could help you quickly fix that. Your customers would then be less frustrated and more easily able to contact you. Can I go over the site with you and find out what else you might like it to be able to do?” As the person being pitched, I am now fully engaged in the web developer’s product–because he showed me he did his homework, and can solve a problem I didn’t know I had.
Skip the jargon.
Whether your product is technical in nature or you just tend to be on the know-it-all side of the spectrum, find a simple way to explain your product which anyone can follow. Customers don’t want a lengthy explanation; they want to understand right away. Recently I was looking to buy a new mattress and was confronted with all kinds of features to choose from. Rather than use empty pseudo-technical terms like moisture-wick and memory foam, a salesperson carefully went over why his mattress would last longer, how its structure would keep my wife and me from waking each other with our movements, and why the two different materials on its surface would help us be comfortable in any weather.
Paint a picture.
You’ll not always have the luxury of meeting with your customer face to face. Learn how to describe your product in a way that even someone who’s never seen it can imagine what it is. Recently I worked with a company who sold products over the phone. They have several items which are made of lesser-known wood species, so they can be hard for the customer to envision. They added a new product to the line and I had not yet seen it, but I heard one of the sales reps describing it to a customer as looking like the inside of a tree when it’s freshly cut. I knew immediately that it was lighter in color, had a ring pattern, and a visible grain.
Get curious.
When you speak to a customer, concentrate on finding out about the customer instead of making your pitch. Start by asking open-ended questions, and then by carefully listening to the answers you’ll find you’ll always get further than delivering a monologue. A bank I never would have considered recently landed a meeting with me because the sales person, after hearing I was not interested in changing credit card processors, asked me if there was anything I was frustrated with at my current bank. As it happened, there had been a recent frustrating situation with my current bank and I was mad enough to want to talk about it, and he was astute enough to carefully connect my discontent to how his bank is different.
Make it matter.
Your product may have a ton of benefits, but they’re worthless if the customer you’re trying to sell to doesn’t need them. Be able to constantly reframe your product benefits so the particular customer with whom you’re speaking understands the direct impact the product could have on their world. Our current health insurance broker won my business not because he explained to me how he was going to save me money (which wasn’t particularly a priority for me), but because his product offered a web portal that was able to help my employees clearly understand their health care options, and made my job as the administrator less burdensome. Those were the high priorities on my list.
A good way to think of selling is like a journey on which you are leading your customer. If the customer doesn’t understand where you’re headed and why they should come along, they will either choose not to take the trip, or wander off in a different direction midway through. All you have to do is get them excited about the destination, tell them all the beautiful things they will see along the way, and answer any questions so they feels safe and can enjoy the route.
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Never End a Sales Call With; “I’ll Send You Some Information”
Posted by Rick Pranitis in GENERAL DISCUSSION on February 9, 2013
This is especially true if it’s you, the salesperson, who has offered the idea up to send the prospect some information. Although you might think you’ve done a good job, what you’ve really done is give the customer an excuse to end the meeting.
If your sales process requires several sales calls, then saying you are going to send them some information can work — but only if you’ve been able to first uncover the following:
- A specific need the customer has shared with you that you believe you can help them with.
- A level of confidence the customer has placed in you that what you send them they will place value in.
- The knowledge the person to whom you’re going to send the information is indeed the person making the decision.
If you can’t get answers to these three things, then why should you believe that what you’re going to send them is going to move the selling process forward? The odds are far greater the process is going to go nowhere.
For customers this is an easy to way to come across as being courteous, but really what they’re doing is jerking you around. There is no reason for you to go through the effort of doing more work if there is little to no chance of a sale materializing. Sending the customer information may give you a warm feeling, but don’t go kidding yourself. What you’re going to send them isn’t going to do anything.
When you don’t know where the call is going and you’re trying to figure out a viable next step, the process should be:
- Find something you and the customer can agree on.
- Gain the customer’s permission to allow you to follow up with them at a later point in time.
With these two things, you can now go forward and develop a better list of questions you can use to engage the customer. Your challenge on the next phone call or the next meeting is to get the customer to have their confidence in you increase because of your level of competence.
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This article was originally posted to The Sales Motivation Blog by Mark Hunter on October 3, 2012
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Eight Reasons Great Leaders Let People Fail
Posted by Rick Pranitis in SALES LEADERSHIP on January 28, 2013
Sales leaders, how comfortable are you letting failure happen? Are you OK letting your sales manager make a mistake? Are you OK letting the sales rep lose a deal? What do you do when you see a flaw in the strategy of your sales V.P.? Do you let them execute the plan?
What should you do when you see failure on the horizon? — Let it happen!
Letting failure happen is one of the most difficult challenges of sales leaders and other leaders alike. No one likes failure, especially when we see it coming. The best leaders know this however and let it happen anyway.
Why let failure happen?
Failure is the only way to learn:
Failure is the only way we learn. As leaders we need and want people to learn and grow. Failure is a part of the learning process. If people aren’t allowed to fail, they won’t learn and without learning, they won’t grow.
It creates ownership:
When we don’t let others fail, we strip them of ownership. When we don’t let people fail, we in essence make the decision for them. We don’t let them make the final call. When people don’t get to make the call, they don’t feel attached to the end result; good or bad. Ownership is important to creating accountability. We want our people to feel ownership for their decisions and the consequences; good or bad.
People need to make their own decisions:
At the end of the day, people have to make their own decisions. They have to be empowered to make the decisions they think will work best. Preventing people from failing takes away their ability to make decisions. We have to let people chose for themselves.
It creates accountability
When people make their own decisions, it creates accountability. We can’t hold people accountable for outcomes when they aren’t given the latitude to choose for themselves. When we don’t let people fail, it’s because we chose for them. We disagreed with an approach, we saw a flaw in the thinking, and we did the work for them. When we step into avoid failure we are taking over the decision making process. Taking over the decision means it’s no longer their decision and we can’t hold them accountable for the end results. People have to be allowed to make their own decision if we want them to experience the consequences — good or bad.
It’s empowering:
When we let people fail, we are empowering them. We are telling them, “We trust you.” People need to know they are trusted for their expertise. People need to feel valued for what they know and for what they do. When we don’t let failure happen, we strip people of a sense of competence. We send the message that says; I don’t trust your judgment and therefore I’m going to do this for you. Do this too many times and your will create stunted robots, as no one will make any decisions. They will just wait for you.
You could be wrong:
Has it ever entered your mind, you could be wrong? What happens if you are wrong? What if your idea wasn’t the right one and failure happens? What if they WERE right? Now what? Just because we think we know the answer, doesn’t mean we are right. We can be wrong too.
It creates diversity, creativity and innovation:
By letting people fail, we are giving permission for people to think for themselves. When an entire organization is allowed to think for themselves it creates a wide swath of ideas and approaches for creating opportunity and to solving problems. If there is one single greatest benefit to letting people fail, this is it. When we don’t let people fail, we stunt creativity. Idea’s are put through the leadership filter and stripped of creativity. When ideas or approaches have to be run by management rather than implemented they lose their ability to be proven out. Letting failure happens means, letting ideas go out without the constricting filter of you. Leadership can’t think of all the good ideas, nor can they determine what the good ideas are. Let people fail, you’ll learn more than by trying to keep them from failing.
It’s why you pay them:
At the end of the day we hire people to do their job. If you don’t trust them to make good decisions, don’t hire them. If you do trust them, then let them fail. They will only fail once. They will learn a lot. They’ll feel as if they have ownership and that they are empowered. The will grow and get better. Letting people fail is an investment.
Let people fail. You’ll have a much more creative environment and a lot more time on your hands to SUPPORT all this new found creativity — and that’s exactly what you should be doing.
Let failure happen. You’ll be happy you did.
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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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Looking to Accelerate Sales? Get Back to the Basics!
Posted by Rick Pranitis in GENERAL DISCUSSION on October 1, 2012
Feeling frustrated about your current sales results? Trying to accelerate sales can be tough, especially when the economy isn’t doing so well, but it’s not impossible. You don’t have to come up with a completely new game plan to accelerate sales. By sticking to these proven basic simple sales strategies you can increase sales:
Sell “Value”: Focusing your sales pitches on short term value helps people justify buying what you are offering, even in an economic climate of decline. Trying to market a product or service that isn’t necessary in a time when people are trying to cut costs is incredibly difficult. A product or service that offers more immediate value, however, is a lot easier to sell. Make sure your value is expressed in the terms that your target audience uses to describe their business issues and business goals.
Become a Resource: Building trust is key to accelerating sales, especially in a down economy. If you can be a source of valuable information and content, your prospects trust in you will increase. Developing trust and relationships with your prospects will greatly increase the likelihood of a sale. Trust can be built through credibility generated from publishing relevant content, being active and helpful using social media, networking and generating referrals, giving impactful referrals, along with many other non-traditional sales activities.
Personalize: Instead of relying on mass email newsletters, mailing campaigns, or newsletters add an element of personalization to your interactions with prospects. A brief phone call from a sales person could be the key to landing a sale. Personalized contact allows prospects to go from seeing you as a faceless organization to seeing your sales team and company as real people.
Follow Through: Sometimes prospects don’t convert to sales the first, second, or third time you reach out to them, and it can be easy to let these prospects disappear from your radar. Lead nurturing emails, a phone call, or any other way of interacting with your prospects keeps you in front of them and increases your chances of moving forward with the sale. Make sure you set up your sales process in your CRM to allow for regular and value added re-connecting touches with your contacts.
Qualify Your Leads: There are a lot of ways to qualify your leads, but the bottom line is that working with qualified leads saves time, and ultimately increases your campaign ROI. Instead of wasting your top salespersons time with cold calling to unqualified leads, find a way to bring them leads with a higher chance of converting to sales.
It’s the basic and consistent blocking and tackling in sales which yields results. If you do nothing else, keep your focus on these five strategies and you’ll have a much better chance of achieving your goals.
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