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Selling Value: A Key to Profitable Growth

March 3rd, 2011 by Jeffrey Baker

Are your highest-performing salespeople and sales leaders putting your business at risk?   If you only monitor and reward top-line revenue production, your salespeople may hit their quotas but quietly drain your profits every time they offer a discount to “close the deal.” How many times have you heard one of your salespeople say, “I just need an X percent discount to close this deal”? Or this classic: “Don’t worry about this discount, because we’ll make it up on volume”?

Do you know that a 1 percent drop in selling price translates to an 8 percent drop in operating profit? And do you understand that, to make up the lost profit owing to the 1 percent discount, you need to sell 28 percent more volume at the lower price?   This is the well researched message of the McKinsey book, The Price Advantage, by Walter Baker, Michael Marn, and Craig Zawada. Read the rest of this entry »

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How to Use Social Media for Sales When You Can’t Use Social Media

February 11th, 2011 by Steve Barry

The pressure’s building. All you hear is social media this, and social media that. It is supposedly going to transform the way you sell. So, you click on LinkedIn. Blocked. Twitter? Blocked. Facebook? Yeah, right. What now?

If you work in financial services, pharma, or medical devices, this scenario sounds familiar. At a client roundtable discussion this week, we asked people to conjure up one word that came to mind when thinking of social media. One financial services client’s word was “Legal.” Her second word: “Compliance.” So, how do you use social media to improve sales effectiveness when legal and compliance won’t let you?

To learn how, it’s helpful to first set the context.  Salespeople who use social media generally operate out of two externally facing playbooks: Offense and Defense.  Here are some of the plays. Read the rest of this entry »

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Sales Trends of 2011: The Trends Within the Trends

February 3rd, 2011 by Steve Barry

After our 7 Trends in Selling for 2011 post, I wondered what other gurus were seeing for the year ahead.  Quite a few experts identified challenges and trends facing sales organizations in 2011.  Here are a few excellent posts:

After reading these articles (and many more), three “trends within the trends” began to emerge : Read the rest of this entry »

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Cold Calling is Stone Cold Dead

January 24th, 2011 by Jeffrey Baker

Cold calling is a fool’s errand.  Think about it:  Would you take a call from someone you’ve never heard of—or someone who hasn’t been referred by a person you trust?  Me neither.  So, how do professional salespeople generate new prospects and nurture leads?  First, they generate a continuous flow of “warm leads” from their existing contact base.  Second, they actively increase their visibility as go-to-people in the markets they serve through networking, speaking engagements, and writing.

Have you ever seen any really excellent networkers?  They carefully and genuinely build trust and deepen connections over time with contacts they make.  This earns them the right to gain referrals to viable leads from their new business “friends.”  Contrast this with the way novice salespeople network:  treating new contacts like prospects and trying to qualify or even close them when they first meet.

So, how does social media change effective selling?

In some ways, nothing changes.  Social media simply enables the pros to do what they have always done well:  build necessary trust and credibility in advance, in order to make their prospecting calls warm calls.

In other ways, everything changes.  For starters, everyone can see your online networking activities.  Every status update, question answered, blog posted, or event created becomes content linked to the salesperson’s brand, with a very long shelf life.  Professionals’ knowledge is highlighted and spread; novices’ absence is more conspicuous, and their actions, or lack thereof, amplified.  Salespeople who skillfully participate in the new social milieu stand to gain a multifold advantage over their competition.

To learn more about how to leverage the disruptive changes brought about by new social media, see our point-of-view paper, “Cold Calling Is Stone-Cold Dead.”   Let me know how you are using social media to improve your sales results.

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Seven Trends in Selling for 2011

December 16th, 2010 by David Robertson

In my conversations with heads of sales around the globe, I’ve identified seven trends that will impact how we need to sell over the next 3 to 5 years:

1. The selling context has changed

Markets are more competitive; customer needs are more complex.  At a minimum, salespeople must recognise this and demonstrate their understanding of what the new context means for their customers’ business.

2. Who you sell to is changing

Strategic procurement processes have led to more “gatekeepers” and an extended buying cycle.  Salespeople are expected to build effective relationships across the buying centre and demonstrate a broad-range added value over time.

3. Value is defined by the customer

There is a greater expectation that salespeople understand value as defined by the customer (rational, emotional, and distinctive) and use the language of value in their business discussions.

4. How customers buy is changing

Many large customer companies are selecting fewer global suppliers who can partner with them to address their enterprise-wide needs.

5. Pull, don’t push

Customers are driving a shift from “pushing” (the traditional reactive sales approach) to “pulling” (proactively identifying business partners).  Sales organizations must fully utilize the power of Web 2.0 to get customers’ attention, demonstrating experience, resources, and capabilities in order to partner with them at the business level.

6. The level of conversation has moved up

The dialogue is a real business-to-business conversation, and not just a consult on specific needs.  It builds over time.  Salespeople need to develop skills to work at the business interface (that is, business acumen), addressing customers’ technical needs as well as their strategic business needs, discussing risk, and connecting with the rhythms and cycles of customers’ business.

7. Consultative skills are still important and …

More and more, solution sellers are selling higher in the organization by building customer intimacy with senior executives.  They build it in three stages of sales and delivery:

  • Lead with ideas. Begin discussions with customer-executive prospects about ideas or opportunities you believe are of high value to them.
  • Jointly explore the ideas or opportunities with the customer buying decision maker and key stakeholders.
  • Become a trusted advisor by ensuring realization of value for the customer.

This business partnership approach to managing the relationship between the two businesses ultimately provides more value for your customer and more opportunities for you.  But it usually requires a greater investment in the development of the salesperson.

What themes do you see emerging as the next steps for your salespeople?



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Sales Leaders: Are Your Teams Prepared to Sell in 2011?

November 22nd, 2010 by Ed Boswell

Only 15 to 20 percent of salespeople have the skills to successfully sell in the post-recession marketplace.

Think about that for a second. Think about your own sales team. Does roughly one member out of five outperform the others and stand out in terms of how he or she sells? Does that person challenge assumptions and provide more prescriptive solutions based on prospects’ specific needs? Does he or she think about the territory like a portfolio? If so, you would have fit right in at a recent meeting of leading sales executives in New York City.

This group of executives comes together on a regular basis to exchange ideas, insights, and best practices. When we met last month, the topic of sales talent dominated the discussion.

In the course of the 2-day meeting, the group realized two things. First, there was broad agreement that only 15 to 20 percent of sales professionals are ready to sell in today’s increasingly challenging environment. Second, the group realized that the Sales Executive Council’s “Challenger model” describes the behaviors of the successful 15 to 20 percent. In its most recent research effort, the SEC found that the most successful salespeople share a set of attitudes, skills/behaviors, and activities, and also share knowledge. Essentially, Challenger sales reps do three things well:

• They Teach: Provide valuable real-time insight about how to compete in their market.
• They Tailor: Deliver tailored messages that resonate with customers’ specific priorities.
• They Assert Control: Not aggressive or abusive; this control involves standing one’s ground in the sales conversation and negotiation.

But the obvious question before the group was, “What are we doing with the other 80 to 85 percent who aren’t up to the task?” Clearly, these people can’t just be dumped. The capabilities that salespeople need going into the next decade are quite learnable.

Indeed, the financial crisis hit the “reset button” for sales organizations. Many are going back to the fundamentals of business acumen, strategic account management, and the like. Some salespeople will only need a brush-up; others will need more structured learning and coaching. What are you going to do for your 80 percent?

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Forum’s Leadership Challenges Index: What Are Your Rankings?

September 14th, 2010 by Steve Barry

In this inaugural version of Forum’s Leadership Challenges Index, we look for trends in the ways organizations are aligning and mobilizing their people to attain business results.

To see the trends, we tagged each of our requests for work from clients or prospective clients in the first half of 2010 as relating to one of eight business issues.  We then ranked the issues in order of frequency of requests (1 = most frequent, 8 = least frequent).  In addition, we ranked the number of clicks on each of the eight business issues on forum.com (1 = most clicks, 8 = fewest clicks) for the same period.  Interestingly, the clicks and requests rankings were nearly identical—which indicates some themes in organizational approach and interest.

Results:

Business Issue Client Requests (Rank) Web Site Traffic (Rank) Composite Rank
Restart growth by increasing leader bench strength 1 2 1.5
Reduce time to value and increase value over time by accelerating execution 5 1 3
Gain a competitive edge with an aligned, differentiated global sales model 4 3 3.5
Grow revenue and profits by creating a loyalty-building customer experience 3 4 3.5
Deliver on a key strategy by aligning organizational culture 2 5 3.5
Drive profits in commoditized markets by selling value over price 6 6 6
Grow your business by developing and retaining strategic accounts 7 7 7
Uncover opportunities and gain efficiencies by creating a one-firm firm 8 8 8

This is not a scientific study, and our marketing activities likely swayed some of the outcomes.  (At least, I hope they did!)  Specifically, with the release of our book Strategic Speed, it stands to reason that the accelerating execution challenge would top the site traffic chart.  However, the other challenges received roughly equal love and attention from marketing and show remarkable symmetry.  The Index provides a high-level snapshot of challenges facing leaders.

Three headlines jump out for me:

1. Leadership development, which waned as a concern in 2008-09, has returned.  Big time. In fact, there were three times the number of client requests relating to this business issue as there were requests relating to the issue of the next greatest concern.  Opportunity costs have grown too high to ignore today.  Several of our clients are focusing on the Strategic Speed model of clarity, unity, and agility as a development chassis to help their leaders handle personal and organizational transitions, accelerate execution, and capture market opportunities.

2. Sales gets aligned. Value-based selling and strategic account development can be successful aspects of a sales strategy.  Yet, their importance pales in relation to the importance of creating a clear, compelling sales and marketing strategy.  Sales leaders who create such a strategy are able to translate it into sales-force deployment decisions and align interrelated components of execution.  The result is a sales force that is equipped to consistently find, win, and keep customers.

3. Outside-in trumps inside-out. Prospective and existing customers favor a superior experience over a focus on organizational efficiencies or cultural alignment.  Although there is often a strong collaborative culture at the core of a superior customer experience, this could signal a tipping point.   Organizations have stripped many costs out of their business—perhaps few efficiency plays remain?

How would you rank these issues?  Which are most important to making your 2011 a success?

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Personality Matters: Why people buy from you

July 29th, 2010 by Jeffrey Baker

Did you know that the likelihood of a sale decreases when a customer meets a sales rep for the first time?

It’s true. After the first meeting with a sales person, the likelihood of the customer buying from the supplier is lower than it was when the customer made initial contact with the supplier’s web site, advertising, blog, or other media (see Forum research report, Navigating the Sales Funnel: Understanding How Customers Buy). Somehow salespeople are failing to meet important buyer expectations in their very first encounter. This gap lengthens sales cycles, reduces lead conversion rates, and provides an opening for competitors to enter.

So, did the salespeople in our research sample forget to wear deodorant? What does this statistic mean—and why should you care?
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Sales Negotiation: How do you Do?

May 27th, 2010 by Steve Barry

Sales negotiation is a perennial weakness for many sales organizations. A primary reason for this weakness is that many salespeople, by nature and/or necessity, are action oriented. You know, the “just give me my goals and get out of my way” type. They crave instant action, particularly when action equals gratification.

Yet, to paraphrase Louis Pasteur, “Opportunity favors the prepared mind.” To be effective negotiators, salespeople need to invest significant time in preparation.

It’s just like remodeling a kitchen: the prep work takes the most time. It’s painfully tedious. It can feel like you’re not making progress. But, if you skip steps, it can cost time, aggravation, and money in the long run.

It’s not that salespeople don’t conceptually understand this. They do. The most successful sales managers close this “knowing / doing gap” by broadening the definition of what “doing” means in salespeople’s own minds. They redefine progress. For example, if you asked salespeople to define negotiation, most would say that it’s the act of negotiating the price, terms, and conditions of sales with current and new customers—and winning! But what if the definition of negotiation also included the actions of pre-defining their opening strategy and concession strategy?

Well, what happens is that challenging issues (for example, price and the role of purchasing) are deliberately woven into initial conversations. This sort of “negotiation selling” requires customer insight, preparation, and a degree of flexible choreography or “process negotiation”—thinking about how, where, and when to introduce possible points of negotiation into the conversation. The stress of intense end-stage negotiations (in which the customer has the leverage) is greatly reduced, and successful negotiations result.

How about you? When negotiating, how do you “do”?

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Do You Love Your Haters?

March 16th, 2010 by Jeffrey Baker

“Haters.”  A head of sales for a Fortune 100 business unit recently used this term to characterize a group of people contributing to the unit’s profitability problems.  What do you think he meant by “haters?”

  • Industry regulators
  • Leaders in another division of the company
  • Customers
  • A rival New York City-based rap duo

If LL Cool J happens to read our blog, he’ll be disappointed to hear that the rap duo is not the right answer.  Instead, it’s customers.  Haters are customers who have budget and need products or services, but who are so difficult to deal with that they suck up time and resources and ultimately hurt profitability.

Of course, this head of sales was focusing on the haters simply to prove a point:  his business unit’s strategy was unclear, and its execution was poor as a result.  To improve, the unit completely re-segmented its customers, shifting from a purchase-volume to a buying-behavior criterion.  The new segmentation strategy provided a crucial framework for qualifying buyers and opportunities.  At this writing, it is already showing positive returns for the business, as salespeople are now better utilizing their precious time and company resources.

While some of your own customers may have come to mind for you when you read the definition of haters, your customer knowledge may not be as complete as you think.  If you validated your segmentation strategy more than 12 months ago, it is likely out of date by now.  As I noted in earlier research, every recession shuffles the deck, setting up new pecking orders in many industries.  Combine this with today’s continued economic uncertainty, and you can be sure many of your customers have changed why and how they buy.

Knowing your haters is only half the battle.  The other half is dealing with your salespeople still loving the haters.  Salespeople’s customary disciplined, consultative selling approach to selling is now giving way to a much less effective approach:  pitching products to anything that moves.  This is natural and understandable, given that most salespeople are coming off their worst earnings year ever now.  Natural, yes.  Effective, no.  Winning sales organizations today understand how the buying behaviors in each of their customer segments have changed, and align their sales strategies and salespeople with the new realities.

How about you?  Are your salespeople aligned and equipped to execute your segmentation strategy, or are they operating independently, shooting at whatever moves—including the haters?

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