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Keys to Effective Sales – Go Deeper
I don’t remember where I read this, but I found it very insightful – the only value that exists in a library lies in the books you haven’t read. The point is that books that you’ve already read are no longer valuable because you’ve already learned from them – the real value lies in what you don’t know.
The same is true for sales. If all you all you do is address the “needs” that your customer/prospect already knows, you are not creating any value, and your merely being a commodity player. If you want to separate yourself from your competition, the only way to do that is to address items that:
a) your customer/prospect doesn’t know about or understand, and
b) your competition doesn’t address.
The only way you can do that is to go deeper in your questions and conversations than you ever have. You must master The Five Rules For Creating Demand, and you must develop business acumen.
The failure to do this will leave you smack in the cross-hairs of commoditization.
Losing Your Brand
Your brand is your lifeblood. I’ve written before (as have many others), your brand is not what you say about you – it’s what others say about you. This means that you don’t control your brand, your audience does. Going against your brand in a short-term attempt to “win” is not only a tactic of last resort, it’s something that shouldn’t even be considered.
I’ve worked very hard to avoid any mention or analogy to politics and the presidential race on this blog. The emotional charge of politics makes it difficult for my real message focused on profitable growth to come through. However, David Brooks (New York Times columnist) has written such a good piece on The Education of McCain that I couldn’t avoid it.
Brooks talks about how McCain has been “forced” to fight a more traditional (and negative) campaign than he and his advisors wanted. Brooks quotes McCain’s advisors as saying, “[We] didn’t choose the circumstances of this race. [Our] job is to cope with them.”
While McCain’s advisors are making the traditional, safe choice, I still think it’s the wrong one if McCain wants to win – let alone govern. McCain’s advisors claim that the only way that they can get news attention is to attack Obama. While that is certainly true at this point, it’s also so against type that long-time McCain supporters have wondered what is happening to their candidate. McCain is becoming the very politician he (and his supporters) used to mock.
McCain has succeed by going against the traditional political-type. His premature defeat has been called several times (in 2000, they said he would never be able to run for President again, and in this election cycle, his candidacy was declared DOA in the primary season). McCain has always stuck to his approach and won in the end (even though he “lost” the 2000 election, his influence increased).
Now, he’s going against his brand. Now, he’s playing traditional politics. Now, he’s lost he core difference. I get that playing his non-traditional game was a long shot (legitimately, his entire candidacy was a long shot and few thought he’d get this far) – however, playing this new game (one that I don’t think he’s particularly good at) puts him in a far more precarious position. I’d rather that he stuck to his guns, and tried to pull another one out.
Starbucks Taking a Shortcut Into The Commoditization Trap
Growth is tough. As the saying goes, “the higher you go, the greater the fall.” It’s no secret that Starbucks has been struggling to re-capture it’s momentum and buzz for awhile. I’ve avoided using Starbucks’ challenges for far too many others were highlighting them, and frankly it felt to easy to pick on them. Their most recent promotion, however, has given me no choice.
For those not familiar, here is Starbucks’ offer: If you buy a drink in the morning and you keep your receipt, you can come back after two in the afternoon and get any cold drink for $2. When a premium offering starts discounting – it’s danger. You don’t see the Four Seasons offering “stay 3 nights, get the 4th free.”
Much has been written about how Starbucks has lost in special place with customers. It got so bad that Howard Schultz has to come out of de facto retirement to run the company. Schultz promised to bring the company back to its roots and to its core values. He did some nice things – I like the the changes they’ve been making to the store and the fact that they were willing to retrench (by closing stores) in an effort to solidify the foundation. I even started saying to some people that Starbucks may do what Apple did – lose their uniqueness and get it back. Now I no longer think so.
I understand that Starbucks needs to get sales back, I understand they need growth to sell their turnaround story to Wall Street. However, discounting is almost always a shortcut to tighter margins. Even more so when you claim to be a premium brand.
A better – albeit much more difficult – approach would have been to focus on making the Starbucks experience one worthy of coming back to.
An Agency That Gets It – And An Ad That Doesn’t
I’m in York, PA getting ready to speak with a group of 15 CEOs about how to create demand in difficult market conditions. As I was having dinner and reading USA Today, I came across two examples that are worth sharing. One shows the power of seeing the world today as it is, the other shows traditional advertising at its worst (or is that best).
The first story focused on a “different” type of ad agency. Mordernista is focused in the money section, and the article is worth reading. Here’s my favorite highlight:
Liz Vanzura a marketing person for Cadillac commented, “What makes Modernista different is that they focus on understanding the real business issues.”
Wow! That’s what I call damning an industry. Understanding business issues makes a company different? I don’t doubt that it’s true, I’ve been saying for years that ad agencies were depleted of virtually all value creation, but still, I’d like to think that most of them would at least understand the “real business issues.”
What I like about Modernista is that they seem to practice the first critical principle of growth – Focus on what the business needs to become, not what the business is. Another interesting point in the article is that Modernista currently gets 25% of it’s revenue from “non-traditional agency revenues” and they expect that to go above 50%. Another sign that the agency business model is flawed, and that smart people are focusing on monetizing activities that create value, rather than using those activities to subsidize other non-value creative activities.
Later in the paper, I saw an ad for DePuy Orthopedics – a company that provides replacement hips. It featured Mike Krzyzewski, basketball coach for the 2008 USA Men’s Olympic basketball team and Duke. Krzyzewski has had two hips replaced and he says:
“In fact these hips feel so good, I sometimes forget they’re not really mine. My only regret is that I didn’t do it sooner. My advice? Don’t wait for the pain of severe hip or knee arthritis to take you out of the game. Ask your doctor about DePuy today.”
Do you get that – go out and get your hips replaced today – why wait. Oh yeah, here’s the kicker:
Important Safety Information: Joint replacement is not for everyone. There are potential risks…
Potential risk? I’d say so. How about we drop the silly manipulation, provide valuable information about how to prevent future replacements, then if I ever need one (as a last resort), maybe I’ll actually trust the company. I realize that celebrity advertising helped Pepsi sell a few more sodas, it’s depressing to see where it’s gone.
The 5 Critical Principles to an Effective Marketing/Growth Strategy
Let’s face it – most marketing efforts implemented by companies fail to provide any material results. Far more corporate growth can be attributed to favorable condition in the economy than can be attributed to any direct efforts from a company.
Traditional marketing (and the plans that support it) is dead. All one need do is look at the economic results delivered by companies that practice traditional marketing to realize that marketing attempts are not driving improved results (take a look at the stock market, gross & net margins, wage stagnation, true growth rates, etc.).
The reality of this hit me as I was reviewing the marketing plan that a prospect had just completed. They had engaged a marketing firm to help them, and they asked us to review it and determine how we could help them execute it. In my review, I was quite disappointed with what was done – it was a plan that would thrust my prospect further into the commoditization trap.
So I asked Mike Pawlak, my Client Experience Director, “Why do most marketing firms fail to create compelling plans? Are we missing something, or do they just not get it?” As Mike and I discussed this, we realized that we focus on five critical principles when developing a marketing strategy. I must review hundreds of marketing strategies a year, and my experience proves that the vast majority (I’d say 90%+) of marketing efforts to not follow these principles. Here they are:
The 5 Critical Principles to an Effective Marketing/Growth Strategy™:
- Focus on what the business needs to become, not what the business is.
Most marketing firms look at a business as what it is – who are their customers, what does the business do, why do people like them – as opposed to what it needs to become. This results in a static, “me-too” message, where the company is forced to “explain” themselves. - Do not use “mass-marketing approaches” if you are not a mass-market business.
Most small and mid-sized businesses use traditional, industrial-age based mass-marketing strategies and tactics. It’s a pretty good idea that you are doing this if your marketing plans call for the creation of “top-of-mind-awareness” in your market. Top-of-mind-awareness costs millions to billions of dollars (just ask McDonalds, Wal-Mart or GE). What you want is the right awareness at the right time. Use “micro-marketing” strategies and tactics, unless of course you’re a $3 billion, consumer products company – uh, wait, just look at Proctor and Gamble and take a look at how their marketing is becoming more 1:1, rather than top-of-mind. - Make sure your marketing plan is tied in directly and fully integrated with your sales execution plan
Too often, marketing and positioning plans are created in a vacuum from the underlying sales process. Remember, the entire purpose of all of your go-to-market efforts is to INCREASE SALES WHILE REDUCING COST OF SALES AS A PERCENTAGE. Traditional marketing is compressing margins, so if you want to expand them – don’t use traditional marketing plans. - Make sure your plan is an “Outside-In” plan, rather than “Inside-Out”.
When it comes to your “go-to-market” actions, there is only one opinion that matters: YOUR CURRENT AND POTENTIAL BUYERS. If someone can’t write you a check, then their opinion is not relevant in marketing efforts. I must look at a hundred or more marketing plans that have been created by companies every year. 98% of them look at the world from the company’s eyes, rather than from the customer’s. Don’t make this mistake. - Make sure your plan is designed to create demand rather than to fulfill it.
“If I had asked what people wanted, I would have created faster horses.” – Henry Ford
The vast majority of marketing messages out there require the potential buyer to already know what they need, putting the marketer into a commodity selling position. Your job is to create demand, to enable people to come to realize they have a need they didn’t know or understand – when you do that, margins expand and sales cycles get faster.
Following these five principle will force you to view the world from you customers’ eyes and further, it will force you to find new ways to solve your customers’ new and old problems. While difficult, excelling will make you a “Best-In-Class” company. The failure to excel will make you a “me-too” company and the ills of commoditization will continue to erode your efforts.
If you’d like help in making this transition – let us know.
Now “Tweeting” on Twitter
Well, when I first heard about it, I thought it was silly. Who in the world (that is actually working) would use Twitter. I’m now one of them. I’m actually finding it quite valuable. Why:
Because Twitter is a proxy for the market. I talk often about keeping things simple, now I have a great proxy for it. If you can’t fit your message into Twitter (140 charecters), it’s probably two complicated.
If you’d like to follow my “Tweets” just click here.
Why Salespeople Fail
I remember the childhood joke that the only thing worse than finding a worm in your apple is finding half a worm. I thought of this joke when working with a prospect recently and we agreed that the only thing worse than not having a sales force is having one that is not effective.
I do not believe that most businesses can grow effectively without building a high-performing sales team. Therefore, the only option today is to build one that is high performing. An average, or even above average, sales team will not be able to overcome the challenges of commoditization, and will actually contribute to the underlying causes of commoditization.
And the fact is that sales teams today are less effective than ever!
Why?
Well, we’ve been studying this issue for the last 18 months, and I have to admit that I was perplexed in determining the underlying cause(s). I can report to you now, that while we may have not yet completely solved the riddle, we’ve identified the key cause for the struggle. Simply put, salespeople (as a whole, and in great numbers) lack business acumen.
At Imagine Business Development, we define business acumen as:
The ability to intuitively grasp the performance drivers for someone else’s business – and then clearly explain how your product or service will drive THEIR results. It’s an “ROI on the fly” conversation that’s an equal mixture of business understanding, asking the right questions and pouncing on opportunity when it presents itself.
Sales professionals that possess business acumen will have the greater advantage positioning their offerings for greater success (measured by faster sales cycle and pipeline cycle times and greater margins) than their competitors while operating in the same external landscape as their competitors.
Salespeople who fail to develop business acumen will be forced to battle in tighter commoditized spaces, looking to eek out decreasing margins against higher expenses – not the future I’d like to live in.
This means that salespeople must – I repeat, must – become more adept at understanding business – and the key drivers of business success. In a previous post, I highlighted the insight that it is no longer enough to be the best at something, you must know your customer’s business model and your customer’s customer’s business model to succeed. You cannot do this if you do not have adequate business acumen. And if you can’t understand the business model, you can’t understand the results your offering is supposed to provide.
Stay tuned to this blog for more about business acumen for salespeople and what we at Imagine are going to be doing to support your efforts in developing or increasing it. Your feedback and insights are welcome.
A Valuable Thought
Information is no longer an advantage; nor is access to it. Now, it’s the ability and speed to transform information into meaningful action.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
