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The Single Most Important Driver of Profitable Sales
In my fourth post on this blog (back in September of 2005), I made the point that the ability to get customers/prospects to be willing to pay for a sales call was the biggest sales advantage you could create. Over the last six months, I’ve come to the realization that it’s no longer merely an advantage – it’s absolutely critical to your ability to consistently make profitable sales.
To put it as simply as I can, if you are not creating real value in the sales process, you’re falling waist deep into The Commoditization Trap.
At the risk of over-simplifying corporate structure, I’ve learned executives have one of two focuses. At the senior level, they’re focused on the problems facing the company, while mid- and lower-levels are focused on managing solutions.
- Problems are strategic and solutions are tactical.
- A problem focus is all about finding the right/best questions to unlock opportunities, while a solution focus is all about finding the most efficient answers.
- Problems deal with changing the status quo, while solutions are about managing it.
The problem that sellers face is that the traditional sales approach is not geared to connecting to the problem-centers of the customer/prospect organization. I see it time after time. Selling organizations are so solutions focused that they forget that they’re really in the business of solving problems.
With this focus they fall into the vicious cycle of solution selling, where they need to increase their volume at increasing rates to make up for tighter margins and lower win rates. And simply restyling your website, or creating a new tag line isn’t enough to break through and gain the attention of the right people.
If you want to be valued, you must first change how your customers/prospects think about the solution you provide. You must provoke them, and break them out of their traditional, status quo thinking. And you can’t do that when your focus is on your product or service.
To succeed, you must create value. You must teach them something that matters. You must be able to show them first why they’re failing to get their desired results as easily as they’d like, and further you must be able to show them how they can reach their objectives more effortlessly. You must ask them questions where they learn about their company and see their challenges from a different perspective.
Here are three tips to jump-start your efforts:
- Create a list of questions that will cause your customer/prospect to look at their situation from a new or different perspective.
- Share a 15 – 30 minute presentation providing a unique angle to solving a perplexing problem. (Please note, this presentation cannot be about you – it must be customer focused and valuable to them.)
- Develop tools that allow customers to assess themselves.
When you do that, you’re doing something worth paying for. And if you fail to do that, you’re going to be treated like the commodity provider they think you are.
The 3 Questions to Break Free From Your Competition
I’ve written about the curse of knowledge before. An important sales implication of the curse is that selling organizations become increasingly committed to the belief that it’s the expertise and knowledge about the solution that separate competitors in buyers’ eyes.
There are two important points that contradict that belief:
Your customers are nowhere near as educated as we’d like to believe they are about their problems, so it’s virtually impossible that they’ll be able to:
- Truly understand your expertise and solutions, and
- Effectively compare the difference – and the value of that difference – between you and your competitors.
- When you’re focused on your expertise or solution you must overcome 2 huge barriers:
- You’re in a what’s it cost conversation, and
- Your competitors have expertise and solutions as well, and they’re probably pretty good too.
As a small, mid-market business, if your goal is to separate yourself from your competition, drive accelerated growth and expand your margins, you cannot do so by focusing on or attempting to differentiate your solutions.
You must – MUST – contribute to defining the problem.
Ask yourself these 3 questions to determine if your sales efforts are setting you apart and making growth effortless:
- How much time do I, or my salespeople, spend talking about our solution vs. digging deeper into the real problem facing my customer?
- In my sales calls with my prospects and customers, how much do they learn about their problem vs. learn about my solution? As a general rule, you want them to learn 3x more about what’s preventing them from achieving their desired objectives than about how your solution will help.
- How much documentation do we use to highlight and quantify the cause and cost of the problem? (Feel free to check out our Core Sales Toolkit if you’re looking for some tools.)
Having witnessed thousands of sales calls, and advised thousands of more, I can state – unequivocally – that the single biggest, most common and most damaging mistake is that selling organizations spend too little time defining the problem, and jump to the solution way too fast.
Gaining The Focus You Need to Expand Your Customer Base
Over the last 18 months I’ve been focusing on simplifying the approach that small and mid-market companies take to growth. There is probably nowhere where this is needed more than in strategic planning process.
Working with thousands of companies, I’ve come to understand that the focus of your go-to-market strategy can be broken into three categories. They are:
- Those who will do business with you.
- Those who won’t do business with you.
- Those who should and aren’t doing business with you.
Those Who Will
The reality is that you do not need to spend significant time creating strategy for this group. This is the customer base that you already have a strong grasp on, and as long as you don’t blow it, they’ll continue to buy from you.
Those Who Won’t
You shouldn’t expend any strategic energy figuring out this market. While this may sound obvious, I’m constantly surprised how much strategic time is spent trying to get people who are never going to buy from you, to do so. At best, energy put in this area will get you into an RFP process, that if you execute flawlessly will allow you to finish second.
Those Who Should
This is the segment of the market that deserves 90%+ of your strategic energy and effort. To do so effectively, however, requires an approach that’s different than most companies take.
Here are some pointers to expand your customer base:
- You cannot figure out how to get the people who should buy from you to do so by looking at the people who are buying form you. If you could, this group would already be buying from you.
- Attracting those that should buy from you requires that you first change how they view and value the issues you impact.
- You do this by creating your Commercial Teaching Point-of-View.
- Expanding this market requires that you focus on building customers – not making sales.
Give Me More Sore Losers
I hate to lose. And I like people who hate to lose. I hate losing more than I enjoy winning (and I enjoy winning). I’ve learned that one key commonality of great athletes, sales professionals and businesspeople is that they HATE to lose.
I bring this up with the recent behavior of Bill Belichick, who refused to grant a 45 second interview to a CBS reporter, following the Patriots loss to the Ravens in the AFC Championship. Belichick’s behavior has been universally panned. He’s been called a sore loser, arrogant and worse. And while I certainly don’t condone his behavior, I admit I empathize with it.
I was struck by the USA Today column on the subject (link above):
No coach who’s experienced as much success as Belichick is a good loser. Their determination and competitiveness is what fuels their greatness. But what of all those coaches who seem like good losers after big defeats? They’re just better at faking it.
Bill Belichick is an ornery, often arrogant personality. He’s also an innovator with an undisputable record of success. And (while this probably won’t win me any fans) I must admit that I respect his actions just a little bit.
When a salesperson loses a sale they believed they should have had, I want to see them angry and upset. I certainly don’t want to see them laughing and asking when happy hour starts.
When a business fails to achieve its goals for the quarter, I want a CEO who is pissed; not one who’s hanging out and treating it as business as usual.
While it’s not a popular sentiment, it is this very non-social, unbalanced reaction to losing that pushes one to work a little smarter, try a little harder and to find new ways to break through.
So, yeah, Bill Belichick is a sore loser, but he’d also be one helluva salesperson.
The Problem With Goals
I’m a big fan of quotes, and I’ve got a love/hate relationship with goals. So the two collided when I came across this quote from David Ogilvy: “Don’t bunt. Aim out of the ballpark.”
My feelings with the quote hit “Perfect Storm” status when you add that I’m a hitting coach in college baseball. One that firmly believes that every one of my players needs to be able to implement the bunt flawlessly. In baseball, bunting is called small ball, and it can be quite powerful.
All you need to do is look at the San Francisco Giants who have won two of the last three World Series with solid fundamentals and small ball, beating two teams that relied on the ability to “hit it out of the park” in the Texas Rangers and Detroit Tigers.
I have no problem whatsoever, and often encourage, that entrepreneurs, executives and salespeople should set stretch goals. I even go so far as to say that stretch goals should scare you.
However, I’ve also learned that stretch goals can be as big a contributor to the problem as they are to the solution. “Aiming out of the ballpark,” may push you, but it also encourages you to try to skip steps. Why hit singles and doubles when I can just go for the home run?
If I’ve learned one important lesson about success, is that it’s boring. Sustained success is about getting the fundamentals right, doing the little things, and consistently moving things forward – bunting, if you will.
So, if I may be so bold as to alter the famous David Ogilvy’s quote:
Aim out of the ballpark…and bunt.
So, What Are You Going To Do With 2013?
Welcome to 2013! Now, what are you going to do with it? As the famous quote says, time is the great equalizer.
The new year is a great time to contemplate what’s ahead, but it’s also a trap. With everything fresh a euphoric feeling of the possible sets in. But, the reality is that the actions you take, and how you take those actions will have far more impact in determining where you are at the beginning of 2014, than any vision, plan or goal.
And, the reality is that you don’t have that much time to do it. When you factor in time off, the administrative issues you must deal, and general tasks you need address to keep things moving, half of your year is already gone.
So, I ask you again…what are you going to do with it? How disciplined will you be to ensure that you bring purpose, discipline and focus to the actions you take?
While time is the great equalizer, choice is the great differentiator. Strive to make better choices this year, and the results will take care of themselves.
Looking to get a jumpstart?
- You can watch our webinar: The 5 Secrets To Getting Your Year Off To A Fast Start.
- You can download our workbook: Developing a quick, easy and effective strategic plan.
Happy Thanksgiving To All
It’s that time of year again – my annual tribute to promotions and the holidays (with a dash of humor). Have a great Thanksgiving and make sure you take some time to consider all of the great opportunities we have.
Here’s my tribute to Thanksgiving:
I love this time of year. We’ve got the 3-F’s: friends, family & football. There’s the wine, the turkey, the stuffing, the wine. It’s great fun.
And I have a tradition at this time of year that I would like to share with you. I often write about how the old paradigms of business, sales and marketing are letting businesses down. Well, today, I’m not going to get that deep. Today, I’d like to focus on one of the all-time promotion fiascoes, from one of my favorite shows.
The tradition: Watching The Turkey Drop from WKRP in Cincinnati. Have a great holiday everyone.
RSS Readers that don’t see a video below, click here to watch the video.
Are Apple’s Days Ending?
There’s an interesting article in USA Today about Apple’s future. The author, Michael Wolff, cites several reasons for asserting that Apple is on the downside of maturity. I figured it’s been a while since I’ve posted insights on Apple, and there’s a lesson for small and mid-market companies, so I’d do a little prognostication.
Wolfe cites four main points for his conclusion:
- Its phone market, tablet market and content-selling business — iTunes — until recently practical monopolies, have become, as if overnight, hugely competitive fields. Management, in this strictly top-down company, is suddenly in dramatic flux. And, with its great map app debacle, Apple’s customers are starting to rise up against its famous closed-system policies.
- And yet, befitting a company whose real genius is design (i.e. illusion), there is something ephemeral about its position. It has not so much created monopolies — the secret of generational success — as opened new markets for everyone. These markets — smartphones, tablets, digital content distribution — have become the dominant ones in the technology business. There’s no place else for a big player to go. And in the case of phones and tablets, all you have, in the end, are fairly basic machines. It’s a game of price and features and shrinking margin.
- The smartphone market — until recently split between an ever-growing iPhone dominance, a stalwart BlackBerry and a divided Android field — is now, increasingly, an iPhone vs. Samsung world. The difference between one dominant player and a collection of would-be players and two clear alternatives is a vast one. Samsung’s consumer electronics marketing clout — and its breathtaking advertising budget — is even large enough to go toe-to-toe with Apple’s brand mythology and ubiquity.
- And now a backlash against the products. It is an extraordinary part of the Apple marketing dynamic that a great number of consumers buy Apple while resenting it, too. Apple is a peer-pressure buy, often at the expense of functionality and, even, common sense. The underlying fury at Apple’s authoritarian product control and disregard of its consumers finally broke into the open with its decision to abandon Google Maps.
My take:
- I find it fascinating the Wolff equates design to “illusion.” That observation alone clearly demonstrates that Wolff (the author of several books on technology) is looking at Apple through the lens of a technologist, and not through the lens of Apple’s customer.
- Wolff is looking at the market from the standpoint of volume – not profit. In other portions of the article he refers to Apple’s degrading market share. While Apple is losing “market share”, its share of the profits continues to increase. While that is certainly no guarantee of success in the future, it’s the focus on volume over profits that gets most technology companies in trouble (a la Dell, IBM, HP to name just a few). So yes, Samsung is picking up lots of share (and spending ungodly amounts on advertising – some of which is quite entertaining) it’s not denting Apple’s profit.
- Wolff’s final point is partially legitimate. While Apple is maniacal in focusing and understanding its core customer, it’s not good at listening. It’s confident, even arrogant, in its actions, and that is always a risk. While Apple did screw up Maps, it’s not the first time its done so, and botched the follow up (antennae-gate anyone?). To date, Apple has always quickly recovered by staying focused on its core.
And, that is the lesson for all business leaders. While I cannot predict Apple’s future, I can say this:
- Apple has succeeded because it’s maniacally clear on who their customer really is. Simply put, Apple knows who they want to be a hero to, and who they don’t worry much about.
- Apple has always focused on their why, not their what.
- Since Jobs returned Apple has been extremely focused on what it does best.
If Apple stays true to those three points, my bet is with them (and every business that follows these rules). If they violate them, then yes, Apple’s days of dominance are numbered, but not because someone else is building better products.
Thoughts on Fear
Last week I was speaking before a CEO group. The leader of the group started the meeting off with a conversation about fear. It was quite interesting to hear 12 successful business leaders talk about their relationship with fear.
As I listened I found myself thinking about how fear impacts an individual’s ability to do what they know they must do. I realized that we all deal with fear in general, and a fear of commitment specifically.
What is it that holds us back from fully and totally committing? I see this challenge every day as we work with companies and their sales team to implement new approaches and develop new skills. Even when people know that what they’re doing isn’t working, or when a new idea, approach or goal promises precisely what we believe we want, it’s a struggle, fraught with fear, to fully commit.
The best analogy of this commitment fear is the trapeze. To do your jump, you must first let go of the bar you have (safety) and believe that the next bar will be where it’s supposed to be, when’s it’s supposed to be there (and that you’ll arrive at the designated point as well). The moment you let go of the bar you have, there is no turning back – even if you change your mind.
I think that’s what we all deal with. What if we commit fully, only to find out the new idea isn’t any better? Or, what if I’m not able to deliver my end of the bargain, will I be worse off than I started?
How can we get comfortable with fear? A few years ago, I wrote a post,Play in the Fear, that gives the best approach. We need to learn to play again. Take small risks, do things a little differently. Try things quickly. Get a little uncomfortable, every day. We need to stop deal with fear as an event, and instead make dealing with fears a part of our status quo.
I’d love to know what you do to deal with, and manage, the fears you and your team face. Leave a comment or send me an email.
Creating B2B Lead Generation Campaigns That Work
Unequivocally, it is time to focus on growing revenue. To do that, businesses must transform their lead generation efforts into predictable, sustainable and leveragable pieces of their go-to-market strategies. Think about this:
- What impact would a steady stream of high quality leads do for your sales efforts?
- How much time, money and energy have you expended in an effort to develop such leads?
If you’re like most small and mid-size (SME) B2B companies your answer to both questions is: ”A lot!” The question is, why are high probability leads so difficult to get?
Over the last three years, we have been studying, breaking down and rebuilding the entire process of lead generation for SME B2B companies. We’ve tested the concepts on ourselves first, then confirmed our findings with some of our clients. Now we’re ready to share our findings with you.
Join us October 31st at 2pm as we share the answers to this question, and, more importantly, share the secrets that will enable you to develop lead generation campaigns that not only create quality leads, but leverage your sales efforts as well.
We’ll share:
- The 3 myths that cause your lead generation efforts to fail, before you even start.
- The 3 questions you must answer before beginning a campaign or lead generation effort.
- The 5 steps to creating lead generation campaigns that work.
At this webinar, I’llshare our latest research, insights and best practices. What’s more – the webinar is free.
So, join me on October 31st to ensure that you finish 2012 strong and get 2013 off to a fast start.
Should Social Media Be Part of Your Strategy?
I guess it’s time to start talking about social media here. Over the last three months the frequency and consistency that I’m asked about social media has multiplied (I was even interviewed by Strategic Coach on using social media), and I’m regularly seeing growth companies make some crucial mistakes with social media.
The promise and potential of social media is astounding…when it’s done right. Here are some important pointers to determine if you should be taking advantage of social media, and to ensure you do it right.
- Social media is one of the last steps in an effective outreach effort; it is absolutely not one of the first. Social media is a great tool for pointing to and curating content; however, if you don’t have substantial or valuable content social media will not drive any value to you.
- Don’t be selfish. There are two rules to follow to make social media work for you:
- Spend at least 2/3rd of your effort creating value and making your posts/updates/tweets about them, and no more than 1/3rd about you.
- For every piece of content or news about that comes from you or your company, make sure you share/point to at least 3 items that come from others.
- Social media platforms are the antithesis to broadcasting; so, stop all the one-way conversations. To succeed you engage. That’s right, you’ve got to reach out to others and respond to those reaching out to you. The failure to engage will doom the effort. This point is probably the most important. My friend Gini Dietrich follows this rule better than anyone I know, and she’s built an absolutely amazing following and community through social media. While she’s a genius, it wasn’t her genius that built the community, it was her discipline to this rule.
- Social media is a long game tactic, not a short game. You must have effective metrics in place identifying and supporting what causes sales to ensure that your efforts pay off.
If you’d like to learn how to integrate social media into developing effective lead generation campaigns, make sure you register for our next free webinar Developing B2B Lead Generation Campaigns…That Work.
Scarcity vs. Abundance
I had the pleasure of spending an evening this week with two of my favorite entrepreneurial advocates – Dan Sullivan and EO. Dan was sharing his thoughts on creating a 10x mindset, and he made two points that I think are critical for all of us. A Front Row Seat to Creative Destruction We live in crazy times today. Let’s face it, things are messy. Messiness never creates comfort, and in today’s 24-hour news cycle that discomfort is multiplied. But the reality is that, that’s what progress is all about. As new innovations kill old standards. It’s never pretty, and the amazing rate of progress we are all able to take advantage of, also means there’s an amazing rate of destruction. As Dan shared, we’re at a crossover from a world ruled by the laws of industrial production to one ruled by the laws of the microchip. Think about this. Dan pointed out that the very iPhone sitting in my pocket would have been valued at $1.7 billion in 1972. I can only imagine what the iPad I’m writing this post on would have been valued at. Scarcity vs. Abundance The real battle we’re witnessing is a battle between the philosophy of scarcity and the philosophy of abundance. While entrepreneurs tend to naturally have an abundance outlook, we must remember that many institutions and industries have a highly vested interest in scarcity. If it’s a zero sum game, we need institutions to protect us from ourselves. If every time there’s a winner, there’s a loser (and the bigger the winner the bigger the loser), then we must have authorities to referee the game. A scarcity mindset leads to resentment, guilt and destruction. Abundance leads to creation, gratitude and cooperation. As economist and business profession Julian Simon professed, there is one – and only one – natural resource. It’s called human ingenuity…and I wouldn’t bet against it.
Stop Working On Your Business
I blame Michael Gerber. In his seminal book, The E-Myth Revisited, he embedded the idea “You need to work on your business, not in your business,” into the hearts and minds of millions of entrepreneurs. Since then it’s become a standard in speeches and articles from consultants and advisors of all shapes and sizes. It’s become a mantra for many.
Before anyone goes off the rails, please know that I am not saying that executives need to stop working on their businesses (and, yes, the vast majority of executives need to spend more/better time working on the business).
The problem with the advice is the word “not.”
The reality for 98% of small and mid-market business executives is that while they do need to work on the business, they must work in it. If you’re a senior executive at GM, Microsoft, FedEx, P & G, etc., you have the resources and people to be able to work on the business. However, if you’re a senior executive at a $30 million print company, a $200 million logistics company or a $5 million professional services company (to name a few) you are also in a critical role that drives and supports the operation. If you stopped working in the business, the business would be irreparably harmed.
The mantra causes 3 problems for SME’s and executives:
- It creates a lot of guilt and reduces confidence. For years I’ve always felt like I was doing something wrong because I kept working in the business, and that guilt caused me to be less effective and productive.
- Entrepreneurs and owners step out of critical functions too early, often putting people in place that are not prepared to manage the function.
- The business tries to do too much and under-allocates to important initiatives, stunting their growth. If I feel like I need to stop working in my business, I’ve got a lot to do. So I try to do it all, and end up doing none of it well.
Working “on the business” means focusing on and building the systems and structure that allows each discipline to be performed repeatably, sustainably and predictably.
The advice needs to be: Entrepreneurs, owners and executives need to work on their business while working in it. Doing this successfully requires:
- Focus – don’t work on more than 1 – 3 initiatives at a time.
- Seek outside counsel – I realize this sounds self-serving, but it’s important nonetheless. When you’re working in your business, you’re too close and too involved in the system to see things clearly. Outsiders with deep expertise can get you where you want to be faster and easier.
- Prioritize leverage over productivity. Find ways to spend your time and resources on initiatives that create leverage, and reduce the focus on effort over time.
The Greatest Opportunity for Value Creation
It’s an amazing time to be a business executive. Never before have we had the access to information that we have today.
- Want to know how many people search Google using specific words or phrases? Not a problem, you can have that information in an instant.
- Looking for the latest insights into how to successfully generate leads? No worries, Google has 3.3 million options for you in .34 seconds.
- Want to know how to successfully implement performance management? Google’s got 155 million options for you.
I think you get my point. Getting access to information is easier and more robust than ever before.
While on one hand I love it. I’d never be able to do what I do without it. But, at the same time I find it overwhelming at best, and more often debilitating. As we’re developing our new website, every task is difficult because it feels as though there is too much information. Yeah, it’s easy for me to research keywords and once I know the words I want, finding someone who will “get me to page 1” is pretty easy. The problem is making the trade-offs necessary to choose the words!
This problem exists in virtually every industry and for virtually every discipline. In a world where companies like eLance, oDesk, 99Designs, etc. create a market of providers who bid against each other to do work, the most valuable white space for a small or mid-market company to create real value and become indispensable lies in curation.
Curation is the ability to create context, manage complexity and filter the noise for a select group of people that allows them to make decisions confidently and make progress towards achieving their desired objectives.
There are three important elements that must be present to build curation into your value proposition:
- You must demonstrate a real and deep understanding of your market place and customer base. When a customer allows you to curate, they are in essence “outsourcing” their decision-making (or at least a core part of the decision-making) to you/your company. This is a scary thing to do, so you must make your customers feel safe. You do this by demonstrating that you understand them as well or better than they understand themselves.
- You must focus on compelling issues that are clearly connected to the critical results your customers are pursuing.
- You must orient your story/message to support two points:
- That you understand where and how mistakes are made, and that you’ve got an approach to prevent those mistakes. If all you do is tell everyone how good you are, it would reduce the fear.
- Further you must focus on why what you do matters. While you can use details and proof statements to support what you saying, they cannot be the focus of your message.
Why Is Success So Difficult?
This post originally appeared on BizBeat, The Washington Business Journal’s business blog.
It’s the stuff of legend and mythology. The stories of Steve Jobs, Thomas Edison, Joe Montana and many more make the journey sound so exciting.
Over the last 25 years, I’ve learned a very important lesson about success – achieving it is boring. The benefits are great, but the process to achieving it is painful. Dealing with the boredom is the reason so few people reach their potential.
The problem is that the stories about success are dynamic and exciting. These stories make the legend and mythology of business and sports. After all, look at how much fun Steve Jobs was having as he introduced one game changer product after another. Who doesn’t want to be Derek Jeter, with the fun and the fame?
However, the truth of how they got, and stayed, there is quite different. It required the focus, discipline and commitment to work at the little things, and to do the things that few others do.
I see this every day in all facets of life. Whether I’m working with executives and entrepreneurs of growing businesses, salespeople trying to compete in today’s environment, or coaching the hitters for my college baseball team, everybody wants to skip the boring stuff and jump right to the fun stuff. I struggle with it myself.
In baseball everybody wants to get the game-winning hit, but few want to take 200 swings a day (for years) off the tee to work on the mechanics of good hitting. Every salesperson loves making the closing presentation, but few are willing to do the homework to study and practice their craft. Executives love strategizing and visioning, but few realize that driving business growth is about staying focused on the same few things, day after day after day.
Preparing for success is fun, but that once things get going the process can get boring quickly. Even worse, it gets frustrating and difficult. Nothing happens as fast as we want. Since we’re all biologically programmed to avoid pain, most people decide that “there must be a better way,” and start the process all over again.
Whenever I see this happen, I always think of the conversation I had with one of the hitters I coach. He told me that he had figured out one of the things he was doing wrong and he told me, “Coach, I think it’s really going to help. Maybe if I spend the next two weeks working on it, everything will be good.”
What was sad, is that he really felt he was being patient. Unfortunately, he still needs to learn that success is a lifetime pursuit.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
