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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 Seller’s Paradox
When I conduct sales training for executives and sales teams, I typically finish with the valuable thought:
“Stop Selling! If you feel like you’re selling, you’re doing something wrong.”
I call it The Seller’s Paradox.
- The more your focus is on your products, services, or (dare I say) your solutions , the less likely you’ll be valued or make a sale.
- The faster you try to get to the proposal/recommendation stage in your sales process, the longer and less likely you’ll be to make a sale.
- The harder you work to prove your worth, the less likely it is you’ll be valued.
When you’re selling (or building a go-to-market strategy) you must – must – put thoughts about yourself or your interests aside. This is the entire point of what Demand Creation Selling is all about. Traditional selling is built on a very weak foundation. Your active sales time allocation looks something like this:
- The first 20% of your time is spent on qualification, which is really a one-way check-in for the salesperson to determine if they prospect/customer is capable of buying. While surface attention is paid to needs assessment, it never goes deep to create value.
- The next 30% of the time is spent presenting, proposing and trying to convince your prospect/customer of your capabilities.
- And finally the real dance begins, as 50% (and sometimes more) of the time is spent chasing down the prospect/customer, attempting to overcome objections, negotiate and close the business.
If I had $10 for every time a salesperson or executive I was either coaching or managing said to me that they wish they knew something that came up in the last phase of the process earlier, I wouldn’t need an income for several years.
However, if you go against the grain and build a solid foundation, one where you spend the first half (or more) of your time digging deep and diagnosing, you’ll accelerate your sales cycle, and bypass the shop cycle 80% of the time.
Diagnosing means uncovering issues and enabling your prospect/customer to understand their situation and needs, as well as you. When taking this approach, your prospect/customer stops seeing you as a salesperson, and instead views you as a critical resource to enable them to achieve their critical objective.
When you occupy this spot in their mind, objections, hassles and delays disappear.
Why Your Forecasts Are Always Wrong (Find & Eliminate the False Positives)
The underlying system of sales is designed for failure. This is supported by the way companies manage, track and review their sales pipeline. Inadvertently, companies are making sales growth difficult, choppy and unsustainable as I discuss in my presentation The 7 Steps to Achieving Effortless Growth, I share that one of the primary reasons that is that the underlying system is designed for failure. Below are steps you can take to reduce false positives in your forcasts.
When the focus is on why people should buy, rather than on the barriers to buying, false positives (the belief that a prospect will behave positively and fails to) increases. Salespeople, who are naturally optimistic to begin with, know that as long as they can find a reason that someone should buy, there’s hope (and they can keep their sales manager off their back).
The problem with false positives is they dramatically increase the noise associated with predicting future business, and cause poor decisions made in every facet of a business. As Nate Silver shared in The Signal & The Noise (a great book that every business and sales executive should read, and that I will be reviewing on my blog later this month), false positives cost millions of dollars in lost opportunities and poor resource allocation.
Early in the sales cycle (where false positives are most prominent), a false positive rate of just 25% (which for most companies would be quite good), will cause sales management and salespeople to overestimate the likelihood of a customer closing by 4 – 8x.
While you’ll never totally eliminate false positives from your process, a good goal to set is for them not to exceed 5 – 10%. This requires a rigorous approach to pipeline management, necessitating that it be built into your sales process.
Here are the first steps to take to begin reducing false positives:
- Review
- Review all the sales opportunities that you’ve lost in the last two years and create a list of what caused you to feel confident they would buy.
- Looking at those opportunities, be completely honest with yourself and identify potential false positives. In other words, don’t rely on the excuse, “They went with a competitor who sold it for less.
- Reward
- Spend more time focusing on the barriers to a sale, and praise the reps who bring honest feedback.
- Encourage reps to share their concerns about making a sale.
- Reinforce
- Keep track of your pipeline forecasts and revisit those forecasts with reps every quarter.
- Don’t ask your reps to make a single forecast. Ask for different time periods (ie 30 days, 90 days, 6 months, etc.) and different probabilities (20% best case, 50% and 80%).
Focus on these three areas, build them into your sales system and you’ll see the sales soar.
The Sales Power of An Effective List
One of the first things we do when working with someone with direct sales responsibility is to have them create what we call a Focus 50 list. We ask them to list the 20 best sales opportunities that they expect to close in the short-term, and the 30 best opportunities they are focused on cultivating for the long-term.
Inevitably the response is along the lines of, “Not another list. I hate lists. I don’t need a list.” I’ve learned that the majority of people (especially entrepreneurs) hate developing and maintaining prospect lists. I admit it – I hate it too.
I find the task of developing my target list to be a tedious, often mind-numbing process. After all, I’ve got my CRM that has everyone’s contact information; and besides, I know who my best opportunities are.
I’ve also learned that the best leading indicator to lagging sales performance is when the focus on developing, maintaining and updating the Focus 50 begins to dissipate.
Here’s the formula for successful sales effort:
The purpose of maintaining an effective list is that it focuses your mind, it forces you to think through issues to get the clarity needed for confident action. It prevents you from lying to yourself, and allows you to measure progress instead of just activity.
So, yes, lists are a mind-numbing pain in the…butt. And, they’re necessary to achieving the top performance. Take the time and finish your list now.
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.
How to Get Access To Any Decision Maker
One of the consequences of the economic downturn, and the reductions in workforce over the last several years is a greater gap between executives with the authority and the people who are responsible for implementing and overseeing solutions.
When I work with salespeople, the most common challenge they have is getting access to authority. To get the access you desire, the first, most important thing you must do is to have something worth talking about.
Here are the five steps to take to get the access you desire:
- Be very clear who you want to speak with.
- Determine the critical results this person is responsible for.
- Next, use your experience to determine the most likely problems or issues this person is having in attaining these results.
- Now to determine the consequences of not utilizing your solution.
- Develop a well-defined resonating case to share with your targeted prospect.
For example, if I’m trying to reach out to a VP, Sales to begin conversations, I’d skip the focus on my features and benefits. Instead, I’d share something like this:
Over the last 20 years, we’ve worked firsthand with more than 1,000 companies mid-market growth companies. We’ve learned that these companies are getting, at best, only 50% of the results from their sales and marketing investments they should be getting. We’re concerned that if you don’t identify the issues that are causing this problem, you’ll lose hundreds of thousands to millions in lost profit and equity value. I’d like to share our findings with you, and share some tools with you so you can ensure this doesn’t happen to you.
The key to access is knowing your customer better than they know themselves. To get a jumpstart, you can download my Understanding Your Customer Workbook.
Where Did The Risk-Taking Go?
For the first time in my life, I’m actually concerned about the future competitiveness of America. It has nothing (at least directly) to do with the recession we are either in or just completing. It has everything to do with the USA going against type.
I just finished reading a research report discussing why and how banks are under extreme margin pressure. The report states:
“Conventional wisdom holds that a steep yield curve is good for banks — borrow short, lend long. With a Fed Funds rate of essentially zero and banks paying almost nothing for deposits as well, bank-funding costs are at all-time lows. Unfortunately, after a prolonged period of near-zero rates, bank assets (both loans and securities) are also re-pricing to all-time low levels. Banks also remain cautious about lending, choosing to park cash in safer, but lower yielding assets.”
As I read this report, it made me think of what the television networks are doing with reality programming. Because of their low cost, networks are almost guaranteed to make money – just not much.
These two points are symbolic of a series of actions that I’m seeing taking place in companies – both big and small. Every time a company makes the decision to focus on exploiting its current assets, rather than exploring how to deepen and expand those assets and the impact of those assets; it is behaving like the banks and television networks.
I’m concerned that many American companies are coming down on the wrong side of a critical, philosophical business question: “Are profits the result of having the right focus or are they the focus?.”
When banks stop lending, or television networks begin relying on cheap reality programming, they are making the decision that profits are the focus. When you’re focus is on profits, you start extracting value from your market and you stop taking real risks because they’re, well, risky.
When you focus on your customers and you answer the question – “what can we do to improve their lives like no one has done before,” and then you pursue that path with dogged determination; then you’re making the decision profits are the result of the right focus. When you make that decision, you see risk through a new prism, and while it does, in fact, represent risk it also provides great reward.
For more than 100 years, America has been the most profitable country in the world by focusing on taking the right risks and creating value better than any other nation. I sure hope we don’t lose that.
Let Them Taste It
I’m from the government, I’m here to help you.
The check is in the mail.
Really, I promise you’ll get the benefits after you buy from me.
Truth be told, this is how 95%+ of businesses position themselves in the sales and marketing process. I’ve written (ad nauseum) about the fundamental need to create value in all aspects of the sales and marketing process. The problem is that merely claiming to be the best choice or promising that you’ll do wonderful things for people after they buy is not enough to capture the hearts and minds of people. Claims are no longer enough to drive buyer behavior.
Instead of waiting for people to buy from you before they can get a taste of what make you different, special, unique and/or better; let them taste it from the very first time they encounter you or your company – and furthermore, let them continue to taste it all the way through the buying process.
This is why content marketing is so powerful. Instead of promising expertise or superiority, you’re delivering it. By doing so, you are reducing the perceived risk for the buyer (which in an environment like today is a BIG deal), and giving the buyer more control (thus increasing their confidence), all while you build marketing assets which increase in value, and give you leverage, over time.
Recently, I was working with a client who had seen a precipitous increase in sales cycle times and sales costs. As we reviewed the problem, we found a significant increase in the number of opportunities that stalled towards the end of the sales cycle. The losses had been excused away – it was the economy, the prospect was cutting back, no more discretionary budgets, etc. As we reviewed their sales process, I discovered that they did a pretty good job up-front in establishing needs, but then fell back to the we-do’s. The value proposition focused on superior workflow process design, and how that design decreases costs and increases an organization’s productivity. As I said, they did an effective job of identifying cost and productivity needs, however, they left it to the buyer to believe their organization could help them. I recommended that they stop promising better workflow design and instead start letting their prospects experience it – at every touchpoint. It’s still early, but we’re already seeing an increase in sales and a decrease is cycle times.
Please note that what I’m talking about here goes beyond “sampling” (letting buyers try you out in some small, low risk fashion). I’m not against sampling, per se, but I think a) it’s often done in a highly transactional, manipulative way, and b) it is not enough. Sampling is what Kentucky Fried Chicken did when they made October 26 the “free piece of grilled chicken day.” What I’m talking about is re-orienting everything you do – from your website to your advertising to all aspects of your sales approach – to be the embodiment of the experience you are promising, rather than merely a statement of promise. As I shared in the recent webinar Making It Rain Even In A Drought, the lag time between the origin of a problem and the awareness can be quite long. By sharing your wisdom you can provoke their awareness, accelerate the sales cycle and make your competition irrelevant (because you’ll be the only one there when the prospect/customer becomes aware). The key is to stop selling your wares, and instead be helpful by providing your prospects a taste of your experience.
So, how do you (or can you) give your prospects a taste? Leave a comment, I promise I’ll give you feedback.
Making It Rain, Even In A Drought
Last month, we held three very successful webinars focused on helping business grow – regardless of economic conditions. Making It Rain Even In A Drought focused on three key areas:
- What is “the drought” and why are we in it
- What causes rain
- Three steps to what we call “The Raindance,” that puts you in a position to create demand and make your competition irrelevant.
We got so much positive feedback, we decided to share it with the readers of this blog. Enjoy. Feel free to leave any questions or comments you have about the ideas in the comments section – I promise to respond to every question.
(RSS readers that are not showing embedded video, click here to watch)
Part I – Focuses on The Drought & What Causes Rain
Part 2 – Focuses on the first critical principle to making it rain, instead of being forced to wait for the rain
Part 3 – Focuses on why most sales efforts fail to create economic value and how to monetize your sales efforts.
Thanks for watching. Please feel free to ask a question or leave your thoughts in the comment section.
Is It Time To Say Goodbye
Growth is disruptive. It requires change – all the time. There is nowhere that this is more true, and more difficult to deal with, than in the area of your client/customer base. It’s unfortunate, but the customers that get your business to one level are often the barrier to getting you to the next level of growth and profitability.
The only way a fast growth company can sustain fast growth is to find ways to increase its leverage. Fast growth must be geometric, not arithmetic. As your business grows, so does it complexity and its cost structure. You must find customers who are capable of paying you a multiple of that increase. The failure to do that will cause the business to be overwhelmed by complexity, and it will stall and stop growing.
Additionally, the most important asset you have to support fast growth is focus. You must serve a core customer base better than anyone in the world. If you growth plan has you catering to larger customers, or customers dealing with bigger problems, continuing to focus on your legacy customers merely holds you back from fully serving your future ones. Its an unfortunate truth about growth.
Sustainable fast growth is all about allocating resources to your highest value activities. And sometimes, that means you have to say goodbye to people that were very important to you.
Finding Demand Creators
Earlier this week, I wrote a post about The 5 Levels of Sales Excellence. It’s generated a lot of discussion, best summed up by this stream of comments:
- Rodney Johnson says:
Doug – you nailed this one. I can tell you that businesses are struggling with the peddlers and commoditizers in their organizations. If they could just find a few Professionals, they would be in heaven. If they could find a Demand Creator, they would have found Utopia.
So let me ask you. Where does one look? How do we evaluate? And are Demand Creators even available?
- Doug Davidoff says:
Rodney, that is a great question. I’ll begin writing the answer now. I’ll post it as soon as it’s done.
- Rodney Johnson says:
I thought about my question, and at least in my world working with CEOs through Vistage, I can say with certainty that the Demand Creators tend to be the CEO/Entrepreneur of the organization. They have the skill set. They have the business acumen. They have the connections. And they definitely have the drive. If this is the case, finding individuals out there with Demand Creation skills is likely a very elite and small group. Your thoughts?
Here are my thoughts:
First and foremost, Demand Creators and even most professionals are very rarely (to a statistically insignificant level) “found”; instead, they are made. The only meaningful exception to this, as Rodney points out, is found at the CEO and entrepreneur level. They create demand, most often, because they are the creators of the value for their company and can’t help but go deep and resonate with buyers. The challenge is that CEO/entrepreneurs create demand in a non-replicable way and that creates a “growth wall” that halts most companies’ growth.
While sales mythology is filled with stories of “natural” sales superstars, reality rarely lives up to the story. The only meaningful difference between these natural sales superstars, Demand Creators and unicorns, is that the sales superstar does actually exist; but they are EXTRAORDINARILY hard to find, they are very expensive and they are very difficult to keep happy. Peter Drucker said you can’t scale a business requiring genius, and the same is true here.
The Critical Element to Make Demand Creators
The prerequisite to make/create Demand Creators is a repeatable, sustainable sales and marketing process. This is where IBM destroyed its competitors in IBM’s heyday. IBM was a superior sales organization, not because they hired better sales people (actually, IBM had a huge advantage in their ability to hire younger, less experienced salespeople than their competitors), but because they had a superior process – in the full sense of the word.
This leads to another myth – salespeople hate process. Properly stated (and in the context of my post on Demand Creators) it is true: pests, peddlers and commoditizers hate process. Professionals and Demand Creators thrive on effective process.
Please don’t confuse a repeatable sales and marketing process with things like the stages of a sale. While I’m a big fan of a lot of sales training programs out there (and they’ve certainly inspired a lot of my thinking over the last 20 years), they do not represent process. At best, they represent stages. Whether you’re talking about Tom Hopkins, Brian Tracy, Miller Heiman, Neil Rackham, Sandler, Huthwaite, Bosworth, et al; they demonstrate stages, not repeatable process (please note, it is not my intention to slight any of these fine organizations, I think they all do a very good job).
Think about this for a moment. If you were interviewing an operations manager, front line worker, accountant, controller, CFO, or virtually any non-sales and marketing position and they said something like the following, would you hire them?
“Before you hire me, I want you to know that I have my own way of doing things. It’s worked for me for years so I’m going to do it my way, rather than yours.”
Of course not. Can you imagine an accountant saying they find GAAP just a little too constraining, so they’ll just ignore it (oops, I guess that’s what happened at Enron)? But companies let salespeople do this everyday. An effective process makes a decent salesperson good, a good one great, and a great one a superstar. (A superstar by the way is merely a great salesperson who follows a process – whether it’s a stated process or not.)
The reason a process works and is so critical is that an effective process introduces constraints. Constraints, properly applied, force increased focus – which leads to more depth. A salesperson can only create demand by going deeper than their competitors do. These constraints create predictability, which is critical to effectively allocating resources (which for a salesperson really comes down to time). As author, professor, and consultant Jim Collins has said, if you take the person out of the process, the person is no longer as good.
Further, a repeatable process is, by definition, trainable and coachable. This means that you can hire people who fit a particular profile (as done in any top notch hiring process, and a subject I’ll write about shortly) and teach them how to do this. This makes the position hirable and it enables a company to ensure it can continue to grow.
The problem that the vast majority of small and mid-market businesses (SMB) have is that they have neither the time nor the expertise to create such a system. So they either rely on the salesperson to “figure it out,” have absolutely no system or overly rely on the “systems” presented in sales training programs (which as I’ve already mentioned are not adequate substitutes for process).
I know this because for the last five years a core focus of my company has been helping SMBs create these systems, and we’ve been helping companies make their sales teams professionals and Demand Creators.
Are You A Pest, Peddler or Demand Creator
For the last 20+ years, I’ve spent my life working with businesses and salespeople. I’ve seen quite a bit change over that time – things that have both encouraged and discouraged me. On the encouraging front, I feel confident that today, the best, most capable and professional salespeople are there. Despite several calls for “The End of the Salesforce,” there are salespeople creating more economic value for both their employers and their buyers than ever before. Today, more than ever, the need for highly trained, capable salespeople is a must-have for businesses.
On the discouraging front, everyday, I see a majority of salespeople failing to create the very economic value that exist to create. While many salespeople have truly become professionals and executives, the overall “center of gravity,” if you will, of the sales profession has not moved markedly. This is damaging for two compelling reasons:
- First, in today’s ultra-competitive marketplace caused by the recent drought, salespeople cannot afford to be anything less than excellent to create economic value for the selling organization, and
- Second, the overall lack of professionalism and value creation on the part of sellers is causing an exponential increase in the number of buyers who actively finding ways to avoid dealing with salespeople altogether. They figure that since so many salespeople are commoditizing themselves, they might as well just treat them that way. This had led to the rapid increases in RFPs and the increase in power of procurement in buying processes.
Part of my company’s underlying mission is to end all of this bad selling and to support the understanding and growth of the strategic importance that sales and salespeople have. So, for the last 15 years, I’ve been keeping copious notes on the difference between bad salespeople, decent ones, good ones, and great ones. This has led to the creation of what I call The 5 Levels of Sales Excellence. Understanding these levels is important to ensuring that your sales efforts create value.
The 5 Levels of Sales Excellence
At the bottom are the pests. These are the salespeople who just go out and bother people. Their disciples of the “sales is purely a numbers game,” and gosh darn it if they don’t go out there pushing numbers. They’re the ones who show up at a networking event and greet all comers with the battle cry, “Nice to meet you, here’s my card.” They’re poor at asking questions, they don’t listen and they extract value from the process. The biggest problem they represent (even if you don’t have pests on your team) is that it is the profile of the pest that first comes to mind, and is most associated, with salespeople. When executives in your buyer’s organization here a salesperson from your company is coming, pest is the picture that comes to mind, even if they know that your salesperson isn’t one. So, you must always manage against this perception.
The peddler is focused on the “stuff they’re selling.” Often times, they’re great conversationalists (in that they can tell some terrific stories and have much charisma), and they play the part of resource, but you know you’re dealing with a peddler because they spend far more time talking than working to understand. Their “solution” is always the right one “if you’d just understand.” Peddlers don’t listen well, when they ask questions they’re not high value questions, and they don’t “go deep”. A peddler focuses on getting to the presentation/proposal/recommendation as quickly as possible and firmly believes that you have to ask someone to say “yes” five times to have a real chance at success. They thrive on objections, as they’re “buying signs.” Peddlers create little or no value in the sales process, and as a result they lengthen sales cycles and increase sales costs.
I used to call the commoditizer a “professional peddler.” The commoditizer is clearly focused on the solution. Typically, they have a significant level of expertise when it comes to the solution, and they believe firmly in it. Commoditizers ask a lot of questions (they’ve learned that’s important in selling), but the questions are very low value questions, and do not provoke and probe deeper issues. The problem the commoditzer has is that they are so clear about the solution that they suffer from the curse of knowledge. This means that to be fully understood and valued, the buyer must fully understand their problem (which they rarely do). Because they are so focused on the solution, buyer’s don’t view them as important until they have already decided that they need what the seller provides. At this point, decision criteria have been established and the buyer is typically in a shop mode, price becomes increasingly important in the selection process and differentiation is difficult (hence why we call this level the commoditizer). At this level, the sales person is doing an awful lot right, but because they are solutions focused they do not create value.
Important Point: This brings me to an important point. If the focus of your go-to-market efforts is on your solution and attempting to “explain why your solution is best” rather than on diagnosing you buyer’s issues, then you are peddling or commoditizing – at best!
The professional is focused on what the buyer needs. It is the professional that begins to earn a “seat at the table” and is viewed as an important player by the buyer. Buyers value professionals because they know that their best interests are being looked after. Professional’s ask high value questions, probe deeply and help to refine the decision criteria. Professionals create value in the sales process. Their primary drawback is that they limit their focus to the direct issues that their solution addresses and they rely heavily on “treating” the buyer’s awareness. While they do diagnose, they are not diagnosticians, so if the buyer is misunderstanding their problem or is merely aware of their symptoms, professionals will struggle in changing the perceived need, hence, they do not create demand.
Which brings me to the fifth, and highest, level of sales excellence: The Demand Creator. Demand Creators are superstars and when you think of them, you rarely think of them as “salespeople.” When Demand Creators sell (and believe me, they’re the most powerful sellers there are), it doesn’t feel like selling. Demand Creators are completely buyer focused, possess a tremendous degree of business acumen, and are viewed as critical resources by their buyers. Demand Creators have mastered results oriented conversations with buying organizations, have the ability to speak to a variety of levels of buyers and create value in everything they do. Demand Creators are tremendous advantages to their selling organizations, the selling organization doesn’t have to worry about “differentiating” because the Demand Creator is different. The Demand Creator is able to take the conversation with a buyer so deep that they eliminate competition. Demand Creators are comfortable that not everyone should buy from them, and that “now” may not be the best time to solve a problem. While Demand Creators work very hard, they make selling look and feel effortless. When you’re working with a Demand Creator, you know it.
So, where are you – and why? What stories can you share about salespeople you’ve encountered at each level?
Making It Rain Even In A Drought
UPDATE: in less than 24 hours we’ve “sold out” the Making It Rain Even In A Drought webinar. Because of how much it has resonated, we are adding more dates – see below for details.
The last three weeks have brought a tide change in the economic outlook. CEOs are looking at growth initiatives more than they have in two years. Despite the increase in optimism, there are still several challenges your selling team faces:
- Discretionary budgets remain virtually non-existent at most companies.
- Record layoffs have fundamentally changed the playing field at your buyer’s organizations.
- The purchasing function has seized more control than ever in buying organizations – leading to even more acute commoditization.
So, the question you must be able to answer is:
How are we going to make it rain – regardless of the weather?
On August 27, 2009 I will be hosting a special webinar to answer this very question. As a reader of this blog, I invite you and your guest to attend this webinar free of charge. Here are the details:
When: Thursday, August 27, 2009-SOLD OUT Tuesday, September 15, 2009 & Tuesday, September 29,2009, 2PM (EDT)
Where: Anywhere you have an Internet connection
How Long: 55 minutes
Registration Information: Click Here for September 15, 2009 or Click Here for September 29,2009
I am going to be keeping the number of participants on this call to less than 25 to ensure that it is interactive – allowing you to ask questions and maximize the application of the ideas I am going to discuss – rather than making it the typical “talking head” presentation. While your questions will clearly impact what is covered on this call, I can promise we will address the issues:
- The 3 Critical Actions You Must Take to Drive Growth In High-Margin Areas
- How to create your own “Business Oasis”
- How to shorten the sales cycle – in any industry
- Monetizing the sales process by creating Cash Flow Farms
- The single most important focus to ensure you business thrives in any market condition
Why I am doing this for free, you may be asking? Is this just a sales pitch in disguise? The reason:
With increased talk and focus on the possibility of recovery, we realized that many businesses are positioning themselves to make the very same mistakes they made that got them into this mess. We want to start a new conversation and provide small and mid-sized businesses a newer, clearer direction that leads to more profitable business growth.
With only 25 slots available make sure you register now! Click here for September 15, 2009 or click here for September 29,2009 to ensure you’re Making It Rain – no matter what.
The Truth About Innovation
I’ve always been a fan of innovation. I firmly believe that innovation is at the core for all value creation, and that any business that fails to innovate is destined to the ash heap of history. When I speak to groups of CEOs, I regularly talk about the importance of innovation. As a result, I’ve learned that there is very little understanding of what innovation really is. Too often, innovation is considered with new product development or, even worse, new hi-tech applications.
Last week, I came across a compelling article about The 12 Different Way for Companies to Innovate. You should check it out – it’s must reading for anyone who wants to harness the power of innovation for their business.
Here’s some of my favorite excerpts (with my comments in green).
- But what exactly is innovation? Although the subject has risen to the top of the CEO agenda, many companies have mistakenly narrow view of it. They might see innovation only as synonymous with new product development or traditional research and development. But such myopia can lead to systematic erosion of competitive advantage. (Right on the mark)
- Viewing innovation too narrowly blinds companies to opportunities and leaves them vulnerable to competitors with broader perspectives. (Again, right on the mark)
- In actuality, “business innovation is far broader in scope than product or technological innovation, as evidenced by some of the most successful companies in a wide range of industries. Starbucks Corp., for example, got consumers to pay $4 for a cup of latte, not because of better-tasting coffee but because the company was able to create an experience referred to as “the third place.” (This is a great example that executives need to grasp. Starbucks didn’t “invent” anything, but they were one of the most innovative companies in the world – and certainly in their market.)
- Conversely, technological innovation in the laboratory does not necessarily translate into customer value. (Simply put, every great innovation starts when someone looks at the world from the standpoint of the customer and identifies gaps. Everything is just guesswork.)
- To avoid innovation myopia, we propose anchoring the discussion on the customer outcomes that result from innovation, (Hallelujah!) and we suggest that managers think holistically in terms of all possible dimensions through which their organizations can innovate. Accordingly, we define business innovation as the creation of substantial new value for customers and the firm by creatively changing one or more dimensions of the business system. (If it doesn’t create value it’s not worth doing.)
Now my favorite takeaway:
Business Innovation is About New Value, Not New Things.
The Path of Least Resistance, Weight Loss & Corporate Growth
Robert Fritz, in his (great) book Path of Least Resistance: Learning to Become the Creative Force in Your Own Life
For example, understanding structural tension clearly explains why people tend to yo-yo with their weight loss efforts. As Fritz explains it (and I’m oversimplifying here), people who struggle with their weight tend to have competing beliefs. On one side, they have a belief that they should be healthy so they try to keep their weight under control; on the other, they have a belief that they like rich (fatty) foods. Rarely is their situation in balance.
When they feel healthy (their pants fit), they experience very little pain from the belief that they should be healthy. Because they feel no “health” pain, they focus on their belief that they like fatty foods – so they overeat. Overeating conflicts with their “be healthy” belief and, eventually, they feel more pain from not being healthy (their favorite shirt doesn’t fit). Because they’ve been eating what they like, they feel very little pain from the “I like fatty foods” belief; so they, temporarily, change their behavior and diet. This works, until people start complimenting how they look, their shirt fits again and they have been denying themselves their favorite foods. Because of the denial the “fatty food” pain, becomes increasingly acute, causes them to overeat and the cycle repeats.
So, what does this have to do with growth and the current challenges we are dealing with in the economy. Let’s take a look at two, typical beliefs held by growing companies: “expand opportunities” and “control or cut costs.”
When the economy and markets are good and revenue is more than covering expenses, businesses feel relatively little “cut/control costs” pain. So they get lazy and, in the name of “opportunism” and poor strategic planning, pursue opportunities with little discipline. This causes costs to rise at a greater rate than the rewards of their investments. As a result of rising costs or a change in market conditions, the “cut/control costs” pain increases significantly. Add to that the “opportunity binge” companies have been on, there is relatively little “expand opportunities” pain.
Just as people who wake up and realize they can’t wear their favorite clothes, companies go on a “crash diet” and cut expenses with little strategic thought. The lack of strategy and discipline that applied in the growth cycle applies equally in the cut cycle and mistakes are made, weakening the company. Keep in mind, the companies beliefs have not changed – they still believe in expanding opportunities, it’s just that the “cut/control costs” pain has become more acute that the “expand opportunities” pain. Eventually, the cycle shifts as the “expand opportunities” pain becomes greater than the “cut/control costs” pain. And the cycle repeats.
This is precisely where the vast, vast majority of business find themselves – they’re in the exact same position as people who struggle to lose weight. Just like the diet shows, gimmicks and shortcuts don’t work for people, shortcuts don’t work for businesses.
What’s the solution? Stop the insanity (yes, that’s a pun for those that remember one of the funniest diet gimmicks ever)! Fritz says that if the focus is on behavior – change will not stick. Over long periods of time, behavior always follows structure. The answer then is to change the structure and to integrate the beliefs. In business, this means that you have to stop looking at “cut/control costs” and “expand opportunities” as opposite ends of the spectrum. You must get out of the good market/bad market mindset. Companies should always be cutting, controlling, and expanding.
Here’s my challenge for you: How can you combine strategy, structure and people to enable you do get the work done by four people to be done better by three? If you’re always asking (and answering) that question, growth will become consistent and market conditions won’t control your destiny.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
