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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 Fastest Test to Determine If You’re A Peddler
Ever since I wrote my post about Pests, Peddlers and Demand Creators, the most common question I’m asked is, “How can you tell if you’re being a Peddler or Commoditizer?”
Here’s the simplest and fastest way to determine if you’re peddling:
Look at how you approach your prospects and customers early in the sales cycle. Consider the questions you ask, the material you share and the possible presentations you make. Now answer this question: Who learns about the prospect/customer’s company?
If the answer is you (or your sales rep) you’re a peddler. If the answer is the prospect/customer then you’re positioned perfectly to break-free from The Commoditization Trap.
You read that correctly. If you want to avoid being commoditized and being treated like a Peddler, your job is to ensure your prospect/customer learns about their company, their situation, problems and opportunities from the very first interactions. Learning about your company, it’s products and solutions comes last, with no exceptions.
The problem so many selling organizations have is they view their first interactions as a qualifying or needs assessment process. They ask questions to educate the selling organization, and, frankly, they bore the buyer.
- Don’t ask how the company has handled a function in the past. Instead ask them how they’ve adjusted to address the problems that could be causing that function to be performing at subpar levels.
- Don’t ask them what do they like about what they’ve done in the past and what would they would change? Provoke them with your Commercial Teaching Point-of-View that will cause them to look at their solution differently.
The point here is that the bar has been raised to making high value sales. You can no longer rely on the customer to educate you on what they need. You must teach them instead. When you do that, you’re in a position to create real demand and separate yourself from your competition.
Imperfect Content
Over the last eight years, I bet I have published more than 1000 pieces of content. Between my blog, columns I write for magazines, guest blog posts I write for other blog sites and magazines, I put out a lot of content.
Frankly, it’s one of the major advantages I’ve had in growing my business. A few years ago I quantified the impact of my blog alone and valued it to create more than $2 million of documented value for my company. On top of that I’ve won many awards and gotten quite a bit of press for the blogging and publishing that I’ve done.
I’ve done this while leading a growing company, speaking on a regular basis, coaching a college and youth baseball team, and spending quality time with my wife and two kids. I don’t work 80-hour workweeks, and I take the vast majority of weekends completely off.
While I am certainly comfortable writing, and admittedly I write pretty fast, the reality is that I have no special power when it comes to writing, creating or publishing content. What’s my secret? I’m completely comfortable putting out imperfect content.
Here’s what I don’t worry about:
- Is the idea fully, totally and accurately communicated.
- Is the article/post/paper too long? Too short?
- Are the pictures the best we can do?
- Is there 100% chance that there are no typos or problems with sentence structure?
- I could go on, but I think you get the point.
Several years ago I wrote a little book calling Building The Bridge. It was my first attempt at writing a parable. I wrote it, had it designed, edited, published and printed all in house. In hindsight the dimensions of the book were too small. There were some typos in the book. The design was rudimentary.
And, as it turned out, the biggest mistake was that I didn’t print enough of them. Sure some people complained about the style of the book. Others said they’d never buy from someone who would publish a book that has typos. While I certainly don’t celebrate those mistakes (and we work really hard to fix them and make sure they don’t happen again), I do celebrate the more than $500,000 of revenue that the book directly contributed to creating.
While others are fretting over what they’re saying and how they’re saying it, I was earning more than a half-a-million dollars.
The point here is that the value of your content builds over time. You readers (customers) are not experts, and in most cases have desire to become experts. The primary job for content is to put it forth consistently and ensure that it’s easy to consume (and even entertaining).
You’re not going to tell your story in one post. You’re not going to change your prospect’s worldview with one article. The job of your content is to tell your story and influence your market over time. Remember, perfection is the enemy of progress, and if you focus on making sure “it’s right” before it goes out, you’re going to get beat by someone who moves quicker.
Uncovering The Real Power of Brand
As I’ve written before, “Brand” and “Branding” are words tossed around in a variety of ways. For small and mid-market companies, the vast majority of what’s thrown around about branding is crap.
I’d like to highlight the portion that isn’t. To begin that journey, I ask: Do you really understand what your brand is, and the power behind it?
I’m always looking for new ways to help owners and executives of growing SME’s understand that, and recently I came across a branding study designed to guage the power of a brand. I’m a big fan of Marty Neumeier, and since his firm was behind the study, I looked at it closely.
The Brand Impact Study highlights four important attributes to determine a brands power. These four attributes are valuable for any executive looking to expand sales, margins or both. They are:
Awareness
- Do the right people know who you are?
- Do they have a positive, meaningful impression of your business?
Consideration
- Do they consider your business relevant?
- Do your prospects position you as a problem solver, or merely a solutions provider?
- Do they view you as someone to engage with while they’re figuring things out, or after they’re ready to issue an RFP?
Preference
- Does your target audience understand your value proposition?
- Do they acknowledge, understand and value the difference your bring to the market?
Purchase Intent
- Do your prospects understand your impact ?
- Do they understand, and can they articulate the consequence/cost of not doing business with you?
Strength in these four areas – with the right prospects/customers – is the definition of a powerful brand (even if most people don’t know who you are). Keeping these four components at the top of your mind when developing your marketing and brand strategy will go a long way to accelerating your growth and protecting your margins.
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.
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.
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.
What Is A Strong Pipeline?
One of the toughest behaviors to change when salespeople are working to transform from being peddler to becoming Demand Creator, is the relationship they have with their pipeline.
Having been taught (consciously or otherwise) that sales is a numbers game, peddlers always feel better when the pipeline has more opportunities in it. As salespeople move up the value chain, they gain an understanding that the quality of an opportunity is far more important than the quantity.
This leads to a pipeline that feels weaker, and it increases the fears associated with the the necessary change in behavior and mindset. While the pipeline is actually becoming stronger, it doesn’t feel that way..
In 20+ years working with salespeople and sales management, I’ve learned that there’s little reality in most pipelines. While there may be many “opportunities” listed, few of those opportunities are real. A couple of years ago we conducted a comprehensive pipeline review with a new client’s sales team. The review started with 59 opportunities from 4 salespeople.
When we were done we discovered that 5 were bona fide opportunities, 7 had little to no chance of closing despite the fact that the company was about to invest several thousand dollars of man hours and expenses to prototype a solution, in 33 of them the sales rep was clearly talking to the wrong person and the rest were no better than a lead you could get from a newspaper.
The focus on quantity in the pipeline leads to several bad behaviors, such as:
- A lot of valuable time is wasted chasing the wrong opportunities or even the right opportunities, but with the wrong people.
- Reps lack the time to adequately invest in the right opportunities and places to build the business case and move beyond price.
- Pipeline reports become jokes within management circles, and businesses (especially small and mid-sized businesses) lack the critical intelligence needed to accurately assess their position and make adjustments in a timely and effective manner.
- An urgency mindset, instead of an importance mindset, is built; preventing salespeople and organizations from making the necessary changes to control their destiny.
Demand Creators firmly believe that all progress and growth begins with an honest picture of reality. They realize that focusing on fewer, high quality opportunities is the key to standing out and escaping commoditization.
Making the transition from a pipeline with lots of names on it to one with fewer can be quite scary, and it’s necessary to achieve the effortless growth you desire.
The Challenge of Different & Good
I love simple graphics that tell big stories. As I was reviewing some of my article archives, I came across this graphic from Marty Neumeier on The Dynamics of Different and Good. It’s about as simple and insightful as you can get.
I often remind small and mid-market business executives that being different should never be the goal, instead, it’s different and better. Yet, as this graphic explains, achieving the goal is the beginning of the journey – it’s not the end! When you achieve “difference” going to market becomes difficult. The market resists because it’s not used to it, and as a result your sales and marketing strategy must educate and influence your market. (For a deeper dive into this subject, watch my 25 minute video on the subject.)
What equally interesting and critical is the failure to achieve this goal results in the appearance of an easier path to the market. The market (and those whose opinions you seek before going to the market) respond more positively to what they’re familiar with. The challenge is that there’s little to no growth on that path, and lots of price pressure.
Market resistance is a part of the game. Don’t avoid it, embrace it.
Selling Done Right
What profession is best suited for a liar?
How do you know when a salesperson is lying?
It’s unfortunate that salespeople have become the butt of so many jokes. In the past I’ve written about pests, peddlers and Demand Creators, and shared the advantages to being a Demand Creator.
As the world continues to move forward from the deep recession, there are still not enough companies that are building the organizational capability necessary to consistently grow profits. Selling, on the whole, is not creating the value necessary to support higher margins and faster profit growth for small and mid-market companies.
Ineffective sales efforts are actually contributing to:
- Greater commoditization
- Lengthening sales cycles
- Greater price pressure
As I’ll be sharing next week in our free webinar on The 7 Steps to Shortening The Sales Cycle, businesses need to create a new path and implement new approaches to sales. Now, more than ever, it takes an organization to sell effectively, not just a salesperson.
Done right, your sales effort is the most powerful, leverageable resource to accelerate revenue and profit growth, and to increase the value of your business. Building the capability enhances your brand, allows you to bypass competition and serves as a virtually insurmountable competitive advantage.
Selling properly requires that you stop focusing on making a sale. Instead, you need to focus on being relevant, helping your customers achieve their objectives and teaching your prospects how to improve their worlds.
It means slowing things down a bit, (really) putting customer’s interests first and understanding that sales, profits and business value are the result of a proper focus, and cannot be the focus.
When you realize that the job of sales is to help, and you build the system to make that happen, suddenly the sales process becomes easy.
7 Steps to Shortening Your Sales Cycle
The trends are not good when judging the effectiveness of small and mid-market B2B sales efforts.
- According to recent purchasing surveys, as many as 40% of organizational buying processes are ending in a “no decision.”
- A recent research project done by the Wall Street Journal demonstrated that on 37% of salespeople were actually effective, and a comprehensive research project done by The Sales Research Council shows number worse than that.
- Margin and pricing pressure continues to mount on businesses, even as we emerge from deep recession.
- Finding good salespeople is tougher than ever.
Most companies continue to struggle to find a successful growth formula that will work in the short-, mid-, and long-term. There are, however, a few businesses that have transformed the challenges before them into a significant advantage over their competition. They’ve developed new ways to shorten the sales cycle, bypass competition and grow margins.
These companies understand that their sales process is the most powerful leverage point available to their business. Companies that are able to materially shorten the sales cycle enjoy huge advantages over their competitors.
- They need less money or capital to grow.
- They are able to capture more revenue without adding people.
- They enjoy a significant cost advantage.
- They’re margins and profits are substantially higher.
Shortening the sales cycle should be a key objective for every growing company. Yet, only about 5 – 10% of small and mid-market B2B companies are able to do so consistently.
Make sure you’re one of them!
Join us on May 23rd at 2pm EDT, as we share the secrets to shortening your sales cycle in our latest webinar.
7 Steps to Shortening Your Sales Cycle
May 23, 2012
2pm EDT
The Key To High Margin Sales
I don’t know about you, but Varuca Salt was my favorite character in Willy Wonka and The Chocolate Factory. “I want an oompa loompa, and I want one now.”
I think of her virtually every time I work with an entrepreneur on their go-to-market approach. “I want more high margin sales, and I want more high margin sales now.”
The biggest frustration in building an effective go-to-market approach is simply the time that it takes. Recently I had a prospect ask one of my references, “Why does the process [referring to our process] take so much damn time? What can’t they just bring something in and have it done in 90 days.”
A major impediment to small and mid-sized businesses growing is the inability (or unwillingness) to look longer term. Too often, executives try to “fix it now.”
Here’s what is important to understand, if the problem could be solved quickly:
- You would have already fixed it,
- The problem would be of little value, and/or
- Every one of your competitors would be doing it already as well.
One of my favorite sayings is, “It takes one year to get a year’s experience.” There’s simply no shortcutting it. When you try to shortcut it, bad things happen.
Those who accept the challenge and bring the discipline and patience to solve the big problems gain a significant advantage vs. those that do not. Remember, the time it takes is the “brick wall” that keeps your competitors out.
Another Word For Solution
Do you want to know another word for solution? It’s commodity. That’s right, any time your focusing on a solution, your solution, you are focusing on a commodity.
Let me share some examples:
- ABC company develops unique solutions. Really, it’s ABC company develops unique commodities.
- ABC’s dynamic solutions enable companies to create advantages. Really, it’s ABC’s dynamic commodities…
Think about that. How can a commodity be unique? How can it be dynamic? It can’t!
A commodity is anything with a perceived alternative – and every solution has an alternative.
Last year I shared some important insights into pricing and how to increase the desire people have to pay you more. I talked about the importance of focusing on the right-side of the value equation, not the left.
Solutions are at the core of “left-side value.” Results are the core of the right.
When you focus on the real results companies desire, you’re having a “what’s it worth conversation.” When you spend your time exalting the superiority of your solution, you are merely commoditizing yourself.
So, get out of your own way. Forget about you and focus on the customer. Understand them, and what it is they really want. What are their end results? Tie them back to your approach, and the solution takes care of itself.
Beating The Typewriter (Part 2)
Yesterday, I shared the challenges associated with selling new and better products/services. I shared the six steps to preparing to sell anything disruptive. Today, I’m going to put the six steps in actions and share with you how I would sell word processing in an age when the Selectric typewriter with auto correct tape was considered cutting edge.
Putting It All Together
I’d focus on mid-sized and large law firms. Before the word processor, these firms dealt with paper and writing in massive ways. They had large secretarial pools that created no value but retyping complex documents. Think about the waste!
Also, at the time of the word processor, laws and regulations were changing that dramatically affected a law firms ability to compete. So while the general partners within these firms cared little about the technology called “word processor,” they cared greatly about their partnership distributions and their ability to compete.
I’d provoke their awareness on the large, unnecessary waste caused by the constant typing and re-typing of documents. I’d share with them the leverage they could gain by serving far more clients, with far fewer people. And I wouldn’t stop there. I share how small savings in time and costs spread throughout the organization added up into millions of dollars of lost profits.
I’d ask them what they would do with those profits. Would they add them to their distributions making far more money with no increase in effort? Would they take the cost savings and reduce their fees in an effort to take business and market share from their competitors? I’d highlight the dangers they’d face if they failed to adjust and adopt this new technology. I’d acknowledge the costs, fear and disruption associated with buying from me, and I’d highlight the costs of not buying from me. As history proved, it would become a pretty easy decision.
I think you get the point. I’d sell word processing, not by focusing on the word processor – but by focusing on the result. I’d sell small technology in a BIG way.
Maybe you’re not selling a disruptive technology. Maybe your product/service isn’t the game changer that the word processor was.
It doesn’t matter! In today’s commoditized world, adopting these 6 steps is the only way to ensure that you get the reward your deserve.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
