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Five Years From Now
Think about your typical customer using your typical product/service. And I mean typical – the customer and the offering that is at the center of the commodity part of your business. What is it that they’re getting? Why are they buying it?
How commoditized was that part of your business five years ago? My bet is that that your commodity today was an absolute home run five years ago – if it even existed back then.
Now think about your home run today. Where will it be on the commoditization spectrum five years from now? Probably obsolete.
The dominant strategic question in every CEO’s mind should be:
Why is it that people will be buying from us in 5 years?
Take a moment and ponder that question. Now, what are you doing today to pave the way for that future? Remember, your profits today are the result of you efforts from the past – and your profits tomorrow will be directly tied to the actions you take between now and then.
Don’t get lost in the answer to this question. The reality is that it’s virtually impossible to have any idea what we’ll be doing in 5 years or what our customers may need. But, the focus of 5 years is important because it forces you to break out of your company’s comfort zone and to prevent you from becoming complacent.
It is the job of the vast majority of the people in your company to maximize the results of your current business – it’s your job to figure out what that will be in the future.
Commoditization Is Still The Enemy
I was talking with my friend, advisor and client Gini Dietrich, and it hit me that I’ve been blogging for 5 years now. So, wanting to avoid some work for a few minutes, I thought it would be fun to go back and look at my first few posts.
I have to admit that as I read them I was surprised by how applicable they still are today. My first content post was titled Commoditization Is The Enemy of Growth. Unfortunately – it still is. For your benefit, I’m posting it again:
How easily can buyers quantify the differences between your offering and your competitors? How easily can your customers make those same distinctions? How can you continuously differentiate your company when market forces are constantly commoditizing you? Think about that question for a moment. It is the greatest challenge facing businesses of all sizes in the 21st century.
Commoditization is the evolutionary process that reduces all offerings to their lowest common denominator. Commoditization is the situation businesses find themselves in when their focus is mainly on their offering instead of the quantifiable difference their offering delivers to their customers. I have asked over 2,000 businesses why people should buy from them. Virtually all of the answers fall into the category of “we are better,” or “we give more value” and virtually all of those answers propel the business into commoditization.
“Value creation” is among the most common buzzwords used in business today. There is only one meaningful definition in business for the word value: something buyers would be willing to pay for. Your company can do great things, but if people aren’t willing to pay more for it, your company is not creating value.
So I ask: What are you doing to break away from commoditization? How are you making value creation a core discipline of your company?
Do You Have Competition?
Let me be clear:
If you’ve got a viable business you’ve got competition.
I often hear executives claim that they don’t have any competition. I even catch myself saying it about Imagine, sometimes. The reality is, no matter how “unique” your products/services are, your customers and prospects still have alternatives. You may (and I emphasize “may”) not have any direct competition, but you certainly have:
- indirect competitors, and
- the toughest competitor of all, the status quo.
People don’t buy products and services so much as they “hire” a product or service to do “a job.” This means that if some doesn’t have a problem (a job to be done) there is no opportunity for [a sale]. The only offerings that can have no competition are the ones that do a job that nobody wants. To be accepted in the market, you must be able to define the job that you are asking people to hire your product/service to do.
This is an important distinction, because a critical strategic decision for any business is how you define your competition. The brain of your customers/prospects requires contrast to understand and act. Your definition of competition is what makes it possible to radically differentiate your company (think about it – how can you contrast with nothing?).
Example
When I started Imagine, I thought I had an approach that was so unique that no one did what we do. So when asked who my competitors are, I brazenly responded: “We don’t really have competition. No one does what we do.” That, of course, got me nowhere. I was so focused on getting people to understand what we weren’t (we weren’t Sandler, we weren’t Miller Hieman, no we weren’t a marketing agency, and so on) that no one could understand what we were.
I realized that I needed to define my competition. The easiest way to do that was do compare us to “sales trainers.” But, I knew that sales training was a highly commoditized, highly competitive market and that it would be virtually impossible to stand out or to earn the fees we needed to deliver the results we promise.
Stuck (because I could define what we weren’t, but not what we were) I asked myself, what is the job that someone is hiring us for?
My first thought was that people were hiring us to do sales training. But I knew that didn’t do us justice. So I pondered it more and I realized that no one wants sales training – what they want is more sales. More, profitable sales and faster sales. That was our job – to enable companies to get more sales, faster sales and more profit per sale.
Now defining my competition was easy – we compete (and cooperate) with virtually any product or service designed to help companies with their go-to-market strategy. This completely changed the focus of my company, enabled us to attract some great clients that would never of hired us to merely do sales training, and it gave us a track for successful innovation. Today, we continue to pursue that journey.
Now it’s your turn. What “job” do people hire your products/services to do? What else is competing for that job?
3 Keys to Building High Performance Sales Teams
On Thursday, June 24, 2010 I’ll be sharing some secrets great companies know that have enabled them to build and sustain high performance sales teams. For most of the last 20 years a good sales team was enough to enable your business to be relatively successful. Great sales teams were always beneficial, but the reality was that the costs – in time, effort, disruption and money – were often too high to justify the effort.
That is no longer true. Going forward, businesses must invest the energy and the resources necessary to sustain high performance. The costs of failing to building a great sales capability will threaten the sustainability of your business.
The Drought we all live in now means that are fewer resources available to support your solutions. The only way you’ll be able to drive the margins you need to be successful will require you and your organization to be better than ever in the selling function.
As a preview to Thursday’s webinar, I thought I’d share the three most critical prongs of a high performing sales organization:
- At the foundation of every great selling organization is a great process. What made IBM and Xerox the best selling organizations in their day was a superior sales process – not hiring superior salespeople.
- In the future, salespeople will not staff superior selling organizations. Let me repeat that – salespeople will not staff high-performance sales teams. Instead, they will be staffed by businesspeople who sell. The single biggest contributor to a salesperson’s ability to succeed will be their level of business acumen. High-performance companies invest in the business acumen of their salespeople.
- Great selling organizations provoke the awareness of problems, rather than provide solutions. As I’ve written before, solutions are worthless. To drive the demand and the margins you need to be successful you can no longer wait for potential buyers to realize they need you. Your company and your salespeople must be able to effectively provoke awareness before your customers and prospects know they need you.
If you’d like to learn more about how you can apply these three critical prongs, join us on Thursday, June 24, 2010 at 2pm EDT.
Building High Performance Sales Teams
For most of the last 20 years businesses and salespeople have had a tremendous tailwind supporting their sales and growth. Over the last 3 years that tailwind has disappeared, and in some cases has become a wind holding businesses back. While good used to be good enough, going forward the price you pay for having a good sales team instead of a great sales team will multiply. So, the question that must be answered is:
How does a company build a high performance sales team in the middle of an economic storm?
On July 1, 2010 at 2pm EDT I will be hosting the latest in our Demand Creator Webinar series. This month we will be focusing on Building High Performance Sales Teams. I’ll be sharing with you the most important secrets that the greatest selling organizations know, along with the roadmap to enable you selling efforts to become an unbeatable competitive advantage.
For just $99 you’ll learn:
- The biggest myths in developing an effective sales team
- The 3 critical actions needed to build a high-performing sales team
- How to determine where your sales team stands
- The most important difference between great sales organizations and average ones (it’s probably not what you think)
PLUS
- We’ll answer all of your questions about building sales teams
You’ll learn:
- Whether your sales team will get you where you want to go or not
- To identify specific actions to improve your sales efforts immediately
- To have a clear path and plan to make your selling efforts a competitive advantage.
Whether you’re currently leading a sales team, considering building one or even if you’re a salesperson yourself, Building High Performance Sales Teams is a must attend webinar if you want to make your selling efforts a competitive advantage.
How To Win With Purchasing
Let me tell you a secret that all great Demand Creators know – purchasing or procurement is your friend. That’s right, Demand Creators love the purchasing and procurement function.
How? Why? Here are some reasons:
- Purchasing is a brick wall that prevents good salespeople from breaking through, so Demand Creators gain a significant advantage.
- Purchasing is the grand commoditizer and, as such, plays right into a Demand Creator’s ability to radically differentiate.
- Demand Creators realize that purchasing people are people too, and are motivated just like everyone else. This knowledge allows them to gain significant control in guiding how purchasers make decisions.
If you want to be one of the few (probably less than 5%) of salespeople who know how to gain an advantage here are some important tips to keep in mind:
- Purchasers, like everyone else, are motivated by achieving business results. The problem for sellers is that the results they seek often are not in alignment with the purpose of the sellers’ core offerings. Your job, as a seller, is to first understand the results that they want, then demonstrate how you can achieve them.
- Purchasers rarely live with the pain that your offering is designed to solve. So, the more you talk about superiority and expertise the less you are going to impact them. You must talk with purchasers about critical issues for them.
- Most importantly, you need to understand the people in purchasing are responsible for one primary function: purchasing the proper specs at the lowest possible price.
So, if you want to impact the decision without lowering your price you must get the buying organization to change the specs. Simply put, if you change what it is that purchasing is looking to purchase, then the budget and the decision that purchasing makes will change as well.
To truly succeed when procurement is involved, you must influence the [decision criteria] that determine the specs. You must remember that procurement is not responsible for setting the specs – they’re responsible for fulfilling them. Other people – those who live with the pain – set the specs. Make sure you talking to them before they think they know what they want.
Please do not misunderstand this post. I am in no way saying that procurement is unimportant or should be avoided. They should be embraced and supported in the context of enabling your customers to achieve their critical results.
The Most Important Thing to Know in Sales
Anyone who has heard me speak knows that I believe business acumen is the most important capability for a successful selling. One of my goals in writing this blog is to support the development of business acumen in the sales process.
I started reading the book Seizing the White Space: Business Model Innovation for Growth and Renewal. I found the title interesting because I often advise executives to “seek the white space.”
Mark Johnson provides one of the simplest and powerful descriptions of what a business model is, how to understand it and how to affect it. Looking briefly at the four elements from the four box business model, they are:
Customer Value Proposition (CVP) – An offering that helps customers more effectively, reliably, conveniently, or affordably solve an important problem (or satisfy a job-to-be-done) at a given price.
Profit Formula – The economic blueprint that defines how the company will create value for itself and its shareholders. It specifies the assets and fixed cost structure, as well as the margins and velocity required to cover them.
Key Resources – The unique people, technology, products, facilities, equipment, funding, and brand required to deliver the value proposition to customers.
Key Processes – The means by which a company delivers on the customer value proposition in a sustainable, repeatable, scalable, and manageable way.
Understanding your customer/prospect’s business model is critical – I repeat CRITICAL – to becoming indispensable. If you don’t understand you cannot make The Shift to selling results, and you’ll find your company, your offerings and your sales efforts increasingly marginalized.
When you do understand their business model you can begin to answer important questions like:
- Which boxes do we impact?
- How do we impact them?
- How will our customers business model improve as a result of our impact?
- What is that worth?
With those answers in place, you’re customers will be far more interested in talking with you and far more open to sharing their needs with you.
A Letter From Your Customer
Jill Konrath just released her newest book SNAP Selling: Speed Up Sales and Win More Business with Today’s Frazzled Customers. Jill was kind enough to provide me with an advance copy and I’ve just finished reading the book and it is one of the few books that clearly gets and addresses the issues of dealing with buyers in today’s Drought.
I’ll share a fuller review next month when my SmartCEO column comes out. In the mean time, Jill has given me permission to share a portion of the book. She shares a “letter from your customer,” that simply nails the psychology of buyers today.
Read it below – then digest it.
Dear Seller,
I have only a few minutes, but I understand you’re interested in selling me something. As far as I’m concerned, that’s pretty self-serving.
The truth is, you have no idea what my life is like. You may think you do, but you don’t – and you need to if you’re going to get my business.
I got to the office early this morning so I could have some uninterrupted time to work on a project –something I can’t seem to squeeze into the normal business day.
By 9:00 a.m., all my good intentions were dashed when my boss asked me to drop everything in order to put together a head-count reduction plan. Revenue slumped last quarter, and we need to cut costs.
Then Engineering informed me that our new product won’t be available for the upcoming trade show. Sales will go ballistic when they hear this. That’s the last thing I need to have happen.
Get the picture? Welcome to my world of everyday chaos, where as hard as I try to make progress, I keep slipping further behind. Right now I have at least 59 hours of work piled on my desk. I have no idea when I’ll get it all done.
Did I mention email? I get over 150 each day. Then, add to that at least 30 phone calls from sellers just like you who’d “love to meet with me.”
In short, I have way to much to do, ever-increasing expectations, impossible deadlines, and constant interruptions from people wanting my attention.
Time is my most precious commodity, and I protect it at all costs. I live with the status quo as long as I can – even if I’m not happy with it. Why? Because change creates more work and eats up my time.
Which gets us back to you. In your well-intentioned but misguided attempts to turn me into a customer, you fail woefully to capture and keep my attention. Let me be blunt: I don’t care about your product, service or solution.
I quickly scan your e-mails and letters looking for any self-promotional talk that glorifies your offering or your company. The minute it jumps out at me, you’re gone. Zapped from my in-box or tossed into the trashcan. Say it in your voice mail message and I delete you immediately. Delete, delete, delete.
When you spend an entire meeting blathering about your unique methodologies, great technology or extraordinary service, my mind wanders to important tasks that need to get done. Sure, I even occasionally check my Blackberry for messages while you’re speaking. But you would too if you were in my position.
I’m not always like this. Occasionally a savvy seller captures my attention, entices me to meet with them, shows me why I should change, and then makes it easy for me to work with them.
What are they doing? They’re completely focused on my business and the impact they can have on it. That’s what I care about – not their pitch.
If you focus on helping me achieve my objectives, I’ll listen to you all day long. But you can’t rope me in with the good stuff, then slip back into that trash talk. If so, you’re gonzo.
Make sense? I hope so, because I’m late for a meeting, and while I’ve been writing this, the phone’s been ringing off the hook.
Best regards,
Your Customer
Excerpted from SNAP SELLING: SPEED UP SALES AND WIN MORE BUSINESS WITH TODAY”S FRAZZLED CUTOMERS by Jill Konrath by arrangement with Portfolio, a member of Penguin Group (USA), Inc., Copyright (c) Jill Konrath, 2010What implications does this have on your business and sales efforts?
Getting Past Awkward
Interlock the fingers of your two hands together. Look down to see which fingers are on top – your right or your left.
Now switch them, so if you if the pattern of your thumb and fingers is left, right, left, right, etc. you change to right, left, right, left, etc. Keep them like this for at least 30 seconds.
How did if feel? My bet is it felt pretty awkward, initially but the longer your fingers were in the new position the more normal it felt. If you practiced this exercise a couple of times you’d be able to go with either configuration without a thought.
This is a typical exercise used to demonstrate that change, initially, feels out of place, and relatively quickly becomes normal.
I write a lot about focusing on the results your customers desire and on asking the difficult questions that provoke the awareness of gaps in performance that you may be able to fill. Recently I was sharing this approach – what we call Diagnostic Protocol – with a client.
The CEO shared with me that while he thought the questions we were developing were excellent, asking them in conversation felt quite awkward – even to him. His feeling is quite normal, and it’s the reason that many sales teams fully capable of becoming Demand Creators fail to do so and remain Commoditizers or Peddlers.
There are two types of questions you can ask in a sales interaction:
- Questions that your customer/prospect readily knows the answer to – these questions are designed to educate the salesperson and as such create no value whatsoever in the sales process and position you as a Peddler.
- Questions that force your customer/prospect to think and consider because they don’t know the answer – these questions are designed to educate the customer/prospect (as well as the salesperson) and as such are the only types of questions that can create any value and separate your from the Peddlers and Commoditizers.
The challenge with this second type of question is:
- They can make the customer uncomfortable
- They require the salesperson to be more prepared
- They’re different than typical questions most salespeople ask, so it can feel awkward
However, just like changes to which hand is on top, the more frequently you ask these types of questions the more comfortable and valuable you will be.
Promise, Pitch & Pray
Increasingly over the last twenty years “Promise, Pitch & Pray,” has become the battle cry of the sales profession. And, while I’ve never embraced that approach, in all honesty that’s probably all you needed to do to be successful in sales five to ten years ago.
For most of the last 20 years, you only needed to do three things well to succeed in sales:
- Make a strong clear promise
- Present the promise well
- Be likeable
However, as the complexity and pressures of business have increased the demands on salespeople have ratcheted up exponentially. In an “copy-cat” markets, where buyers don’t fully understand their problems making a promise is not enough.
To be successful today, you must – MUST – become a resource for your customers and prospects. You must position yourself in a way that allows you to enter “sales” conversations before there is anything to buy.
In a world where every competitor makes a strong promise, merely promising is not enough. To succeed today and in the future, the only difference that matters lies in now you to go-to-market and how you sell. Invest in the capabilities of your salespeople to run them into “businesspeople who sell,” and you will build the unfair competitive advantage you need.
The Only Research That Works
I got an email today from a marketing consultant cautioning everyone to be careful not use customer satisfaction surveys when double blind market research is more appropriate. The consultant warns, in surveys “customers often rate everything as important.”
While I certainly agree with the assessment of how surveys provide less than reliable data, I couldn’t resist commenting on the idea that double blind studies “make the information you get more actionable.”
Maybe if your Proctor and Gamble, Microsoft or Coca-Cola market research may really matter (though it’s interesting that even Proctor and Gamble the father of modern market research has turned away from traditional research).
However, if you’re a small or mid-sized business, and you feel you need to do formal market research then you should be treated as the commodity that you are. The problem with market research is that it creates a feeling of certainty where there is none.
There is only one type of research you should consider doing: spending time with customers, learning absolutely everything you can about them. Watch what they do, listen to their goals, what’s frustrating them, etc. What are they saying, and more importantly, what aren’t they saying. Understand them better than they understand themselves.
Then take that knowledge, connect to your expertise and you’ll have actionable research that actually drives sales and margins.
Managing Ambiguity In Sales
Wouldn’t it be nice if we could go into a sales situation clearly knowing who is going to make the decision and how they’re going to make it. Even better, what if we could come up with that perfect question that elicits the ideal response that positions us for the proverbial “layup.”
Okay, now WAKE UP!
Selling can best be characterized as living life in the “ambiguity zone.” When I’m asked about the attributes that enable a salesperson to excel in today’s world I liken it to the life of an investigative reporter. I think you’ll agree that their lives have an awful lot in common:
- They never have all of the information needed.
- No one tells the truth, partially because no one knows the truth.
- They’re always – ALWAYS – one question away from “the truth.”
- The ability to listen and ask great questions based upon what they are hearing and what they aren’t hearing is critical.
- They often make the people they are dealing with uncomfortable with their probing questions, but despite that they have an innate ability to get people to like and trust them.
- They spend their days taking all of the information they have and use that information to put together puzzles.
- A natural danger of their job is they may begin chasing the wrong scent, so to become successful they learn how to switch gears and directions instantaneously.
I could go on, but I think you get the point.
It’s the nature of the world we live in today. To be successful salespeople (and selling organizations) need to develop the abilities that enable them to create certainty and act with certainty in inherently ambiguous situations.
The Shift: What Do You Sell
I have a simple question for you: What do you sell? But wait. Before you answer it, realize that your underlying rationale will determine just how much you sell and how profitable your sales are.
Last year I asked if you were a pest, a peddler or a Demand Creator. That post generated a lot of conversation. Over the last six months I’ve had the opportunity to observe many people trying to make the transition from a peddler to a Demand Creator. I’ve learned that there are some distinct shifts that are made by those who manage this transformation successfully, that those who fail don’t make.
The Starting Point
Virtually every salesperson starts with a focus on their “stuff.” While many salespeople (and selling organizations) think they’re focused on their customer’s issues, the reality is that more than 80% never get beyond a focus on their products and services.
The First Shift
The first shift is to understanding and believing that your “stuff” is actually really different. The focus of the sales conversation moves away from the commodity towards the total value that is being offered.
The Second Shift
Next, as you become more comfortable that you are, in fact, different, the realization that that difference really matters to sets in. That when “stuff,” even “differentiated stuff” stops mattering to the person selling. You realize that you don’t sell stuff, you sell a unique advantage. The focus of the sales conversation moves away from the commodity and the company to the advantage the customer is striving for and the obstacles to achieving the desired advantage. It is in the second shift where right side value begins taking center stage.
The Third Shift
The next shift occurs when the salesperson or selling organization realizes that the advantage they create through their products, services, experience and wisdom is actually a conduit to the critical results their customers are striving for. This is when the focus on selling ends and helping begins. The conversations sound much less like a sales conversation and much more like a business conversation. An outsider, eavesdropping on the sales conversation, would not be able to clearly determine just what product or service the salesperson is representing because the issues being discussed are much broader than that. The fact that you don’t sound like a salesperson is no barrier to success. It is in The Third Shift where you start seeing rewards far, far greater than the effort being exerted.
The Final Shift
The final shift occurs when you realize that no one wants to buy your “stuff,” your differences, your experience, your wisdom or your advantages. You realize that everybody, in every business, wants the same thing – results. Sure, sometimes those results are clear and defined and other times they’re ambiguous. Regardless, the desire is results and you start selling them. Your focus shifts exclusively to understanding the results your customer desires – better, faster and deeper than anyone else. You transform your sales approach from a solutions focus to a diagnostic focus. Your conversation with customers are all about results and the barriers your customers face to achieving them.
You are no longer a salesperson. You’re a business person who sells. Because of this you become the trusted resource that customers seek out. Your sales approach becomes your unbeatable, sustainable competitive advantage. You competitors become increasingly confused and frustrated; crying out, “We don’t get it! Our stuff is just as good as theirs. No, it’s better! Why do we keep losing business to them when they charge high prices?!”
Making these shifts is not easy. Each shift requires a new way of thinking, new approaches and new skills. The shifts feel risky because they require you to leave your comfort zone and potentially struggle with the new skills. The rewards for making the shift, however, are outrageous. You’ll feel good about what you sell, how you sell and you’ll sell far more and make far more money than ever before.
The Obvious Problems
The key to creating demand, as I’ve written often, is to solve the problems that people don’t know they have. I’ve come to realize that many people mistakenly believe that that means solving problems so far beneath the surface that it would take the proverbial team of archeologists to uncover.
Certainly there are times when that type of expertise may be needed. Far more often, however, the problems “that people don’t know they have,” are the ones staring them in the face. They’re the obvious problems; and it’s your outsider’s viewpoint combined with your expertise that is able to highlight and solve them. More than 80% of the time, this is what creating demand is all about.
I was struck, this weekend, by Dyson’s new commercial (I’ve embedded a slightly older one below) where James Dyson explains the evolution of his vacuum cleaners and closes by stating Dyson’s mission: To solve the obvious problems others ignore. Now that sounds like the basis for a sustainably profitable and fast-growth business.
Getting What You’re Worth
It occurred to me yesterday that I’ve been writing a lot about the dangers of letting price competition damage your positioning and your margins, but I haven’t written much about the mechanics of protecting, and even raising, your prices in markets like we’re in. So, today I’m going to share with you a specific example of how to enhance your margins.
First, you need to understand that you there are only two sales conversations you can be in:
- The What’s It Cost Conversation or
- The What’s It Worth Conversation
If you’re not sure which conversation you’re having then you’re having The What’s It Cost Conversation. In my experience, 95% of sales conversations are in the “what’s it cost” category.
When your sales process is focused on your solution, it is difficult to impossible to escape “what’s it cost.” The reason for this is:
- The focus quickly goes to product/service features, attributes and benefits; which naturally connect to costs.
- This focus naturally sets you up to be compared to other “solutions.”
- Further, because the focus is solutions oriented instead of diagnostically oriented, you must deal with a misunderstood or not fully understood problem. This often makes the comparison unfair, and further commoditizes you.
- When this happens you fall into the deadly specs/price trap. Think about what you want when you’re searching for solutions. We all want the solution that is good enough at the lowest price possible
It is far more effective, and profitable, to get into the “what’s it worth” conversation. To do this you must change the focus of your efforts from a solutions focus to digging deeper on problems. As you begin to probe the problem and dig deeper you can begin to monetize the value of your solution. In essence, I’m asking you to begin pricing the problem — not the solution.
Let me share a real life example to illustrate my point. At Imagine, we solve sales problems. We could easily be compared to a variety of training “solutions,” but a) what we do isn’t really training, and b) that would badly commoditize us.
Instead we help our prospects and clients first understand their problem and understand the cost of the problem. In our business, like many of yours, we face a challenge that the difference between our approach and our competitors is not huge. We’re all saying many of the same things. These little differences, however, are huge when in comes to the results companies can enjoy.
So, to gain the price advantage that our results create, we must enable our clients to uncover just what the value difference is. That’s precisely what “pricing problems” and monetizing value does. Here’s how we do it:
Baseline Scenario
Let’s say that your sales team produces the following:
- They average 40 proposals
- They average a 40% close rate
- So they’re closing 16 new opportunities on average
- The average sale was $30,000
- Average gross margin of 22%
This means that each salesperson is producing (on average) $480,000 in sales and $105,000 in gross profit.
The Little Difference
Let’s say that as a result of working with us you improve your results by just 5%. Now keep in mind, that a 5% difference is virtually imperceptible. But, this virtually imperceptible difference can lead to extraordinarily valuable results this 5% difference means:
- Instead of 40 proposals you average 42
- Instead of a a 40% close rate, you average 42%
- Instead of average $30,000 per sale, you average $31,500
- Your margins would go from 22% to 26%
- Total sales would be $555,000, up from $480,000
- Most powerfully, your gross profit you go from $105,000 to more than $142,000 – a 35% difference.
Now, if you maintained this performance improvement you’d grow faster. So instead of growing at say 10% per year you’d grow 12.5% per year. That difference over a 10 year period of time would result in an increased gross profit of just under $1 million.
I ask you, what would that be worth?
With the problem fully understood and, more importantly, the cost of the problem clear; the proper context has been created to enable you to effectively discuss the appropriate solution (yours) and to have the solution properly valued.
My be is that your business and your approach creates such value for your customers/clients. However, if you don’t build out your business case to enable customers to understand the value of your difference, it can’t be valued and your profits will suffer as a result.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
