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.

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.

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.

Imagine selling word processors, when the IBM Selectric typewriter with self correcting tape was considered cutting edge technology.  Think about the challenges you’d have as a salesperson:

1. You couldn’t focus on “your solution” because no one knew they had a “word processor problem.”
2. You couldn’t rely on explaining your features and benefits because no one would understand them.
3. There’d be no word of mouth, because no one was really using them.
4. You’d have no case studies, because it has little to no history.

I could go on.  Let’s just agree that it would be very difficult.

So, what would you do?

Here’s how I’d handle it:

1. I’d get real clear on the critical business result I would focus on.  In the case of word processing I’d choose between productivity and costs.  Here I would focus on costs over productivity as the primary result, putting productivity very much in the background.  The reason for this is that productivity focuses on gains, while costs focus on loss avoidance.  When asking people to change, loss avoidance is far more powerful than gain.
2. Next I would decide what a good sale is.  Do I one to sell one software package at a time, do I want to sell several, do I want to sell in bulk, etc.?  In my case, I’ve always been a fan of leverage so I would focus on selling hundreds of licenses at a time.
3. Then I’d focus in on what types of organizations are incurring costs that I could impact in a big way.
4. As I brainstormed the list I’d be looking for a sweet spot.  Who are the people that absolutely need what I do and have the ability to buy at the level I want.  It’s important that I focus not only on the types of companies that I want to sell to, but who inside those companies do I want to connect with.  I want to connect with the people who have the power to cause change and displace the status quo.
5. Once I’ve settled on the key customer types that I want to focus on and who I want to connect with, my job becomes immersing myself in their world and understanding them better than they understand themselves.
6. Now my job is to sell.

Tune into my next post to learn the specifics of what I’d do.

With increased frequency I’m getting requests from owners, CEOs and VP’s asking for recommendations for a recruiter who can “find ‘good’ salespeople.”

What’s unfortunate about these requests is that even if these companies do find good salespeople (a difficult task in and of itself) there’s still only about a 10% chance that the salesperson will be successful. A study reported in Harvard Business Review revealed that only 1 in 250 salespeople actually exceed their targets.

It does not take a genius to realize that a 99.6% failure rate is not a people problem. It’s a system problem.

The traditional selling system is broken.

There are two fundamental problems with traditional selling.

• First, as I have written extensively, traditional selling is solutions focused and commoditizes the selling organization.
• Second, traditional selling (as it is implemented in 95% of small and mid-market B2B companies) puts way, way, way too much of the client acquisition burden on the salesperson. In today’s complex, fast-paced, ultra-competitive world there is simply too much pressure on the capabilities of an individual to succeed. As a result, the rate of commoditization, and failure, increases.

Great salespeople, and great selling organizations, are the result of excellent systems. IBM created the greatest selling force of all-time, not by hiring great salespeople, but by plugging normal people into a superior system.

There are four parts to every effective selling system:

1. Solid positioning. A successful sale begins long before a salesperson arrives – it begins with effective positioning. Do you have a clear, powerful message? Is your value proposition understood, and valued? Are you clear on who your core customers are? Is your pricing strategy clear?
2. Outreach. Great selling organizations are very focused in their go-to-market approach, while average ones are tactically opportunistic. Are you earning and capturing the attention and awareness of your best few markets? Do your salespeople know precisely who to focus on and what the resonating issues are? Does your marketing efforts clearly support your sales efforts?
3. Cultivation. The buying process is far, far longer than the selling process, beginning even before the potential customer knows that they are looking to buy anything. It is triggered when the customer starts to investigate their issues and uncover their problems. This is where the fundamental flaw of traditional selling rests – and 95% of small and mid-market B2B companies completely skip this step. If you’re not optimizing this step of the system, your results could be negatively impact by as much as 75%. Are you regularly creating content that educates your customers and causes the sale?
4. The Sales Process. The fourth – and final – part of an effective selling system is the sales process. An effective sales process ensures consistency, repeatability and effectiveness. It unleashes the power and capability of good salespeople, making them great. And it makes great salespeople stars.

To win in the competitive world that we find ourselves, you can no longer rely on hiring good people alone.  You must match good people with effective systems.

As much as I would like to tell you about a short cut to resonating with your customers and Creating Demand, there are none.  That’s the bad news.  The good news is that the process is rather simple.  The approach can best be summed up as:  Deeply understand your customer’s business (and life).

The First Unbreakable Rule To Creating Demand is: Know and understand your customers better than they understand themselves.

You need to know:

• What drives their profits? And as a subset of that, what drives their revenue and costs?
• What are their key processes and how do those processes drive their profit formula?
• What are their key resources and how do those resources support their key processes?
• What is their customer value proposition and how do they deliver it?

When you understand these four areas you can begin answering these questions:

• What problems exist in their model that they aren’t aware of?
• Where are unnecessary choke points?
• How can they run their model more efficiently?  More effectively?
• What opportunities could they capture with your approach?

These four questions are the basis of your business case.  When your case is clear, you can provoke awareness and manage the sales process effectively.  If you do not understand this and you attempt to move the sales process forward – it’s a good bet that you’ll find yourself in The Commoditization Trap.

“People don’t buy what you do, they buy why you do it.” – Simon Sinek

These of some of the wisest words I’ve heard in years.

Many of you may already be familiar with this video.  For those that are not, I promise that watching this will be 18 of the best minutes you’ve spent on your business.

Sinek does a masterful job of sharing why companies are being commoditized (without every using the word commoditization).  He shares the remarkably simple secret of success for companies like Apple, Starbucks and Southwest; as well as the Wright brothers, and, even, Martin Luther King, Jr.  He also shares why TiVo has never been a commercial success.

Please watch this 18-minute video (I promise it’s worth it), then answer the question below:

Why do you do what you do?

I’ve been spending a lot of time working with clients to build out diagnostic systems to create value and create demand.  I recently referred one of my clients to a blog post I wrote almost 5 years ago.  I thought it was valuable enough to share again.

My experience working with fast-growth companies has taught me that there are three levels of value that a company can provide:

• Level one occurs when you provide people with the knowledge of ‘what’ needs to be done.
• Level two occurs when you provide the knowledge of ‘how’ to do it.
• Level three (execution) occurs when whatever needs to get done actually gets done.

Level one is all about diagnosis. Today, too many companies hold back level one value, fearing that if prospects know what needs to be done, they’ll go out an try to do it themselves or to do it cheaper. The reverse is actually true. Give the ‘what’ away. The more people know what to do, the more value your company’s knowledge of ‘how’ to do it becomes.

When prospects don’t know the ‘what’, they self diagnose; and when that happens, you are, and should be, just a commodity. So, stop “protecting’ your intellectual capital so fiercely. Start giving it away and fast growth is yours.

Traditional selling techniques are no longer effective in the twenty-first century. A study conducted by Harvard Business Review revealed that only 1 in 250 salespeople actually creates positive economic impact for their companies, and less than 37% of salespeople meet a profile deemed to be “effective.”  It is time to end the traditional approach to sales, where most salespeople are considered pests or peddlers and transform that approach so that salespeople are perceived as the valuable assets they can be.

Through 20 years of research, I have learned that the problem is a systems problem, not a people problem. To drive profitable growth, companies must adopt new systems, develop new skills and apply new disciplines to be effective.  The good news is that companies that make this transformation gain disproportionate rewards – often 5 to 10 times average rates of return.

The fundamental problem with traditional selling is that it structurally places the focus on the commodity value.  If your goal is differentiation and earning margin premiums, then you must work against traditional selling tactics.  For six years, the focus of this blog has been to support the development of a better approach to selling.  Consider this post a 30,000 foot review of six years of content (with the links to previous posts to support it).

Here’s the problem with traditional selling:

• It is solution-focused.  When you begin with the focus on the solution, you are focused on the commodity portion of your proposition.  As I’ve written before: solutions are worthless – until there is a problem.
• It views your difference as a “value-add,” rather than as core to your proposition (think IBM pre-1995).
• The playing field is defined by your competition, and the focus is “winning the business.”  This make the process far more adversarial than it should be.  From a customer perspective it makes it a hodgepodge of “sameness.”
• Because it’s solution-based, the go-to-market focus is broad; too broad. The approach is based upon “who can use the solution,” rather than on where the selling organization can be best.
• The sales and marketing approach are silo’d within the selling organization – leading to misalignment, confusion and brand degradation.

A new, far more effective model of selling flips these issues on their head.  The focus is on creating value throughout the entire sales/marketing process.  Rather than merely fulfilling demand (which is akin to being a pigeon trying to compete for a piece of bread) the focus is on creating demand – what I call Demand Creation Selling.

• It focuses on critical results – and the barriers that prevent those results – rather than on solutions.  It focuses on the problem, and enabling the customers/prospects to better understand their problems and the causes and consequences of those problems.
• Rather than viewing your difference as the “value-add,” it focuses on your difference, your business’ intelligence if you will, as the core of your offering.  I refer to it as making The Shift from selling stuff to selling your ability to create results.
• The focus is on creating demand (and markets), and as such, you eliminate competition and you own markets, rather than compete.
• You focus and allocate your resources where you can be the best, and you ignore areas where you’re a “me-too” company.
• Instead of focusing on the solution, Demand Creation Selling means that you manically focus on understanding customers – better than the customers understand themselves.
• Sales and marketing are fully integrated, and the company goes-to-market in a clear and powerful manner.  There is no need to differentiate, because you are different.
• Expertise is defined by how well, and how deeply, you understand your customers and their issues, rather than how well you know and understand your solution.

Growth is tough enough as it is.  Businesses can no longer rely on systems and approaches that work against them.  The time has come to change the way you sell – and the rewards await.

The 1989 movie Field of Dreams is, in fact, the daydream of every marketer.  The line made famous in the movie, “If you build it, he will come,” embodies the desire of every marketing organization since the beginning of time.

Of course, marketing has never been that easy.  John Wannamaker, a famous retailer, said, “I know I’m wasting 50% of my marketing budget, my problem is that I don’t know which 50%.”  My own experience indicates that not only are most companies wasting 50% of their budgets, but also the 50% that is not wasted is only getting about ½ of the results it should be.

The fact of the matter is that marketing – traditional marketing, at least – is broken.  Just like traditional selling, it is built on an ineffective, highly inefficient foundation.  This means that improving your marketing efforts isn’t going to do you any good.  Quite the contrary, merely throwing more to this inefficient system is going to further thrust your company into the black hole of The Commoditization Trap.

There are two critical flaws with traditional marketing:

• It is a broadcasting mechanism, and
• It only communicates value and typically fails to create any.

Broadcasting

It’s trite and it’s true.  When there were only three channels and virtually no other way to communicate, broadcasting worked.  Today, broadcasting is highly ineffective.

Picture yourself in Times Square in New York City.  How difficult would it be to get the attention of people there?  How loud would you have to yell?  It would be virtually impossible (before you protest, the Naked Cowboy is the exception that proves my point).

You need to understand that today we all compete in Times Square.  Here are some scary statistics for you:

• The typical person is exposed to 3,000 commercial messages a day, yet the human brain is incapable of processing more than 100 per day.
• In the last 5 years, the number of pages indexed by Google has expanded by more 360 times.
• In 1986, America had more high schools than shopping centers.  Today shopping centers outnumber high schools by two to one.  Plus the stores are three times denser than in 1986 – and that doesn’t even account for “online shopping centers.”

This means that there are a lot of people shouting and if all you’re doing is broadcasting (shouting) with a static website, advertising, direct mail or whatever, the likelihood of getting through and driving real results is highly unlikely.  Whatever results you do create will be swept away by the costs of getting and maintaining your presence.

Value Communication

Before the age of the Internet, people relied on traditional advertising and marketing as a means to know what was going on, what was available and how much stuff cost.  Today, people are building bigger barricades to keep advertisers and broadcasters out.

With all of the noise in the world today, the only effective approach to marketing now is to earn people’s attention.  And, in case you didn’t know this, your customers and prospects don’t really care about you, your products, or even your goings on.

What they care about is themselves.  They care about their lives and they’re constantly looking for ways to make it better.  Contribute to that – before they have to buy from you or even give you their name – and they’ll give you their attention.

The Good News

The marketing tools available to businesses today make it relatively easy to overcome the barriers of traditional marketing and to transform your broadcasting approach into a finely tuned, pull marketing system.  Today, if you follow the new rules: if you build it – they will come.

Even better, where traditional marketing approaches favored large, high capitalized business, today size is at worst a neutral factor; and in my experience the new world of marketing plays to the strengths of small and mid-market companies willing to work at it.

There are three simple rules you must follow:

1. Create value by providing useful information and knowledge that will help your customers and prospects.
2. Give it away and give up control.  That’s right – give it away.  Don’t ask for money, don’t ask for commitment, and don’t even ask for an email address.  First give, then over time you will receive.
3. Consistently engage.  This is not an overnight success strategy; you must “be there.”

If you follow these three simple rules, you’ll be able to build an enormously valuable marketing asset and you’ll be able to eliminate marketing expenses.