Subscribe
Subscribe via Social
What Game Do You Want To Win?
I had a great conversation with one of my favorite clients last week that I wanted to share with all of you. I had just completed our Demand Creation Selling Bootcamp and as we were debriefing, the CEO asked me: “Doug, how precise do we have to be to be successful?”
My response was, “Well, it depends on what game you want to play and how you define winning.
“If you want to win the member-guest tournament, that requires one level of precision. Want to win on the Nationwide Tour, well that requires another level. Want to win a PGA Tour event, a major, several majors?”
He got the point. When we shared this conversation with his sales team, I asked them, “At what level do you want to play? At what level do you want to win? Are you working that hard at mastering your craft?”
So, I ask you:
- At what level do you want to play?
- At what level do you wan to win?
- Do you believe you can play and win at that level?
- How hard are you working at it?
Growth Barrier 2: Focus On Margin Growth
In my first Growth Barriers post, I discussed how your competition is irrelevant and how to tell if you’ve bypassed your competition. Today, I’m going to address Growth Barrier 2:
Our growth rate is accelerating and our profit per sale is increasing
I often caution selling organizations: just because the fish are jumping in your boat, doesn’t mean that you’re an expert fisherman. For most of the last 20 years, demand was growing so fast that businesses could fool themselves into thinking they were smart, even when they were doing dumb things (pointing out another word of advice: Never confuse brains with a bull market).
While economic and market conditions determine the fate of the vast majority of companies, there are always a few that are able to grow – and grow profitably – in virtually any market condition. The critical commonality of these companies is maniacal ability to focus, and stay focused, on their core business; rather than being distracted by what seems to be low hanging fruit.
These companies know where they can be indispensable, and they allocate disproportionate resources to growing in those areas. Because of this focus they are able to move beyond price as three powerful things occur:
- They get more for their products and services,
- It costs them less to sell their products and services,
- They grow faster while enhancing their margins.
Now rate yourself on a scale of 1 – 10, where 1 would mean there is tremendous negative pressure on both your revenue and your margins, and 10 would indicate significant strength in this area. With your rating clear, start brainstorming with your team things you can do to better focus on the areas where you can grow both revenue and margins.
I’d love it if you shared some of your thoughts in the comments.
Growth Barrier 1: Bypassing Your Competition
Several years ago, I created a tool to identify how well a company is positioned to successfully identify, capture, manage, and absorb profitable growth opportunities. I called this tool The Growth Barriers Diagnostic™ (you can take the diagnostic here if you’d like).
While the tool was created a few years before the “great recession,” it’s been equally effective in diagnosing growth barriers since. Last week, I had a deep conversation about the content of the diagnostic and what it means with a fellow CEO. I hadn’t discussed the diagnostic is such depth since it was created, and it reminded just how valuable the tool is.
I wanted to share some of the observations from my conversation, so today I begin a series posts that will focus on each of the 10 points in the diagnostic. Today’s focus:
I have bypassed my competition
One of the biggest flaws of modern day sales and marketing is that it causes business executives to view the world from a competitive perspective. I’ve always felt that great businesses (and going forward “great” is no longer a choice) became great because they ignore their competition. They use the energy that others lock up studying the competition to understand their best markets better than anyone.
If you think of companies like Apple, Starbucks (in its great days), or Cirque Du Soliel, you quickly realize they wouldn’t exist if they had focused on “differentiating their offerings” rather than delighting their best customers.
Two weeks ago, I wrote about The Shift sellers need to make to avoid being commoditized. The final shift occurs when sellers realize they sell results, and further they position their offerings so that customers look at it the same way.
When your customers view you and your offerings as critical to their results, you become indispensable and competition becomes irrelevant. When this occurs, you are able to enter sales cycles far earlier in the process (before competitors have a chance) and price stops being a driving factor in the purchasing decision.
As a matter of fact, you know you’ve bypassed your competition when you enter potential sales conversations before the customer fully understands what their problems are, or what solutions they desire. The customer relies on your deep understanding of them, their issues and your area of expertise to help them both define the problem and determine how to best solve the problem.
Now, score yourself on a scale of 1 – 10 (1 being that you are fighting the “commodity battle” virtually every time and 10 being that the scenario I’ve just described occurs 80% or more of the time). What can you do to move your score towards 10?
Is The Focus At Your Company Internal Or External?
I’ve written, ad nauseam, that if companies want to be successful in today’s “Wisdom Age,” they can’t afford to be internally focused – they must be focused fanatically on their customers. This thought isn’t new. Experts such as Seth Godin, Tom Peters, Jack Welch, and Clayton Christenson (to name a few) have been preaching this gospel for quite some time.
In my consulting work, I’ve learned that while there is nearly universal agreement that this customer-centered approach is a great idea, most companies don’t really get it. Far too many of them only pay lip service to focusing on their customers. They’ll start trying out a lot of customer-focused language, but in the end, they still cling to the kind of industrial-age thinking that puts the product or service (with all its wonderfully complex features and benefits) at the center of their universe.
Here is a simple question you can ask to determine whether you are internally or externally focused:
Does my company spend more time working to understand our products or working to understand the issues facing our best prospects?
If you spend more time training your salespeople on how to sell your offering than you do educating them on the business issues and challenges your prospects face, you are an internally focused organization. It will only be a matter of time before commoditization erodes your profit margins (if it hasn’t happened already).
In far too many instances, salespeople and executives are stumped when I ask them to tell me which critical business issues they impact. In my work with salespeople, I spend 75% of my time helping them understand the issues their prospects really care about.
What else can you do if you find yourself with an internal focus when what you want is an external one? Try this: At your next four sales meetings don’t spend any time talking about product/offering issues. Instead, have your salespeople interview their five best clients beforehand to find out the challenges they are facing (whether those challenges have anything to do with your offering or not). Discuss the results of those interviews at the meetings.
Bottom line, if you want your sales and marketing efforts to stimulate business, then your sales and marketing people must understand the issues that keep your prospects awake at night. By the way, the definition of “understand” is: “To know thoroughly by close contact or long experience with.” If you want to really be customer-focused, anything less than that won’t work.
Commoditization – The Enemy of Fast-Growth
“A commodity is any good, service, or process that can be produced by any number of firms, and the only distinguishing feature between these firms is who can do it cheapest. Having your product or service turned into a commodity is no fun, because it means your profit margins will become razor thin, you will have dozens of competitors, and all you can do is every day make that product or service cheaper and sell more of it than the next guy, or die” — Thomas L. Friedman, The Lexus and The Olive Tree
————–
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 where 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.
In my next postings, I will introduce a fundamental concept to avoiding or escaping commoditization. Please share your thoughts and comments with me. Just e-mail me at doug@ImagineLLC.com.
-
Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
