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.
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.
I’ve written about the curse of knowledge before. An important sales implication of the curse is that selling organizations become increasingly committed to the belief that it’s the expertise and knowledge about the solution that separate competitors in buyers’ eyes.
There are two important points that contradict that belief:
Your customers are nowhere near as educated as we’d like to believe they are about their problems, so it’s virtually impossible that they’ll be able to:
- Truly understand your expertise and solutions, and
- Effectively compare the difference – and the value of that difference – between you and your competitors.
- When you’re focused on your expertise or solution you must overcome 2 huge barriers:
- You’re in a what’s it cost conversation, and
- Your competitors have expertise and solutions as well, and they’re probably pretty good too.
As a small, mid-market business, if your goal is to separate yourself from your competition, drive accelerated growth and expand your margins, you cannot do so by focusing on or attempting to differentiate your solutions.
You must – MUST – contribute to defining the problem.
Ask yourself these 3 questions to determine if your sales efforts are setting you apart and making growth effortless:
- How much time do I, or my salespeople, spend talking about our solution vs. digging deeper into the real problem facing my customer?
- In my sales calls with my prospects and customers, how much do they learn about their problem vs. learn about my solution? As a general rule, you want them to learn 3x more about what’s preventing them from achieving their desired objectives than about how your solution will help.
- How much documentation do we use to highlight and quantify the cause and cost of the problem? (Feel free to check out our Core Sales Toolkit if you’re looking for some tools.)
Having witnessed thousands of sales calls, and advised thousands of more, I can state – unequivocally – that the single biggest, most common and most damaging mistake is that selling organizations spend too little time defining the problem, and jump to the solution way too fast.
As I shared in my post last Monday: Stop Selling! If you’re selling you’re doing something wrong.
Whenever I share this insight, it’s always greeted with agreement…and frustration. People shrug their shoulders and ask, “I get that I shouldn’t do this, but what should I do?”
Solving The Seller’s Paradox requires that you fully and completely leave the world of the peddler. You must let go of your products and services, your features and benefits and engage – truly engage – with your prospects/customers. You must embrace a diagnostic approach.
The basis of this approach is rooted with what I call The Three Sale Mindset™. A successful sale is really the culmination of three distinct “sales.” They are:
- Agreement defining the problem.
- Agreement defining the best solution.
- Agreement defining the best provider.
The problem with traditional sales (and with about 95% of salespeople) is that they’re completely programmed and focused on making sale three, and as a result skip steps, assume and commoditize.
Diagnosis is all about focusing on the first sale, and realizing that you don’t really have a prospect until you have clearly and mutually agreed on what the problem is, the impact of the problem as well as its priority.
There are three distinct decisions that must be reached in The First Sale™:
- I (the prospect/customer) have a problem.
- A clear definition/description as to what the problem is and the underlying cause.
- Determination that the status quo is no longer viable, and that change must occur.
It is critical to understand that The First Sale has not been made until all three points have been met. It is not at all unusual (actually, it’s the norm) that salespeople move forward when only the first and third points are being communicated.
When a prospect/customer reaches out to you claiming to acknowledge a problem and desiring a solution, if you assume that they either a) understand what their problem really is, or b) are truly committed to solving the problem once they learn everything that is involved you are moving into false positive territory – and you’re peddling!
When you slow it down and spend the necessary time to ensure that all three points are covered, you’ll find you move beyond competition and begin to get treated like the trusted resource your should be. Focus on The First Sale, and you’ll see the next two move through faster than ever.
When I conduct sales training for executives and sales teams, I typically finish with the valuable thought:
“Stop Selling! If you feel like you’re selling, you’re doing something wrong.”
I call it The Seller’s Paradox.
- The more your focus is on your products, services, or (dare I say) your solutions , the less likely you’ll be valued or make a sale.
- The faster you try to get to the proposal/recommendation stage in your sales process, the longer and less likely you’ll be to make a sale.
- The harder you work to prove your worth, the less likely it is you’ll be valued.
When you’re selling (or building a go-to-market strategy) you must – must – put thoughts about yourself or your interests aside. This is the entire point of what Demand Creation Selling is all about. Traditional selling is built on a very weak foundation. Your active sales time allocation looks something like this:
- The first 20% of your time is spent on qualification, which is really a one-way check-in for the salesperson to determine if they prospect/customer is capable of buying. While surface attention is paid to needs assessment, it never goes deep to create value.
- The next 30% of the time is spent presenting, proposing and trying to convince your prospect/customer of your capabilities.
- And finally the real dance begins, as 50% (and sometimes more) of the time is spent chasing down the prospect/customer, attempting to overcome objections, negotiate and close the business.
If I had $10 for every time a salesperson or executive I was either coaching or managing said to me that they wish they knew something that came up in the last phase of the process earlier, I wouldn’t need an income for several years.
However, if you go against the grain and build a solid foundation, one where you spend the first half (or more) of your time digging deep and diagnosing, you’ll accelerate your sales cycle, and bypass the shop cycle 80% of the time.
Diagnosing means uncovering issues and enabling your prospect/customer to understand their situation and needs, as well as you. When taking this approach, your prospect/customer stops seeing you as a salesperson, and instead views you as a critical resource to enable them to achieve their critical objective.
When you occupy this spot in their mind, objections, hassles and delays disappear.
One of my favorite movies is Glengary Glenn Ross (based on David Mamet’s play). In it, the most down-on-his-luck salesman (played by Jack Lemmon) gets up to grab a cup of coffee. The salesman visiting to share his “motivational speech” (played by Alec Baldwin) pounces on him mercilessly, shouting, “Put that coffee down! Coffee’s for closers!”
That one line captures the essence of the sales culture, both as we have come to know it and, too frequently, how we manage it. We still think of “sales” and the star salesperson as the one who “closes the deal,” and gets to “eat what he kills.”
Getting a prospect to get across the finish line by making a decision is important. Creating the environment that enables you to stand out from your competition and influencing your prospect’s decision criteria is critical to increasing win rates and protecting margins.
If you want to enter what I like to call, what’s it worth conversations (as opposed to what’s it cost), you must first change how your prospects thinks about the issues you address. And, this occurs long before you’re in a position to close business. Studies show that if you do a good job with this provocation process, the difficulty associated with closing business virtually disappears.
Provoking effectively requires that your marketing and sales efforts work together in alignment. Your website, collateral and case studies must move beyond the typical brochure type “we-do’s” that make the same types of claims your competitors make. You marketing must engage, challenge and educate.
Your sales efforts must pick up on this teaching point-of-view and move beyond the same old open-ended questions to questions the provoke deeper thought and educates your prospects (and customers) on their business. Your sales team must become businesspeople-who-sell.
It’s not as easy as awarding a Cadillac to your top closers, but you’ll find that it’s a lot more profitable.
Walk into any bookstore, or read any sales oriented magazine and you’ll see the primary focus on strategy and skills is the ability to overcome objections. Last week, I was talking with a fellow executive that I’ve known since I began advising sales teams more than 20 years ago. I was sharing with him how the discoveries we’ve made in developing The 7 Steps to Achieving Effortless Growth have impacted the sales teams we work with.
A couple of days later, he emailed me asking how (or if) our advice has changed in terms of how salespeople overcome objections. As I shared his question with my VP, Sales & Coaching Programs, we realized that we haven’t had a conversation with a sales client about overcoming objections in years. I’ve learned that when you stop overcoming objections, selling becomes far more effortless and productivity accelerates.
It’s funny, because the ability to overcome objections used to be the peak of much of the sales training and coaching I provided. However, as the world has gotten increasingly complicated and competitive, if your customer/prospect is objecting it’s probably too late. Rather than overcoming, the key today is preventing objections.
To prevent objections, follow these five steps;
- Create a very clear Headpin Customer Profile™. When your customer focus is too broad, you have no choice but to define yourself by your product and that will increase the likelihood of objections, and the pressure on price.
- Develop a clear focus on why people should buy from you. Define the critical problems that you solve for your Headpin Customer™ better than anyone else does.
- Create a clear commercial teaching point-of-view that challenges and changes your Headpin Customers’ perspectives. Without a commercial teaching point-of-view, you can only focus on features and benefits, which increase the likelihood of objections.
- Develop a core list of resonating questions that cause your customers/prospects to learn about their objectives as much as they learn about your products/services.
- Engage. Be human and have genuine conversations. Preventing objections is more about managing communications than it is about manages sales.
The underlying system of sales is designed for failure. This is supported by the way companies manage, track and review their sales pipeline. Inadvertently, companies are making sales growth difficult, choppy and unsustainable as I discuss in my presentation The 7 Steps to Achieving Effortless Growth, I share that one of the primary reasons that is that the underlying system is designed for failure. Below are steps you can take to reduce false positives in your forcasts.
When the focus is on why people should buy, rather than on the barriers to buying, false positives (the belief that a prospect will behave positively and fails to) increases. Salespeople, who are naturally optimistic to begin with, know that as long as they can find a reason that someone should buy, there’s hope (and they can keep their sales manager off their back).
The problem with false positives is they dramatically increase the noise associated with predicting future business, and cause poor decisions made in every facet of a business. As Nate Silver shared in The Signal & The Noise (a great book that every business and sales executive should read, and that I will be reviewing on my blog later this month), false positives cost millions of dollars in lost opportunities and poor resource allocation.
Early in the sales cycle (where false positives are most prominent), a false positive rate of just 25% (which for most companies would be quite good), will cause sales management and salespeople to overestimate the likelihood of a customer closing by 4 – 8x.
While you’ll never totally eliminate false positives from your process, a good goal to set is for them not to exceed 5 – 10%. This requires a rigorous approach to pipeline management, necessitating that it be built into your sales process.
Here are the first steps to take to begin reducing false positives:
- Review all the sales opportunities that you’ve lost in the last two years and create a list of what caused you to feel confident they would buy.
- Looking at those opportunities, be completely honest with yourself and identify potential false positives. In other words, don’t rely on the excuse, “They went with a competitor who sold it for less.
- Spend more time focusing on the barriers to a sale, and praise the reps who bring honest feedback.
- Encourage reps to share their concerns about making a sale.
- Keep track of your pipeline forecasts and revisit those forecasts with reps every quarter.
- Don’t ask your reps to make a single forecast. Ask for different time periods (ie 30 days, 90 days, 6 months, etc.) and different probabilities (20% best case, 50% and 80%).
Focus on these three areas, build them into your sales system and you’ll see the sales soar.
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.
This post originally appeared on BizBeat, The Washington Business Journal’s business blog.
It’s the stuff of legend and mythology. The stories of Steve Jobs, Thomas Edison, Joe Montana and many more make the journey sound so exciting.
Over the last 25 years, I’ve learned a very important lesson about success – achieving it is boring. The benefits are great, but the process to achieving it is painful. Dealing with the boredom is the reason so few people reach their potential.
The problem is that the stories about success are dynamic and exciting. These stories make the legend and mythology of business and sports. After all, look at how much fun Steve Jobs was having as he introduced one game changer product after another. Who doesn’t want to be Derek Jeter, with the fun and the fame?
However, the truth of how they got, and stayed, there is quite different. It required the focus, discipline and commitment to work at the little things, and to do the things that few others do.
I see this every day in all facets of life. Whether I’m working with executives and entrepreneurs of growing businesses, salespeople trying to compete in today’s environment, or coaching the hitters for my college baseball team, everybody wants to skip the boring stuff and jump right to the fun stuff. I struggle with it myself.
In baseball everybody wants to get the game-winning hit, but few want to take 200 swings a day (for years) off the tee to work on the mechanics of good hitting. Every salesperson loves making the closing presentation, but few are willing to do the homework to study and practice their craft. Executives love strategizing and visioning, but few realize that driving business growth is about staying focused on the same few things, day after day after day.
Preparing for success is fun, but that once things get going the process can get boring quickly. Even worse, it gets frustrating and difficult. Nothing happens as fast as we want. Since we’re all biologically programmed to avoid pain, most people decide that “there must be a better way,” and start the process all over again.
Whenever I see this happen, I always think of the conversation I had with one of the hitters I coach. He told me that he had figured out one of the things he was doing wrong and he told me, “Coach, I think it’s really going to help. Maybe if I spend the next two weeks working on it, everything will be good.”
What was sad, is that he really felt he was being patient. Unfortunately, he still needs to learn that success is a lifetime pursuit.
Behavioral scientists have studied how people respond to winning and losing. They’ve even gone to the point of giving (spotting) people money to put them in a position where they can’t actually lose to see how they behave. Study after study consistently shows that people do far more to protect themselves from losing. Behavioral finance puts the difference at about 2x – people work twice as hard to avoid losing then they will to pursue winning. In times of distress, chaos or confusion the difference is even bigger.
This is a critical concept for anyone involved in a sales role to understand. Traditional selling teaches that you should focus on the benefits, or the value of someone doing business with you. As a result, salespeople are always focusing on what some will gain from working with them. While this creates a positive feeling, in times like these where budgets are tight, priorities are overwhelming and resources are limited it does not promote action. Often it’s quite the contrary. Selling initiatives and proposals get stuck in committee and review; or, God forbid, get sent to procurement.
Rather than fighting human nature, selling organizations need to embrace it. Salespeople need to spend less time focused on the value of doing business with them, and far, far more time on the cost of not doing business with. Stop now and ask yourself, what’s the cost – the consequence – for that prospect you’re working to close if they fail to do business with you? What happens if they buy from a competitor? What happens if they do nothing, and just maintain the status quo? What would go wrong (or fail to go right)? Why and how does that matter to them?
When the answer to those three questions are clear, you’ll know the focus for your sales approach. It’s not about the product, or even the benefits. Your job is to lead that prospect to understand the consequences.
One of the consequences of the economic downturn, and the reductions in workforce over the last several years is a greater gap between executives with the authority and the people who are responsible for implementing and overseeing solutions.
When I work with salespeople, the most common challenge they have is getting access to authority. To get the access you desire, the first, most important thing you must do is to have something worth talking about.
Here are the five steps to take to get the access you desire:
- Be very clear who you want to speak with.
- Determine the critical results this person is responsible for.
- Next, use your experience to determine the most likely problems or issues this person is having in attaining these results.
- Now to determine the consequences of not utilizing your solution.
- Develop a well-defined resonating case to share with your targeted prospect.
For example, if I’m trying to reach out to a VP, Sales to begin conversations, I’d skip the focus on my features and benefits. Instead, I’d share something like this:
Over the last 20 years, we’ve worked firsthand with more than 1,000 companies mid-market growth companies. We’ve learned that these companies are getting, at best, only 50% of the results from their sales and marketing investments they should be getting. We’re concerned that if you don’t identify the issues that are causing this problem, you’ll lose hundreds of thousands to millions in lost profit and equity value. I’d like to share our findings with you, and share some tools with you so you can ensure this doesn’t happen to you.
The key to access is knowing your customer better than they know themselves. To get a jumpstart, you can download my Understanding Your Customer Workbook.
One of the toughest lessons and most valuable lessons I learned early in my sales career was that my job was not to have the answers. I didn’t need to be able to solve the problems my prospects or customers had. My job was to get the prospect to connect to the problem, and to demonstrate that I understood what my prospect wanted to achieve.
I had a whole team of people that whose job is was to solve the problem. My primary objective was to a) get the customer to understand they had an important problem, then b) to connect the prospect with the solutions experts in my company, and c) to manage the process.
Last week I was presenting to a group of CEOs in Syracuse, NY. One of the CEOs was commented on the challenge of adopting The Five Unbreakable Rules for Creating Demand. He commented, “It’s tough understanding your customer like your describing. We’ve spent our entire careers becoming experts in what we do.”
My response to the CEO was that solutions expertise isn’t unique; to your customers and prospects it’s a commodity. While I’m not saying that a company should not have solutions experts, this type of expertise does little to create value in the sales process or separate you from competition.
Really, it’s the fundamental reason that companies create sales team. To have people whose job it is to become customer experts and to provoke awareness of problems. Put the focus there, instead of having the answers, and you’ll see your sales and profits soar.
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.
When challenging your customer, entering accounts and positioning yourself to be valued as you should, it’s important to remember this key point: It’s okay to be wrong, just make sure you have a clear take and a solid rationale to back it up.
Here are my thoughts on the issue (RSS Readers Click Here to Watch Video):