Today’s The Demand Creator Minute was a lot of fun to do. I got my new iPhone 4 this weekend, so this video was recorded, produced and edited all of the iPhone 4.
In the video, I answer the question: “What steps can we take to STOP providing answers and START provoking questions?” I share:
- 3 steps to get out of the giving information game into the provoking game
- How to dig deeper and break free from commoditization
- An example of how to ask provocative questions
In the video, I refer to the “We Do’s,” if you’d like to read more about that click on the link.
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 the wind that holds 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)
- We’ll answer all of your questions about building sales teams
- 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.
Here are the highlight’s for this month’s The Demand Creator Newsletter. If you aren’t yet subscribing and would like to receive a copy, just email info (at) imaginellc dot com; and put Newsletter in the subject field.
Many of you know that I regularly speak to Vistage groups around the country. For me, it’s a great opportunity to go into depth with groups of forwarding thinking CEOs about how to position their businesses to enjoy disproportionate rewards.
Join me on Friday, May 21st from 2pm to 3ppm EDT, as I share 3 critical secrets that will enable you to increase your sales, shorten your sales cycle and expand your margins – in any market condition.
- Define your core market to earn premium margins.
- Provoke awareness and move from being a discretionary purchase to an indispensable one.
- Monetize the sales process by building Cash Flow Farms™.
As many of you know, one reason that my company exists is because we want to end bad selling. For six years we’ve been developing innovative ways that enable companies to break free from their competition and drive more sales, faster and more profitably. Everyone at Imagine is very proud of what we’ve accomplished in this area.
But (you knew there was a but coming, didn’t you), I’ve always felt like we’re missing something. By some estimates more than 25% of adults in North America are involved in selling, which would mean that there are somewhere around 100 million salespeople, just in North America. In our own small way, we’ve been making progress on our mission, but there is no way we can have the impact we need to have by working only with salespeople who work for the companies that hire us.
For the last two years I’ve been playing with a variety of ways to bring our ideas, approach, processes, tools and support to a wider audience. For one reason or another, I’ve always hit roadblocks that have prevented us from moving forward. I’m excited to tell you that we have overcome the final roadblock and will be announcing a new program geared directly to people involved in a direct selling role. I’m not ready to announce the details yet (we’re working through the final details), but I wanted to share this intro to the program that we just recorded. I’d love (really) your feedback on it. I think it’s funny and makes the point, but I’m not our market – you are. So please tell me what you think.
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 the one 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:
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 create 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.
Wow! It’s hard to believe that we’re already into the second quarter. The first quarter was crazy at Imagine. It’s exciting to see companies and executives putting growth and expanding their margins back at the top of their agendas. While there are certainly struggles and challenges that lie ahead, more of you are realizing the wise words I learned long ago (sorry I can’t remember from whom).
The future holds opportunity, mixed with difficulty. The greater the difficulty, the greater the opportunity.
Imagine Business Development is growing to support companies in these efforts. I’m excited to tell you about two people who’ve saddled up in the battle to End Bad Selling!
David Fletcher has joined us a our newest Sales Coach. Fletch has worked in the sales and marketing field for over 15 years, doing everything from field sales to executive management. Like everyone at Imagine, he’s worked in a variety of fields such as software, technology, and commercial and residential construction. He’s also worked quite a bit in sports management. A former professional baseball player, Fletch is the Assistant Head Coach for Anne Arundel Community College and the Head Coach for the 11U Maryland Orioles where his oldest son, Connor, plays (you can guess which team he is more proud of).
Anyone who’s played baseball will quickly realize that Fletch played catcher and has a catcher’s mindset. He’s got a tremendous ability to size up a situation and see the most effective action to take. His coaching (and playing) background mixed with his sales experience makes him perfect for providing leadership, guidance, and a sounding board to help the salespeople we work with multiply their best results. Fletch lives in Pasadena, MD with his wife and four sons – the aforementioned Connor as well as Max, Jacob, and Jackson. Fletch is new to social media, so we’re still working on getting him on Twitter.
Vaneska Adams joins Imagine in the newly created position of Marketing Development Director. Vaneska has been charged increasing the spread of Imagine’s message, approach, and programs, as well as supporting our clients in the development and execution of our their marketing efforts. She brings a fresh marketing perspective to us, having spent several years working with direct marketing and consumer brands. She’s worked with (and within) small and large companies (and small companies that became large). Having grown up with parents who started their own business, Vaneska understands the unique challenges and opportunities of running a business provides. Vaneska lives in Crofton, MD with her husband and three children. When she’s not helping companies communicate their message more effectively, you’ll find her watching her kids play, painting, or cycling. You can follow and engage with Vaneska on Twitter @Vaneska_Imagine.
Feel free to send them an email, give them a shout out and otherwise engage with them. Please know that we are all here committed to helping you make 2010 and beyond the best years ever!
For more than twenty years I’ve talked about the effects of commoditization and working with small and mid-market companies to grow revenues and margins despite commoditization.
Last month, I wrote about the two sales that take place in any non-commoditized sale:
- The Account Sale – where you establish the value that you and your company bring
- The Transaction Sale – where the focus is on the sale of the commodity
As we’ve been rolling these ideas out to our clients and to their salespeople, we see a common area of resistance in the belief that, regardless of what you do, customers are going to increase the pressure they place on your price.
In fairness to that argument, I completely agree. No matter what you do, pricing pressure is going to increase. The question is where do you want that pressure – on your core product or service, (the commodity) which has, by definition, less margin or on the account value you bring, which is where you margin premium lies?
When your value proposition is effectively focused on your account value, it serves as a moat protecting the margins of your commodity. In my experience, if a small or mid-market company fails to build that moat, trouble lies ahead.
I realize I’m about to induce headaches, but it’s critical you stay with me. I’m losing sleep, because every day I’m seeing really good businesses throw themselves into the middle of the commoditization trap. Once there, your future is best described as quicksand – either do nothing and sink slowly and fight like mad and sink more quickly.
The fatal error can best be described as taking what you do and selling it. If you think what you do is what you sell, YOU ARE A COMMODITY, AND YOU WILL BE RIGHTFULLY COMMODITIZED. If that’s the case, then you must play the commoditization game to have any chance of success. (That game, by the way, is won by growing volume and cutting prices faster than anyone else. It is a race to the bottom.)
I created the following SlideShare presentation to illustrate my point. If you’re new to the blog, you can read these posts about pricing and value creation.
At the beginning of the year, I asked you to take a 90-Day Snapshot of your first quarter. I asked you to define success on April 1, 2010.
Well, April 1 is two days away – How did you do?
My top objective was to add 4 new franchisers to our prospect list. We added three and one is already been filtered out. So, I didn’t hit my objective this quarter, but we definitely made some progress and have learned a lot about what we really need to do to be successful.
Now it’s time to take your second quarter snapshot. Here it is:
Stop what you’re doing and answer this question:
It’s July 1, 2010 and you’re reviewing the second quarter of the year. Precisely how will you measure success? What will it take to give yourself an ‘A’?
Are you done with the list?
Now, choose the single most important item – if you could only achieve one item on your list, what would it be?
Why is answering this question so important? Because we all have a tendency to try to do too much and to lose focus. The key to success, especially in challenging markets, is to focus. It is far, far better to over-allocate resources to fewer opportunities than it is to underallocate resources to many. Don’t ever lose sight of what is most important – and ensure that you over-allocate your resources – time, money and energy – to that.
Want to exponentialize the results? Have every single person in your company answer the same question and post the answers in a central location – or company wiki.
If you’d like the benefit of public accountability, share your most important success in the comments section.
Mine? To successfully launch our new salesperson leadership program tentatively titled The Sales Genius Network.
In this installment of The Demand Creator Minute, I share with you a key insight into positioning yourself effectively and how positioning can support your lead generation. There’s an old saying, “Seek and ye shall find.” Well, the marketing implication of that is be careful what you seek, because there’s a pretty high probability that’s what you’ll find.
RSS Readers Click Here to Watch Video
In this video, I referred to a post from last week, here’s a link to it: The Most Powerful Question.
Lead Generation for Small & Mid-Market
The 5 Critical Actions That Will Increase
Thursday: April 8, 2010
2:00 PM EDT
To win in business today, you must overcome The Drought:
Today’s business environment requires every company, and especially small and mid-market B2B companies, to accomplish significantly more from their sales and marketing efforts with less.
The question is simple:
How Do You Profitably Accelerate Growth In Tighter, More Competitive Markets?
In the third installment of The Demand Creator Webinar Series, we will focus on the first three steps of The New Marketing Funnel:
The vast majority of lead generation tactics are not only ineffective, they actually encourage prospects to shop and to be price sensitive. Additionally, more profitable business opportunities are lost because lead generation techniques push too hard and actually send buyers online and cause procurement departments to seize control of the buying process. If you want to create demand, avoid procurement, and eliminate competition, you do not want to miss this webinar.
For just $99, you’ll learn:
In today’s hyper-competitive drought, can you afford anything but the best selling approach to drive your profitable growth?
Over the last six months, I’ve been writing about price and pricing a lot more. It’s been my intent to help you identify ways that you can not only protect your price (and by extension your margins) but enhance them as well.
To further support that ideal, we’ve just finished our latest training video Moving Beyond Price. This 30-minute video will introduce you to the critical ideas, philosophies, and actions that successful companies use to consistently and sustainably earn higher margins. We’re going to be making available to the public soon for the (low, low ) price of $24.95.
However, before we do that, I’d like to do two things. First, I’d like to thank the most loyal of my readers, and second, I’d like to get some feedback to make the video better. To that end, the first 15 people who leave a comment sharing why they want to move beyond price or how they’ve been able to move beyond price will get a free copy of the video. All I ask is that you provide your feedback after watching.
Here’s an excerpt of the video:
Here are the highlights of this month’s issues of The Demand Creator. You can read the entire issue here.
As always, thanks for you attention. I’d love to hear what you think of this month’s issue.
Note to readers: This article appeared in our monthly newsletter The Demand Creator. It elicited some interesting response and some wanted to comment on it. I am posting this article here, so the conversation can begin.
We’re interviewing to hire another coach to support our growth. A candidate asked me an obvious questions that elicited an interesting, unexpected response from me. What was my response?
“If you’re trying to improve performance from your sales team – buy-in doesn’t matter; actions do.”
“Ah,” you say, “but don’t you need buy-in to support the actions you want?” Over the last 20 years working with thousands of salespeople I’ve come to realize that the common answer is, “yes,” and the effective answer is “no, not really.”
At Imagine, we have a unique approach to supporting the growth of anyone – especially salespeople.
- Action: In our world, everything, and I mean everything, starts with an action. The reality is that nothing happens until someone does something. Talking about it doesn’t directly lead to progress.
- Results: Every action leads directly to a result of some sort. In our world, there are two types of results: Good results – the result of the action is what we expected.- Bad results – the result of the action is different from what we expected. This means something great, if unexpected, is a bad result. While this sounds counterintuitive, it’s a critical point. We’re trying to build purposeful, predictable performance. A great, yet unexpected, outcome means that further investigation is needed.
- Learning: From the result, good or bad, learning can take place, which plugs right back into driving the next action.
Most organizations focus on learning first. Focusing on learning first leads to a variety of barriers.
- It is at the learning stage where resistance occurs. The nature of “learning something new” triggers a fear response, which of course leads to a fight or flight action.
- At the learning stage, it’s all opinion. Sure, one may have experience, but experience is no match for the status quo.
- The biggest challenge in any change (and improving is a change) is that you are competing against inertia – a very powerful force. The only thing that overcomes inertia is movement, velocity, and ultimately momentum. Because there is no movement in learning, the initiative gets stuck or goes sideways.
- Humans, by and large, are not classroom learners. We are experimenters and roamers. When you focus on learning before doing, you are going against our natural programming.
Salespeople (and, usually, entrepreneurs) are action figures, they learn by doing. Every time (and again, I mean every time), we run into difficulties with our efforts, we are able to trace the cause of the problem to a focus on learning over action. While this sounds overly simple, the reality is that the action-result-learning process is a self-correcting mechanism.
Growth is spiral – it’s not linear. You don’t get better by dealing with a problem, situation, or stimulus once and then moving on; you get better by dealing with and constantly revisiting the issue and a deeper and more advanced level. As the wise saying goes, you don’t become a master by doing four thousand things; you become a master by doing one thing, four thousand times.
99% of improvement efforts are doomed to failure before they start. The reason is that step one is “get buy-in.” Management decides that something needs improvement then they start building the case. When they hit resistance, they must decide between two equally bad options:
- Engage the cynics, thus giving the resistance more credibility than it deserves grinding the forward movement to a trickle making it virtually impossible to overcome inertia, or
- Ignore the resistance, saying, in essence, we were just going through the motions.
Instead, focus on the action(s) that you want that represents the change you want to achieve. For example, don’t talk about the need to take a new approach to selling, instead develop a new questioning process and call for an increase in the number of the new questions that are asked.
When you focus on action first and learning last, buy-in takes care of itself.