Sales and Sales Management Blog

October 31, 2008

What Does Your Client Touch Program Say About You?

Filed under: Client Relationships, Communication, business, marketing, sales, selling, small business, trust — Paul McCord @ 8:26 am
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What are you doing with those prospects that are in your database that aren’t ready to purchase yet?  Are you in the process of establishing trust and good will-or are you demonstrating that you aren’t trustworthy or that you really don’t have anything of value to offer?

Whether you’ve considered it or not, everything you send to a prospect communicates your value-or non-value, and your trustworthiness.  Everything you send.  No matter how small.

Most salespeople, professionals, and companies will put their long-term prospects into a database and keep in touch with them on a semi-regular basis.  They’ll send a monthly or quarterly newsletter, a “how ya doin, ya ready to buy yet?” email or letter on occasion, and make a phone call once in a blue moon.  Some will inundate the prospect with so much junk mail and junk email that the prospect wonders how to get rid of them.

Either way, the prospect is learning about the salesperson or company.  The question is what are they learning?

Let’s look at the three most common negative messages prospects get from salesperson and company communications:

You Aren’t Reliable:

Reliability is a major trust factor and what you send and when you send materials to your prospects will communicate to some extent whether or not you are reliable.  If you promise to send information, do you send exactly what you promised, when you promised?  If not, why should a prospect trust you?

Do you send a monthly or quarterly newsletter?  Is it on time, every time?  If the date on your newsletter is May and it arrives in June because you were too busy to get it out, what message does that send?  Think people won’t notice?  I received the Jan/Feb newsletter from an interior decorator-in April.  Is that how she handles all of her commitments?

You Don’t Value My Time

Are the items you send of real value to the prospect?  If it isn’t of value, why do you send it?

What people will send is amazing.  I get newsletters with recipes, gardening tips, and other information that might be appropriate for some salespeople, but not from the people who are sending it.  Recipes, gardening tips, household tips, etc. might be appropriate in a REALTOR’S newsletter, but not an accountant’s, or financial planner’s, or insurance agent’s, or from an auto repair shop.  If I get something from an accountant, I expect it to have some relevance to my financial needs.  If I get something from an auto repair shop, I expect it have something to do with automobiles.  I don’t expect an attorney to send me an article on how to give a massage (yep, got one). 

What can you send of value?  There is a ton of stuff.  Articles relating to the area you address; special offers; new services and/or products; major company news; and other pertinent information.  All of these items are likely to be of interest to a majority of your prospects.

The key is not to waste your prospect’s time.  Of course, not everything you send is going to be of interest to every one of your prospects.  But if your information is good, all of your prospects will find value in your communications-just not every prospect for every communication.  I get a number of emails after each edition of my newsletter.  Many praise a particular issue; others are indifferent.  But some of those who were indifferent to one issue may email me an issue or two later raving about the latest issue, while the one who was enthused about the first issue emails me to let me know I missed the mark with them on the last issue.  I, like you, have to aim to bring lots of great material to the table, knowing that each reader is at a different place in their careers.  What appeals to one, may not appeal to another.  However, if I bring enough diversity to the newsletter, I can hit everyone’s needs, just not in every issue.  You must aim for the same goal-bring substance to the table, and overtime, you’ll feed the lot.

Every time you communicate with a prospect or client, even with your mass communications, you are teaching them to pay attention to you because you value their time and give them value-or you are teaching them to ignore you because you are nothing but a time waster.

You Don’t Know Your Business

Sending out-dated or erroneous information also will be noticed by many prospects.  If you fail to review and carefully examine your information to make sure that it is up-to-date and accurate, you run a serious risk of convincing your prospect that you simply don’t know what you’re talking about.

The articles and other materials you send, whether written by you or others, must contain current, accurate and trustworthy information.  Never assume that yours is the only information the prospect is receiving about your subject.  Your object is to inform, not confuse.  Your goal is to impress, not show your ignorance or laziness.  Errors are especially easy to miss when dealing with statistics and factual matters of record.

This isn’t to say that you can’t send items that may challenge conventional wisdom.  You certainly can-and if you can back your information up, these may be your most potent communications.  For instance, I work obviously in the areas of sales and sales management.  Most salespeople and managers know there are a great variety of training methods and theories.  Controversy and going against convention isn’t an issue in this industry.  As a matter of fact, many are well aware that many conventional ways of doing things simply don’t work that well.  Consequently, going against convention and finding better ways is welcomed. 

But in other industries, for example, many sectors of the financial services industry, bucking convention many not only raise many eyebrows, but your very competence may be questioned if your ideas are not well documented by independent sources.  Does this mean that you can’t present non-traditional ideas in these industries?  No.  It simply means that you must go out of your way to document their validity because you know upfront that you’re dealing with a subject where innovation is going to be questioned-not just by peers, but by many prospects also.

In addition to sloppy work, overstatements and exaggerations are another red flag for prospects.  It is perfectly permissible to make strong statements about your products and services as long as you are not the author of those statements and you can identify for your prospects exactly who made the claims about your product or service. 

If you use superlatives about yourself, your product/service, or your company, they cannot be from you and you must fully identify the person who made them-meaning they can be checked out.  If you make the claim yourself, you lose credibility.  If you attribute the superlative to someone who is not fully identified, you lose credibility.  If you use an authority in your particular field and give full identification, you gain credibility.  If you use an everyday customer with full disclosure, you gain credibility.

Examine your prospect communications in light of these three most common mistakes.  Don’t allow yourself to lose credibility while trying to build credibility.  Every communication you have with a prospect or client is just as important as your initial communication with them.  You’ve worked hard to gain their trust and respect.  Don’t blow it by teaching them that you’re nothing but a time waster.

October 30, 2008

Selling IS a Profession to be Proud Of

Filed under: sales, selling — Paul McCord @ 5:11 am
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Like many of you, I have many roles that I must fill.  I am a sales trainer and coach; I am a sales management consultant; I am a writer and speaker; and I am a salesperson.  As the owner of a sales training and management consulting company, I don’t have the luxury of concentrating on just one activity.  I’m sure most of you don’t either.

But as we look at the various activities that make up our jobs, we must keep in mind what it is that is our primary function.  And no matter what our title-account rep, REALTOR, loan officer, financial planner, producing manager, manager, sales rep, business owner, attorney, accountant, architect, or whatever, we must be ever mindful that our primary job is selling-that is, keeping the business open and healthy.  We are the production force for our company, whether that company consists of just ourselves or tens of thousands of employees.

Yet, I find that many of the people I work with and speak to want to be anything but salespeople.  They go out of their way to adopt titles that minimize their selling responsibilities.  An examination of their business cards gives no clue as to their primary function.  Speak with them and they never use the words sales, selling or salesperson.  They use euphemisms, they use industry jargon, or they just plain avoid a direct discussion of their role. 

Some when asked directly will freely admit that they don’t want to be identified or associated with selling and sales.  They view themselves as professionals in their industry who on occasion must unfortunately act as a salesperson.  But during these most uncomfortable of moments, they still refuse to address their role directly.  They are embarrassed to collect the necessary data to complete an order or have a new client sign a contract. 

Such action is self-defeating.  Without a clear understanding and appreciation for what one’s primary function is, it is difficult to be successful at it and very possibly confusing for the client.  The client is well aware that they are in the process of purchasing a product or service.  They know the person in front of them is trying to sell them something.  Yet, when that person gives the impression that they are uncomfortable selling the product or service, what message does that send to the client?

One of my coaching clients is one of the top financial planners in the country.  She runs circles around most other financial planners in terms of both her production and her technical skills.  What does she attribute her great success to?  Her highly developed technical skills?  No.  Her strong marketing?  No.  Then what?  She contributes a great deal of her success to her competition’s attitude toward their job.  She sees herself as a salesperson who is a financial planner.  She isn’t afraid of selling.  In fact, she prides herself in being a salesperson first, a technician second.  Her competition, she says, will do anything to avoid the “salesperson” image.  Great technicians they may be, but they can’t generate business as she does because they avoid the very actions and abhor the attitude that produces the business.  And she believes that as long as her competition views themselves as financial planners who must stoop to selling on occasion, she’ll never have serious competition for the majority of her target market. 

We are participants in an honorable profession, one that has been the backbone of most societies for thousands of years.  We are the ones who feed and clothe the world.  We’re the ones that allow the government to run, who allow the corporations to thrive and to hire all those millions of workers, who allow researchers to find new cures and develop new technologies, and who have allowed the quality of life improvements that have literally changed the way people live.  We are the force that “makes the world go ’round.”

The next time you feel hesitant about identifying yourself as a sales professional, keep in mind the role you play in the world’s economy.  And keep in mind that your client knows you’re a salesperson whether or not you want to identify yourself as such or not. 

To be effective in your job you must know who you are.  You’re a professional.  You’re the one who allows your family, your neighbor-and that prospect you’re talking to–to live the life they live. 

If you’re not comfortable with who you are as a sales professional, why should your prospect be comfortable buying from you?

October 28, 2008

Guest Article: “Ten Tips to Tap the Power of Prospecting,” by Dave Anderson

Filed under: prospecting, sales, selling, small business — Paul McCord @ 5:55 am
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Ten Tips to Tap the Power of Prospecting!
by Dave Anderson

Many salespeople prospect little, if at all, for two primary reasons: they are so focused on short-term results of their job that they fail to build a career and they become discouraged, because they see little immediate results from their prospecting efforts. Sadly, most of these efforts are sloppy and haphazard! With a little bit of common sense, consistency, and courage, you can build a prospecting discipline into your sales arsenal that not only brings in immediate results…but will also convert your job into a long-term, high-paying career.

1. Prospect before you need prospects.
Many salespeople prospect only when business is slow. They are motivated primarily by desperation and the fear of starvation! The key, one-word strategy that makes prospecting far more effective is “proactive,” because you will never build a pipeline of prospects if the only time you prospect is when you’re desperate. A key strategy for becoming proactive at prospecting is to set weekly prospecting goals and scheduling the activities necessary to achieve results.

2. Remember that a key to prospecting is consistency.
Inconsistent prospecting efforts bring little results and much frustration, just as with inconsistent dieting or exercise. You’re often worse off for your half-hearted efforts than had you never started in the first place. Develop discipline, because without it you’ll never develop the work ethic necessary to see tangible, long-term results.

Definition of discipline: Making yourself do the things that you know are important even when you don’t feel like doing them; even when doing so is not easy, cheap, popular, or convenient!

3. Use follow-up to convert initial introductions into relationships.
Without follow-up, prospecting is an extremely low-percentage proposition. Following up by phone, sending out information, or placing the prospect on your mailing list is essential to turning a “new face” into a consistent source for sales. It’s important to remember that giving out your business card or brochure is only half of the prospecting equation. You must also gain and record the prospect’s contact information for future follow-up.

4. Avoid “Hail Mary’s” unless all high percentage efforts have been exhausted.
“Hail Mary’s” are long-shot time wasters: cold calling from the yellow pages, mailing to prospects who have not been pre-qualified, and the like. “Hail Mary’s” connect every so often, but you don’t want to bet your career on them. Long shot, low percentage prospecting efforts are one of the key killers of enthusiasm for prospecting.

5. Use soft-touch and not hard-sell.
Pushy prospecting efforts turn off potential buyers and destroy any chance you have for building a long-term relationship with them. Keep in mind that prospecting is NOT finding strangers and trying to sell them your product. Rather, it is planting seeds to let people know who you are, what you do, and where you work…while you gather their contact information in order to build a master list for future follow-up and sales efforts.

6. Transform your role from a vendor to a resource.
A vendor is someone you hear from strictly when they want to sell you something. A resource also wants to sell you something, but they bring reciprocal value to the relationship to create win/wins. From time to time, send or bring a relevant article, website link, etc. to a prospect that will add value to their business or life.

7. Give people a reason to ask for you.
Be memorable, in a positive way! What makes you different? What makes you better? You’ve got about ten seconds to communicate this to your prospect. Determine your personal value proposition. Have you been at your business for a long time? Do you have specialized knowledge in a certain area? Do you offer customers something special that no one else offers? Put this type of differentiation to work for you.

8. Give people a reason to buy NOW!
You should plant this seed in general terms when first meeting a prospect and then follow up with more specificity and urgency after your initial contact. This, “one-two” combination for transforming buyers from immobility and indifference to ready and willing is essential to capitalizing on the momentum of your initial contact and increase the chances of seeing faster results from your efforts.

9. Chart your results and set goals for improvement.
If you don’t measure and track your progress, you are unlikely to stick with your prospecting efforts. Tangible results will make a believer out of you. They will also offer clues for improving your efforts or reinforcing strategies that are already working for you. Once you track your progress for ninety days, you’ll have a benchmark to set intelligent goals for the future.

10. Always try to turn one deal into two or more.
Maximize your friends, prospects, and sold customers by gaining a referral from them that will serve to fill the empty slot in your pipeline and replace each customer that you sell.

Peak performance author, columnist, trainer and speaker for sales and leadership, Dave Anderson walks the talk of a leader. He has led some of the most successful retail automotive dealerships in the country; most recently heading up a dealership with more than $300 million sales. Dave gives more than a hundred speeches, presentations and workshops all over the world and has delivered his leadership message in 13 countries. Dave has written nine books and writes a monthly leadership column for two national magazines. He is president of the Dave Anderson Corporation and LearntoLead.  Visit his website at http://www.learntolead.com

October 27, 2008

It’s Your Move: Keeping the Sale Moving Forward

Filed under: Sales Process, sales, selling — Paul McCord @ 5:17 am
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One question I hear from salespeople on a regular basis is: “what do I do after the initial meeting with the prospect to maintain contact and increase their interest?” 

The question from their point of view is, “what do I say when I call them back?” 

In reality their question is an admission of a lack of preparation and planning.  Not just a lack of preparation for calling an individual prospect, but a total lack of preparation for meeting with prospects.

Unless you are engaged in a one-time close sale, you know going into the initial meeting with a prospect that your sales cycle will require you to maintain contact with them over an extended period of time before the sale is consummated, whether that be a week, a month, or a year.  Since you know you will have to follow-up with additional information, more meetings, a proposal, a committee presentation, and/or a formal needs analysis, you should be fully prepared to carry the relationship forward, knowing exactly what your next move will be before you ever enter the initial meeting with the prospect.

After only a short exposure to meetings with prospects you have seen virtually all of the variances your meetings can take, from the prospect that shows a great deal of interest, to those who show no interest at all, and everything in-between.  Once exposed, you have no reason not to be fully prepared to take control of the situation when exposed to that type of prospect again.

Since you will see the same basic situations over and over again with your prospects, you should know exactly what the next step in your process will be before you wrap the initial meeting with your prospect.  Instead of going back to your office and wondering what to do next, you should have already agreed with your prospect on the next step to take, whether that be another meeting, sending follow-up information, or simply putting the prospect on your long-term touch program.

Think of the sale as a staircase with a number of alternate stairways branching off of the main staircase.   If you are familiar with the drawings of E.M. Escher, think of his etchings of stairways where there are myriad branches but all stairways eventually lead to the same location.  That’s your sales stairway with all of the branches eventually leading to your central location-the sale.  Some stairways are short and direct, others take a very circuitous route.

Your job is to have planned each route and to know exactly what you must do to guide your prospect through the stairway he or she has chosen.  To do that you must have a well defined plan, knowing exactly what your moves will be well ahead of time.

The first step in your staircase is, of course, setting the initial appointment.  That step naturally leads to your second step-the appointment itself.  Unfortunately, that is where the staircase ends for many salespeople.  Don’t allow yourself to ever be put in that position.

Just as the first step-setting the appointment-lead naturally to the second, your second step should lead naturally to your third step, and so on throughout the sales process.  What your third step is will depend on what transpired during the initial appointment since your prospect may choose one of several staircases to climb. 

For most of us, the initial appointment serves numerous purposes, one of which is qualifying the prospect.  In fact, for many, the appointment isn’t with a prospect at all, but is rather with a suspect-someone we think or maybe just hope might be a prospect.  During the initial meeting one of your primary jobs is to determine if the suspect is a prospect and if they are, what type of prospect-short-term or longer-term.  Your staircase will branch off in different directions depending on whether you determine the suspect is not a prospect at all, is a short-term prospect, or a long-term prospect.

If you determine your suspect is not a prospect, your staircase ends with this meeting.  There is no need to pursue them further.

If you determine your prospect is a short-term prospect, your staircase will continue, but you’ll have to decide during the meeting which branch of the staircase to lead your prospect-are you going to set another meeting, present a proposal, send or deliver additional information, or is another move appropriate? 

The key to building your staircase and your relationship is to have your prospect agree on the next move before the end of the meeting, and in order to do that you must know both what the logical next move for the particular prospect is and where that move is going to lead in the sales process.  Never leave a meeting without agreeing on what will happen next and when it will happen:

  • Are you going to research an issue for the prospect?  If so, when will you deliver the results of your research and how will you deliver them-in person, via an email, or will you send them via the mail?   Once delivered, what is the next logical step to have your prospect agree to?
  • Will there be a second meeting?  Set a date and time and a specific goal for the meeting before you leave the initial meeting.
  • Are you going to get the prospect additional information or data?  If so, agree with your prospect when and how the information will be delivered and the anticipated results of supplying the information, as well as what the next step after the information has been delivered should be.

The key to building your stairway and leading the prospect to the sale is to always have your next step built before you finish the step you are on.  If you are to deliver information, know exactly what information to deliver, how you will deliver it and agree on what will happen once the information is in your prospect’s hand.  If your are setting a meeting, agree on the time and date, the goals for the meeting and the next step to be taken after the meeting.

Don’t rely on chance, luck, or happenstance-plan your moves well in advance and gain your prospect’s agreement and commitment.

Planning your moves is not difficult.  If you are meeting with a short-term prospect you know what the likely next moves will be, in fact, there are probably only a handful of possible moves.  For some prospects the next move will be another meeting, for others additional information, for others possibly a demonstration or a proposal.  Since you know what to anticipate, have a clearly defined plan of action for each eventuality. 

Build the third step in your staircase the same way.  During the second meeting you gain your prospect’s agreement on what should take place next and then set a specific time and date for that step along with specific goals for that step.  When delivering the agreed upon research, agree with your client on the next step and again set a specific time and date and goals for the next step in the process. 

By continually gaining agreement from your prospect to the next step in the process, you keep your prospect engaged, you continually monitor the prospect’s level of interest, and you prevent yourself from falling into the awkward situation of wondering how to re-engage your prospect.  Never leave a meeting or finish a conversation with your prospect without knowing what will happen next, when it will happen, and what the anticipated results of the step will be.

If you find you are working with a long-term prospect, you build a staircase that, like an Escher staircase, takes a longer, less direct route to the sale, but just as with a short-term prospect, you guide the prospect along a stairway that you know leads to the sale.  Your steps may have longer intervals and may entail less direct interaction, but they must still be agreed upon by your prospect.  These steps may include your monthly or quarterly newsletter, scheduled phone calls at a specific future date, or even calls based on specific future events such as the release of a new product or the passing of a specific threshold such as the beginning of a new quarter.

Prior to your next appointment with a prospect or suspect, create your staircase and map out a logical route to the sale for each scenario you are likely to encounter.  Although you’ll have stairways branching off from your main staircase, you’ll probably have no more than a handful of branches for short-term prospects and probably no more than two or three for your long-term prospects.

Lay out on paper each logical step for each branch and then plan how you will lead your prospect to agreeing to each step along the way.  Although many salespeople believe writing out scripts is fake and insincere, be aware that you will eventually create an effective-or ineffective–script that you’ll use over and over to introduce and seek agreement from your prospect to the next step to be taken.  You can either leave the creation of your script to the spur of the moment as you are standing in front of your client, or you can take the time and care to do it while you can carefully think through the best way to introduce the next step and gain your client’s agreement.  Either way, you’ll eventually end up with a script you’ll use over and over.

You don’t have to be like the majority of salespeople who struggle to keep in touch with their prospects and move them along the sales process.  Instead of worrying about what to say, when to contact a prospect, or how to get your prospect to move along the process, simply build the next step while you’re with your prospect.  Not only will it give you more confidence since you know you’re in control, you’ll close more sales and close them faster-and that’s a good move.

October 24, 2008

Why Clients Resist Giving Quality Referrals

Filed under: Referral Selling, marketing, prospecting, sales, selling, small business — Paul McCord @ 8:43 am
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Virtually every advisor has been taught that generating referrals from clients and prospects are the way to success, but less than 15% of all advisors generate enough referrals to significantly impact their business.  Most of the time, the problems advisors have generating referrals is due to the training-or lack thereof–they have received, rather than with the their performance.  The traditional referral selling training has been to “do a good job and ask for referrals.”  Yet, it has been obvious for decades that it really does not work very well.  Using the traditional approach, the typical advisor will get an occasional name and phone number or two from their clients, but seldom do these names and phone numbers result in a sale.  Certainly, on occasion, these referrals become clients, but the close ratio tends to be quite poor.

The failure to generate a large number of high quality referrals actually lies in the traditional method’s approach to the client.  The traditional “do a good job and ask for referrals” approach creates several roadblocks to getting referrals.

First, by waiting until the sale is complete and then asking for referrals, your client has not had the opportunity to prepare for your request.  To the client, the request comes from out of the blue.  When you approach your client with your request without giving them an opportunity to think about it, you have put them on the spot.  You are only giving them a few seconds to go through their mental file cabinet.  More than likely in this situation, they will not be able to immediately produce the number or the quality of referrals you want.

Second, even if your client takes a few seconds to think about it, they really do not know what you want.  It may seem obvious to you, but your client really has not a clue what a good referral for you is.  This may seem a little difficult to accept, but it is true.  You assume that because you sell a whole array of financial products and services, your customer is immediately going to think, “Who do I know who needs or uses any type of financial advice, guidance or products?”  Wrong assumption.  What they actually think is “what does this person want from me?”  Or, more likely, “how can I get out of answering this?”  Without having defined for your client exactly what a quality referral for you is, you stand a very little chance of getting quality referrals.

Third, the traditional method of “do a good job and ask for referrals” does not give your client a reason to give you referrals.  We make the assumption that if we have done a good job, the client will like and respect us and be willing to give us referrals.  Again, this is far from the case.  Most clients will not give good, quality referrals just because they like you or because you have done a good job for them.  You must give them a reason to give you referrals.  They need to understand why it is in their best interest to give you referrals-and after the sale is complete, it is too late to try to explain how giving you referrals benefits them.  Clients assume that whomever they refer you to will be more demanding and critical they have been.  When a client gives a referral, they are putting their reputation and image on the line with the person to whom they are referring you.  They are concerned about what their friend or acquaintance is going to think of them, particularly if you mess up.  Consequently, you must give them a good reason why they should go out on the limb for you.

Fourth, the traditional referral generation method does not give the client an objective standard by which to measure the quality of your performance.  You and your client may “feel” you have done a good job, but when you ask for referrals, they begin to think back over the sales process more critically and question whether you have really performed up to standard.  If the two of you agree up-front on exactly what you need to do in order to “do a good job,” they will have an objective basis to decide if they trust you enough and if you have earned the right to be sent to the people they really know and respect.

And finally, although not a direct result of the traditional referral generation method, an equally serious issue is studies show that the majority of the times advisors do not really ask for referrals-rather they suggest referrals.  Instead of asking a direct question seeking referrals such as “John, which of your friends, family members or acquaintances do you know that I may be able help solve some crucial issues?” the typical advisor will make a weak request such as “John, if you happen to know someone I can help would you mind letting me know?”  Or, “John, if you run across someone who could use my services would mind giving them my card?”  Rather than a request for referrals, these are throwaway sentences, quickly forgotten by most clients.

Traditional referral training is inherently unfair to you, the advisor, and your client.  It does not give the you the tools needed to successfully work with your client to generate quality referrals, and it does not give your client a reason give referrals, nor a chance to become comfortable giving you referrals.

Yet, it is possible to generate a very large number of high quality referrals from your clients.  You need to make sure that your interaction with your client eliminates these shortcomings.  Preparing your client during the sales process to give referrals by informing them up-front that you are a referral-based advisor and expect referrals after the sale; defining for your client exactly what a quality referral for you is; educating your client on why it is in their best interest to give you referrals; and then coming to an agreement with your client on exactly what you must do during the course of the sale to earn their referrals will quickly give you a large pipeline of quality referrals. 

By recognizing and resolving the problems of the traditional referral generation method, you can turn these issues into your strengths, generating a large number of high quality referrals from almost every one of your clients and prospects.

October 23, 2008

Guest Article: “Maximizing Your Price in a Soft Economy,” by Mark Hunter

Filed under: Closing Sales, Economy, business, sales, sales psychology, selling, small business — Paul McCord @ 5:25 am
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Maximizing Your Price in a Soft Economy
By Mark Hunter

Establishing maximum value for your price is never easy.  In today’s volatile economy, it’s even more of a challenge.  For most companies, costs are increasing, yet the ability to pass them along to the customer is fraught with numerous roadblocks.  The customer’s response to a price increase is rarely positive, with the usual line of objections that go along with it.  In addition, there are the concerns that a competitor’s price may undercut yours or that the customer may choose to go down a different path instead of buying from you at all.  As big as these issues are, they pale in comparison to the number one roadblock to maximizing your price point:  the confidence of the salesperson.

The main reason why companies do not capitalize on their potential revenue is because their salespeople do not have the confidence to ask for and receive the highest price point.  If a salesperson is secure in what they are selling and in knowing how the customer will benefit from their products/services, then they will be confident in asking for and getting the desired price point.  The problem is that many times the salesperson lacks confidence in at least one of these areas, resulting in their inability to make their sales quota.

To rectify this problem, it’s important to examine how the salesperson first developed a lack of confidence in their ability to maximize their price points.  Generally, it stems from a sale they perceived to be lost because their price had been too high.  On the surface, their assumption probably appeared to be correct.  However, in reality, it just seemed that way because the right price-value relationship had not been established.   If the salesperson had executed a proper sales strategy that allowed both himself and the customer to see the product’s/service’s true value, this could have been avoided.  It needs to be communicated that in a B to B environment, the benefits are to both the buyer and the business they’re buying it for.  In a B to C environment, the benefits are to both the buyer and to the person(s) who will actually use the product or service.  When the salesperson and the customer understand this, it can help erase the uncertainty that the price may pose.

Let me give you two quick examples.  If a person works for a mega-global company and is buying widgets, he’d have no problem spending a little on them if he knew he was buying them from a reputable company that has experience selling to other mega-global companies.  In essence, the customer is looking for confidence and is willing to pay for it.  In a B to C situation, because the customer doesn’t want to look like a fool for their purchase, they want the salesperson to provide them with enough emotional benefit to allow them to convey to others that they made a great decision.  In both situations, an inexperienced salesperson is going to lose the sale if they don’t take the time to use questions that encourage the customer to fully express their needs.  In general, new salespeople often lose the sale shortly after they’ve stated their price.  Thus, it’s only natural for them to believe that the price was the determining factor.  However, when digging below the surface, the price was not what prevented them from closing the deal.  Rather, they lost the sale because they didn’t ask enough questions to fully establish the needs of the customer.

Top-performing salespeople ask questions that allow the customer to elaborate on their needs and then demonstrate their listening skills by asking appropriate open questions and probing deeper with great follow-up questions.  They use the information that they learn to better explain how their product or service can be beneficial to the customer.  In my 25 plus years of selling, I’ve learned that the customer’s real needs, hurts, and wants don’t often surface until you’re demonstrated genuine interest in what their thoughts and goals are.  Ironically, this means that you can throw out their initial comments, as it is rarely the need they are looking to fill.  If you expect to base your price-value relationship on what you first hear, you’ll never come close to achieving your maximum price point. 

In summary, today’s economy is full of opportunities for top performing salespeople to ask really good questions that get customers talking.  This allows both the customer and the salesperson to see, feel, and understand what their true needs are.  When the salesperson can experience this across multiple customers, they will begin to develop the assurance they need to be able to confidently convey the maximum price point their company expects them to receive.

 

Mark Hunter, “The Sales Hunter”, is a sales expert who speaks to thousands each year on how to increase their sales profitability.  For more information, to receive a free weekly email sales tip or to read his Sales Motivation Blog, visit www.TheSalesHunter.com.

October 22, 2008

New E-book by The Top Sales Experts Now Available

Filed under: Book Recommendations, Sales Resources, sales, sales training, selling, success — Paul McCord @ 8:59 am
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The Top Sales Experts group has just released its newest E-book of terrific sales and sales management articles that you can download for FREE at:

http://www.topsalesexperts.com/signUp.php

Stuffed with great articles from more than 50 of the world’s top sales and management trainers and consultants, you’ll find tips, advice, strategies, and techniques that can immediately impact your sales and your income from world class authorities who know how to help you get your production up.

Authors include:

Kevin Eikenberry

Jill Konrath

Colleen Francis

Keith Rosen

Jonathan Farrington

Lee Salz

Kevin Dwyer

Dr. Gregory Stebbins

Linda Richardson

Myself

and dozens more

Head over right now to The Top Sales Experts site and get your copy.  It’s FREE.  It’s packed with material that will help you sell.  And most importantly, it’s going to help you increase your income while strengthening your relationships with your clients and prospects. 

October 21, 2008

Guest Article: “Instead of Discounting, Back Value in Your Proposal,” by Dave Stein

Filed under: Closing Sales, sales, selling — Paul McCord @ 4:54 am
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Instead of Discounting, Back Value in Your Proposal
By Dave Stein

Last minute discounting has become so prevalent that many companies have come to depend on it as their default sales strategy. Employing a go-to-market strategy of being the lowest cost provider is one thing, but dramatic, tactical discounting on every deal will erode your company’s margins and leave you digging a deeper and deeper hole in which your company will ultimately bury itself.

I don’t want to give you the impression that discounting is never appropriate. I can think of three scenarios where it is required:

When a company has mispriced their offering.

Let’s face it. Times have changed. Competition is fierce. And yes, as much as we don’t like to admit it, prices and fees have been forced down in some markets. If everyone else is now selling what you sell for $1.00 and you’re still selling it, just as you always have, for $2.00 and you can’t prove you can deliver a dollar’s worth of additional value for the customer, your pricing is too high–way too high. Call it a discount, or call it a price adjustment, in this situation you’ve got face reality and sell your products at a price the market will bear, or you won’t sell very much at all.

As a token concession to close the deal.

I don’t see a problem with “rewarding” a buyer for signing an order within your timeframe, for example. Understand, I would much rather provide other concessions that don’t cost my company money and don’t educate my customer that whenever I am going to ask them for an order, I am going to give up part of my margin and commission. But I do live in the real world and understand that for my clients, pricing concessions are sometimes required to get the deal signed.

When you haven’t done an adequate job of selling the unique business value your product or service will provide the customer. My clients will tell you I am never happy in a situation like this, but if you’ve not done the best selling job, and there is some room for a discount, and you need the deal, discounting may be better than losing the deal on principal.

How do you avoid discounting?

I talk a lot in my book, How Winners Sell, about the fact that to succeed in business to business sales today, you must sell business improvement, not products or services. That means differentiating yourself from your competition in the unique value you, your products and services, and your company can provide toward your customer achieving their corporate, divisional, business unit, department, or government agency goals.

Have you transitioned into the mode of creating customer demand by targeting accounts–getting in before they know they have a need, and establishing yourself as a knowledgeable, trusted, and patient advisor? If not, you’ll continue to be on the receiving end of all sorts of one-sided customer demands, mostly taking the form of answering requests for information, doing presentations, demonstrations, fighting the constant battle against having your offering commoditized by the customer, and being on the receiving end of strong demands for discounts.

We’ve been taught over the years to bundle our products and services where possible to provide the customer with a single investment number. That way, we were told, they can’t nickel and dime you, and can’t slice up your offering, able to say no to pieces they don’t want or need. But now times have changed and when you think about it, that’s exactly what you want to do.

If you sell products or services that can be componentized, sold in pieces or modules, or in phases, you’re potentially in good shape.

Scenario

You know your competition is going to come in with a substantial discount, as they have before. Your sales effort must include:

- Assuring yourself that the customer is not making a decision solely or primarily on price. This question must be asked again and again of key decision makers.

- Getting agreement from the real buyer that you understand their business objectives and that your offering can help them achieve those objectives. This method does not work unless you are dealing with the real buyer.

- Finding unique areas of additional value (on top of their existing requirements) that you can provide through the capabilities of your product or service offering.

- Management support for potentially selling part of your offering now, and the rest later on rather than selling the whole thing at a discounted price.

In cases where you know your competitors will be discounting, you’ll need to offer several investment options to your customer. Alan Weiss, the consultant’s consultant, suggests providing three opportunities for them to say yes.

If you offer your prospect three options to buy–let’s say for the sake of labels, Platinum, Gold, and Silver–and you’ve done a good job of selling the business value of your offering–you can avoid having to concede more than a nominal discount.

Your plan here should be not to discount, but rather to back value out of your proposal to meet the prospect’s desired investment level. Presenting three options lets you do exactly that. The customer gets to determine how much they want to invest and will enjoy the resulting ROI associated with that level of investment.

Here are the three options:

The Platinum Option

- Gets the customer what they need (and want)

- Highest level of investment. You might ask for a 10-30% premium over the Gold level for this option, depending on the value you believe you can deliver to the customer.

- All the features, modules, components, capabilities available. Your best resources

- Quickest time to value

- Priority service — A special 800 number, top of the queue, 24 x 7 x 365

- The highest ROI

- Other perks, such as quarterly meetings with your CEO, special invitation events, input into your product development plans

The Gold Option

- Gets the customer all of what they need (and a few wants)

- Budgeted level of investment. This is aimed right at the prospect’s budget level.

- Most/many of the features, modules, components, capabilities

- Proven, talented and dependable resources

- Quick time to value

- An attractive ROI

- Other perks, such as quarterly meetings with your VP of Service, special invitation events

When your prospect tells you your competition has come in with a very low price, you discuss calmly with them the fact that you have an option (the Silver option) that will provide them with what they need at a competitive price. You will already have differentiated yourself from the competition in a number of areas: understanding the customer’s business, industry, opportunities, challenges, competitive and customer pressures, and built rapport with the real buyer. In addition, you’ve professionally educated your prospect on the risks that befall companies who depend on tactical discounting to wi

The Silver Option

- Gets the customer most of what they need now, and the rest in “phase two,” next quarter or next year

- The lowest level of investment, aimed 10-30% below the Gold level, depending on how severe a discount the competition is going to offer

- Some of your total array of features, modules, components, capabilities. The rest can be purchased later.

- Talented and dependable resources

- Reasonable time to value

- An ROI that meets their corporate requirements

What will the customer do? The may tell you they want your Platinum option at the Silver price. If you’ve done an effective job selling the business value of your product or service and built a relationship with the real buyer based upon trust, you can look them in they eye and tell them it just isn’t possible. What will they do then? My clients tell me that more often than not, they’ll go for the Gold or Platinum option.

 

Before founding his sales consultancy, The Stein Advantage, Inc., in 1997, Dave Stein served for more than 20 years in various corporate executive sales and marketing roles. Now, through his coaching, speaking, and training, Dave provides companies with substantial diagnostic and remedial expertise enabling them, among other capabilities, to readily overcome tough competitors, refocus their selling efforts resulting in new levels of credibility and differentiation with high-level executive buyers, and to hire the right sales professionals, all leading to greater and more consistent revenues. Dave is the author of the Amazon best-selling business book: How Winners Sell: 21 Proven Strategies to Outsell Your Competition and Win the Big Sale, (Dearborn Trade Press, May 2004). For more information go to his website, www.HowWinnersSell.com

October 20, 2008

New Sales Chartacteristics Research Needs Your Help

Filed under: Coaching, career development, sales, sales training, selling — Paul McCord @ 5:20 am
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I received an email over the weekend from Brian Lambert, the Director of Sales Development and Performance at the American Society for Training and Development, seeking salespeople, managers, sales trainers, and academics to help him in his research for his doctoral dissertation.

I hope you’ll consider giving him a few minutes of your time to participate by taking one of the two surveys he is using to gather data.

Brian is researching the characteristics needed to successfully sell in a business-to-business environment and that should be addressed in a comprehensive description that can be used for training and coaching.  To this end, he, in conjunction with his doctoral advisory committee members, has developed two surveys.  One survey will determine the perceptions of sales managers, experienced salespeople, sales professors, and sales trainers regarding the importance of competencies required for success as an entry-level salesperson.  The other survey will examine shared competencies sales practitioners need to be successful in business-to-business sales, and how these competencies align to roles in terms of focus and differentiation.

You can get a complete overview of the Brian’s research goals, his methodology, and also take either of the surveys at http://www.b2bsalescompetency.info/. 

One word of warning-the site does explain the hypotheses he is working with and his methodology, but it is, of course, written in dry academic speak that only an academic can put up with.  If you don’t want to wade through all the pages, just take the surveys and know that you’re participating in a good cause.

October 17, 2008

Turn Your Client Database into Gold

Filed under: Personal Marketing, Referral Selling, business, lead generation, marketing, prospecting, sales, selling, small business — Paul McCord @ 4:14 am
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Right this minute, you are probably sitting on tens of thousands, maybe hundreds of thousands of dollars worth of commissions. Most registered reps have a database of current and past clients whose potential referrals are worth several thousand additional commission dollars per month.  Yet, this resource goes virtually untapped for most advisors.

Why?  Simply because most reps have not learned how to successfully convert their client relationships into referral relationships. Acquiring referrals from clients is not as simple as “doing a good job” and then asking for referrals. Generating a large number of highly qualified referrals from a client is a process that starts from the moment the prospect is first met, not a one-time act after the sale has been completed.  It requires an understanding of what a successful referral is based on, and how to exploit the referral to insure a successful contact with the referee.

Every referral involves the interaction of three people and four relationships among those three individuals.  The strength or weakness of each of these interactions will influence the success or failure of the referral for the advisor:

  1. The Advisor/Client relationship:  In order for the client to be willing to give a quality referral, there must have been built a strong bond of trust between the rep and the client.  A client may give a “referral” to someone they do not trust, but they will not give a referral to someone they know well and respect if they do not trust the salesperson.  If there is only a weak bond of trust between the advisor and client, the “referral” the client is likely to give will be to someone the client either believes will not meet with the advisor or someone the client does not know well or respect.
  2. The client’s purchasing experience: Clients will not give high quality referrals if their purchasing experience did not meet or exceed both their expectations and their priorities.  All clients enter purchasing relationships with certain expectations and priorities.  Expectations and priorities are not the same.  A client may expect to be kept fully informed during the course of the sale and may have certain product or service functionality requirements as his top priority.  In order to receive a large number of high quality referrals, the rep must make sure that they meet or exceed both the client’s expectations and priorities.  Despite the current parroting of the buzz phrase, “exceeding the customer’s expectations,” meeting and exceeding client expectations is seldom accomplished.  Few people take the time and effort to discuss with their client what the client’s expectations and priorities are-rather most reps, and companies, assume they know.  At best, all they can knowingly accomplish is meeting or exceeding their expectations of what they think their client should expect.
  3. The Client/Prospect relationship: The trust and respect relationship between client and referee are of great importance.  The stronger the bond of trust and respect between the client and the prospect, the easier it will be for the advisor to set an appointment with and then sell the prospect.  In referral selling, a great deal of the rep’s credibility, or lack thereof, is built on the trust and respect the prospect has for the client who made the referral.  If the client/prospect bond is strong enough, the rep is virtually guaranteed a sale.  On the other hand, if the bond is particularly weak, the referral is little better than a cold call.  Consequently, it is of utmost importance for the advisor to know as much as possible about the client’s relationship, and likely bond of trust, with the prospect.
  4. The advisor’s initial contact with the referee: based on the client/prospect bond, the advisor must determine how best to contact the prospect to produce the greatest opportunity to acquire a meeting.   The weaker the relationship between the client and the prospect, the stronger the contact method the rep should seek to employ.  If the client/prospect relationship is extremely strong, virtually any contact method, including a phone call from the salesperson mentioning the client’s name will suffice, but for a weak relationship, the rep must strive to use the strongest contact method possible.  In descending order, from weakest to strongest, possible methods of contact include a phone call to the prospect from the advisor, an email from the client, a client letter, a client phone call, a client/prospect/advisor lunch meeting.

Fortunately, the advisor can control most of the above interactions.  Only the client/prospect relationship is completely out of the rep’s hands.  Even then, the rep can compensate for a less than ideal client/prospect relationship through using a stronger initial contact method.

If you understand the foundation of a referral, you can quickly increase your referral-based business and begin to mine that gold mine in your client database.

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