This posting is a distillation of a presentation made by Liam Venter to the New Zealand RSN network of sales professionals.
Warning: This post is a little longer than normal – to reduce the length of it I would need to leave out useful and valuable information and suggestions.
What changes has the recession brought?
Retail shopping therapy: People are satisfying themselves with little treats – and delaying and cancelling bigger purchases. Liquor stores are doing well ... new car sales are not!
B2B investment therapy: Customers are re-assessing every business investment decision they make. They are looking for ways to reduce costs and achieve more with the same resources. They are seeking increased certainty that their envisioned results will be achieved. Relationship selling methodologies have overnight become ineffective. Clients are realising that relationships have little value to short term bottom line profit margins.
To succeed in helping clients make purchasing decisions you must move your style to a ROI focused methodology.
Cash flow – customers' payments are slipping out to 90 days.
On average, each of your clients is buying less – which means you need to acquire new customers at a faster rate than ever before. You need better lead generation, better prospecting and better conversion rates than ever before.
Surprise surprise! Last month Microsoft announced that its business partner awards for 2009 are going to business partners ... “that focus on selling solutions that improve business productivity.”
We used to say it's all about money the rest is just conversation. Now "it’s all about ROI the rest is just sales talk”.
Does the recession provide new opportunities ... hell yes!
- In recessions, companies innovate which provides fantastic opportunities for sales people.
- Some organisations are recession proof – e.g. Government funded organisations such as Universities, etc.
- New niche opportunities that didn't exist or work before boom – e.g. recycling and repair businesses are reporting business is up.
- In recession markets clients will change incumbent suppliers more readily.
- Some of you competitors will loose heart, or won't change to suit the new market conditions and loose market share.
- People who have flourished through recessions in the past know this is your opportunity to take this market share ownership.
- Here's my prediction. More new millionaires will be created during this recession than any other time in history.
What's it going to take to succeed? Quite simply you probably need increased revenue from same resources! A 10% revenue growth from same resource can equate to greater than 20% net profit increase.
From sport and business endeavours we know that there is a sweet spot. When we hit it, time can seem to slow down and the results greatly exceed expectations. The sweet spot is where results become greater than the sum of the parts. It happens when the sales strategy matches the customer’s requirements and the sales tactics fully support the strategy.
In talking with a local sales programme director a couple of weeks ago from one of the world's largest software companies, it was valuable and reassuring to hear someone else confirm that the difference in sales results between their resellers who have adopted their 'Process Selling Methodology' and those who haven’t “is simply night and day”. (I'll cover generic and custom 'Process Selling Methodologies' in the follow up to this article).
Strategy, methodology or tactics? What's more important? The reality is that they are all probably equally important. However you will you need to develop and define your strategy first, because your strategy will determine your methodology which in turn will dictate the tactics you decide to employ.
So what’s your strategy status? If asked would everyone in your company would they all detail the same strategy? This doesn't need to be a rhetorical question! After reading this why not go and ask your colleagues today what your company's sales and marketing strategy is?
The items in black font in the chart above denote the plan
The items in red denote what you need to focus on enhance the deployment of your plan
Sales skills and techniques. In the past a lot of sales training focused on teaching skills and techniques. I figure you have already spent some effort and time here and the improvements available from further improving your skills will only provide incremental results. If you are feeling this recession you are probably looking for something more than an incremental improvement. Because bigger and more sustainable returns are typically available from addressing strategy and processes, lets focuses on this first.
Much of the traditional sales training also focused on teaching sales people: how to establish rapport, how to negotiate and closing techniques, etc. We don't teach closing techniques we believe that you should construct a strategy that ensures you arrive at the point where you and the customer agree to a purchase (or not). We believe rapport with real value is only created when you can demonstrate your specialist expertise and your integrity. This is not done by asking what your prospective customer did in the weekend.
Some tactical mechanisms are obviously transparent and condescending to the customer.
I think we need to be very careful of which skills we choose to teach and adopt. Many of them are unneccessary, counter-productive and demeaning.
OK, now I have got that off my chest let's get back to looking at your strategy.
Sales forensics and analysis. The first step in coming up with your unique strategy is to analyse your unique situation. When it comes to sales training everyone is an expert. Sales training is littered with 1001 wining ideas. How do you know which of the 1001 ideas you should implement?
There has been surprisingly little genuine research into which of the 1001 wining ideas work and when.
We encounter companies trying to adopt inappropriate retail sales practices in the B2B space with sub optimal results. Retail techniques are often counter productive in B2B sales.
New Zealanders probably resist being controlled more than customers in America, where many of the traditional sales training programmes were developed.
For these reasons I think it is apparent that you need to be doing some in-house metricing (Yes I know metricing is not a real word – but I like it and having written it here, I now have copyright on the term!)
What should you be metricing?
- Sales training effectiveness (train half your staff or a test sample and compare the monthly sales results).
- Compare the results of sales people in your team that are using different sales methodologies.
- What is the spread of sales revenue performance within your team? Do the top sales people sell 30% more or 50% more? A large variation is an indicator of so many useful things.
- Compare the cost effectiveness of different lead generation mechanisms: Cold calling Vs Seminars Vs social and business networking tools Vs referral programmes, etc. ( I bet you are already doing this one.)
- Sales steps conversion rates: If you convert your strategy into a sequence of simple steps that take place in a sale you can measure the conversion rates between each step. This gives you the opportunity to spot and address where your sales process breaks most often. If you decide that after 'discovering issues', 'establishing an ROI strategy for your client' is the next spart 2tep in your sales process - then you should have metrics that measure the conversion rates from issues to ROI.
- It is imperative to measure the conversion rates between the different steps in your sales process - not the volume or quantity of each activity. For example don't just measure the volume of prospecting calls, measure the number of meetings you get from your prospecting calls. If you bonus staff on each of your process steps make sure the bonus is paid on the number of conversions between the steps – e.g. don't bonus them on the number of prospecting calls they make. Instead bonus them on the number of meetings they get from their prospecting calls!
Compare your current success rates from targeting new client business Vs existing client business to decide where to put more effort now.
- Analyse what's worked in the past and what hasn't.
- How many phone calls did you need to make to get one meeting? How many meetings do you need to get one sale? If it takes you 10 prospecting calls to get 1 meeting and it takes you 10 meetings to get one sale it's taking you 100 calls to get one sale. If you want to double your sales and change nothing else to improve your conversion rate then you are going to need to make 200 calls to get two sales.
Of course it makes it easy to do metricing if your selected sales methodology has built-in milestone recording.
If your metrics show something isn’t working ... either change it to make it work or stop doing it. For example If you can't measure a revenue gain, staff retention gain or other bottom line result from sales training – change your programme or stop wasting your money.
In the next part 2 of this article I cover how to profile the perfect customer and when in the buying cycle it's most efficient to engage with them. Most valuably in the follow up to this article I will cover the 5 main selling methodologies and how to select which methodology will get the best results for your chosen strategy. Read part two here