Coming soon: Quick dip research about sales manager coaching in Australia

A lot of client conversations in the past week or so have ended up coming back to the role of the sales manager in creating change within a sales force. That’s a good thing: the role of the sales manager is absolutely critical to the process. They will need to walk the talk, reinforce new ideas, role-model behaviours, celebrate early wins, translate the ideas to make them relevant to their team, etc. But the most important thing is that they will need to be coaching their team members.

Because of the criticality of the role of the sales manager in driving sales results, as well as in building sales capability, through coaching, I am going to launch a piece of small scale research into current practice in Australia. I want to get a sense of what is happening out there, how sales managers are delivering coaching, how sales people are receiving it, and how organisations are supporting it.

At this point, it will be small scale, as I want to be able to bring results to share with the Australian sales community as soon as possible. It is likely that I’ll launch periodic small-scale research to follow-up on specific areas that come out of our initial quick dip.

I’ll be posting information soon about how to participate in the research, with both a qualitative and quantitative component.

SURVEY LINK: 

Here's a link to the quantitative survey. It is a VERY short survey that should take less than 5 minutes to complete. 

This is ONLY for business-to-business salespeople who have received coaching from their Sales Manager. 

http://svy.mk/11arMqj

Feel free to share this link with your peers, colleagues and friends! 

Building a proactive salesforce

A few years ago we were entering a large engagement for a business process outsourcing company. As part of the engagement, we did a number of interviews with their customers, key contacts in significant accounts. One of the interviews revealed a very interesting insight about our account, but also about what is expected of the modern supplier (or “trusted advisor” or whatever).

“They are terrific,” our account’s customer said, “Whatever I ask them to do, they do it flawlessly.” This is going well, I thought to myself. Clearly, our account is a great and much-loved supplier to this company. He had more to say, though.

“But, you know,“ he added, after I had given him some silence in which to think further about the situation, “in the seven years we’ve been working with them, they have never brought a new idea to me. By now, they know our processes better than I do. So they should be able to point out where I could do things better, more cheaply, etc. They haven’t done that.”

What started out as a very complimentary comment, one that you’d be tempted to put on your website as a reference, ended up as a consistent theme in our consulting work: just doing good work is not enough.

Today’s customers expect a supplier to be proactive, evaluating their business and coming up with ideas for how to improve it. And whether you call it being proactive, challenging, “creativating”, or any other term, that result is the same: if you don’t bring new ideas to your accounts, you’re letting them down.

Being proactive can be a little bit tricky, though. It is critical to maintain your core customer-centric sales philosophy: it should be about *them* and not about you. Any ideas should be focused on solving one of their business challenges, taking advantage of their opportunity, etc. To be successful, you must not be pushing your own product or your own agenda.

Proactivity comes naturally to some salespeople, but it can also be developed. Creating a structure can be useful, encouraging salespeople to be proactive, and even creative, in a structured and organised way. I’ve discussed in other blog posts specific tools that facilitate creative idea generation, and I’m sure I will in future posts as well. So, for now, we’ll those tools aside.

So what should YOU do?

How do you build a proactive sales team? Here’s a few ideas that I’ve seen work well.

•      If you have regular meetings with your existing accounts, include one agenda item that is outside the current project or process. Even if the meeting is a progress meeting, you can add one point at the end of the discussion that is focused on “Additional ideas” or similar. One client suggests that each quarterly review meeting must include at least one new business idea.
•      Schedule a regular meeting that is NOT about current work. One of our accounts requires its sales team to schedule one “Agendaless Meeting” per year. This doesn’t mean that there is no preparation, of course. But it signals to the account that the conversation is wide open, new ideas, and new opportunities. During the meeting, try to defer discussions about current work until the regular meetings.
•      Make sure that the internal team is meeting periodically, and include as many parts of the organisation as possible. Brainstorming with account teams is a great idea, and you will often find that your own team brings up ideas that you’ve not thought of for the account. Involve as many people who touch the account as possible, as they are more likely to bring new ideas. One of our office product accounts created a whole new business opportunity when a service person, who had been onsite to fix a hardware problem, noticed client personnel going through a tortuous series of steps to complete a process. It turned into a new service, and relieved a lot of pain of which the organisation wasn’t even aware.
•      Share new ideas internally. Those of you that know me know that I am not a fan of generic ideas or scripted solutions for customers. However, there is a lot to be learnt from good ideas that succeed at other accounts, and good ideas should be leveraged. When you bring the idea to another account, though, don’t forget to tailor it!

Encouraging a salesperson to be proactive can be tricky. As I said before, some just do it naturally. But with a bit of coaching and a bit of structure, even those who do not can start be a proactive, value adding partner to their accounts.

Does anyone else have ideas for how to increase proactivity – particularly in bringing new business ideas to accounts – in your sales team? 

Avoid generic sales presentations

Presentations. Oh dear. So often sales presentations stumble severely, focusing too much on the supplier and not enough on the customer.

I’ve seen numerous examples of companies forcing their sales teams to use the same presentation template for all of their accounts. At the heart of the concept is a good idea: customers *should* have a consistent experience of dealing with your organisation. There *should* be a distinct feel to your team, as differentiated from your competition.

However, what tends to happen is these good intentions disintegrate into a generic, self-oriented document that gives little thought to the specific needs of the actual client in question.

Last week I had an interesting conversation with one of our clients, who wanted to make sure that his salespeople were presenting solutions in a consistent way to all of their accounts. This makes some sense, of course. But the execution was terrible, and I’ve seen this before.

The *required*presentation deck ran something like:

• A cover page featuring their branding, their logo, their colours, and a small mention of the client
• Their business, their background, and where they are based
• A history of the brand, including the evolution of the logo (!)
• A map showing their sales offices around the world
• A map showing their production facilities around the world
• A photograph of their heritage-listed corporate headquarters building
• Etc…

In this standard deck, it was at least 8 pages before it got to the key business issues facing the account. Even worse, the client had been running training programmes to make sure that everyone delivered the first 8 pages exactly the same way!

While consistency is clearly important, you need to make sure that your salespeople are starting with the situation from the *customer* perspective. This is especially true if you have senior people in the audience. In the example above, you will have lost your senior attendees well before you even got close to the value that you can bring to them.

To be successful, start with the situation, and the business impact it creates. If your audience wants to talk about you – and they probably don’t – you can include your history, locations and a photo of your offices in the Appendix, in case it comes up.

Oh – and I’ll comment on this specific issue in later posts – you also need to *trust* (and upskill!) your sales team enough that they don’t need a script. It is possible to be both customer-centric AND consistent to the brand, but you need your team to be capable of executing.

So what should YOU do? 

• Make sure that all presentations, proposals, agendas, etc. start with the customer issue, not your organisation. From *their* perspective, what is the issue? Why should *they* care?
• Push your sales team to tailor the standard content to address the specific needs that have come up in conversations and research to date. If parts of the standard discussion aren’t relevant, allow your teams to not over them. 
• Coach your teams to focus on the things that really matter to the *account*, not to you. 
• Practice the core components and elements of the sales presentation so that it feels natural, and feels like something that you would say. You shouldn't be reciting a script! 

Create competitive advantage by splitting one buying criterion into TWO criteria

Recently I was doing a deal coaching session with a global market research company, strategising around a current opportunity for them. It was a competitive situation, where they were hoping to win the customer's business in a tight field of three other agencies. We frequently work with our accounts to build strategies to help them win important deals in situations like these.

In competitive situations, it is important to understand exactly the criteria that your prospect is going to use to evaluate the options. This may sound obvious, but it requires having actual conversations with the account; don’t assume you know what they are thinking. 

In this specific case, an interesting situation arose. We were looking at one specific buying criterion that was very important to the account, but where there was little difference between the competing suppliers. No one supplier could deliver that area more effectively than the others.

However, as I probed a bit, we discovered that, while it was true that all competitors were mostly equal, there was a small part of the process where our account had a distinct advantage. This sub-process would deliver better and more reliable results from the research, but it was an issue that the customer did not think of as a separate component.

For instance (and this is a made-up example) let’s say that one key buying criterion was the ability to Source Research Participants that matched the profile of the research. The customer felt that all the suppliers could do this effectively. However, let’s say that our account has developed a proprietary step in the process of finding participants that tends to yield participants that both match the profile AND are likely to Complete all of the Steps required by the research. In terms of Sourcing, there was no advantage, but in terms of “Completion” there was. The problem was their customer didn't think of that as a separate issue, and they lumped it all into Sourcing.

So we helped out our account to create a strategy for how they would split the issue into two criteria. They would acknowledge that all players in the field were best practice on Sourcing. But then they would emphasise Completion as a critical sub-component of that process, demonstrating both how important it is and proof of their expertise. They emphasised that Completion should be considered as a separate issue, not rolled up into Sourcing. Importantly, they emphasised not just their proprietary capabilities, but the business impact that would result – in this case better and more reliable results over the long term.

By splitting the one issue into two issues, they effectively introduced a new consideration in the buying process, one that was “hidden” within something that the customer was already asking for. This yielded a significant competitive advantage, even though the capabilities of the competitors were very similar.

What should YOU do?

•  -  Coach your teams to make sure that they really understand the criteria that your customer will be using. Validate that they are not just using assumptions, past experience or gut feel, but are actually having conversations with key contacts at the account.
•     Even where there seems to be no real competitive advantage, dig deeper to see if there is some sub-issue that you can deliver better than the competition.
•     Where there is competitive parity, split criteria into two issues, graciously acknowledging the parity in one of them, but emphasising a true competitive advantage and customer benefit in the other.

Building pain, before jumping to gain, when selling

I spent last week with one of our clients (I wish I could tell you who!), a business-to-business sales organisation that relies heavily on cold-calling (or at least lukewarm calling) as the front end of their engagement strategy.  I’m not here to comment on the merits or pitfalls of cold-calling. But my time with them did remind me of some key ideas that lead to successful selling, whether over the phone or face-to-face, whether transactionally or consultatively.

Organisations in this situation, like our client, often spend a lot of time and energy trying to hone the perfect pitch. In the old days, this often meant training the team to list off benefits of your solution, and to educate accounts as to why your solution was the best. In other words, lots of telling. If your key approach rests on these issues, stop here. You’ll need to reorganise your thinking to focus on your account, not you.

More modern organisations focus on identifying a potential client’s key Pain Points (or similar terminology), and then defining a way to explain how their product or service exactly addresses those. This is a huge step in the right direction – being customer-focused – and it was the situation we found at our client.

But this refinement still misses the mark for a successful customer-centric sales methodology: it is still fundamentally telling them about us. Ideally, sales people need to get their customers talking, and thinking, about their business, their needs, how they could change or revolutionise their process, etc. Even if you’ve been told to “challenge” your accounts, you need to get them to talk, to internalise, and to challenge their assumptions. You'll get there through questioning. 

Last week we focused on Pain Questions as a big part of the missing solution.  Sales teams were already asking about Pain Points, but then they jumped right into telling the account about their solutions. Anyone who’s ever been sold to by a persistent, overly assumptive sales person can tell you that this kind of telling is rarely successful.  

Pain Questions dig into the implications of the current situation, before moving on to the Gain or reward of fixing it. This can often help to build discomfort around the current situation by uncovering – and building – the consequences of not acting. This is done by asking questions, not by telling them, in order to help amplify the current situation. Use questions like, “What are the implications of that?” “How often does that happen?” “What’s the customer experience like in those situations?” etc.

We found, almost immediately, that the impact and effectiveness of the calls improved. Instead of telling the account why their solution was better, they listened to the specific issues facing the person on the phone, they asked questions that probed and built up the situation, and then they tailored future comments to address the specific issues and pains that they had just magnified.

So the key here is to make sure that selling organisations are digging deeper to uncover the key issues and the true implications behind them. Often, the really good question is the follow-up question. For instance:

Sales: “You mentioned that invoicing is an issue, how often are you finding that there are invoicing errors?”

Client: “About 10% of the time.”

Sales: “OK. And what is the experience, from a customer perspective, when that happens?”

The first question was a good one, and revealed useful information that can be used to help sell in our solutions. But the second one can really start to build pain – in this case strategic pain - for the account.

So what should you do with your team?

• -    Listen in to their calls to see your team is asking about the implications, costs, or consequences of the current situation, as opposed to just the existence or non-existence of certain situations. Coach them to ask questions and dig more deeply before jumping to the solution.
• -   At your next team meeting, get people to think about what questions might build pain at their contacts, instead of just checking to see if it is there. If they can pause long enough to build pain, their solutions will be much more intriguing. 

Understanding the Decision-Making Process: Early and often

A few weeks back a client of ours was working very closely with an internal contact to finalise a deal. They had been going back and forth with the account to finalise the details of the solution and the roll-out/implementation plan. Everything was sorted out, and the sale was in the sales team’s system at 100%. However, it turned out that while the customer contact fully believed that she had the authority to make the decision, other parts of the organisation had more than enough power to block it. In this case, IT was brought in as part of the implementation planning, and they blocked the whole thing.

The deal is now, essentially, back at square one, with the supplier needing to work with IT to understand the needs of IT, and to demonstrate the potential value creation for the organisation as a whole.

Clearly, this episode resulted in a lot of wasted time and effort, and we were brought in to look at the situation in terms of improving salesforce efficiency. I’ve seen it happen a few times at other accounts recently, so this is not a one-off situation. Especially in our post-GFC world, many organisations have changed the way decisions are made, and who has the authority to make them. The result is that salespeople waste a lot of time selling to the wrong people.

In my analysis and research, there are two typical pitfalls that sales teams fall into, both of which are easy to avoid:

1.       Not asking about the buying process early in the sales process. Successful sales people confirm very early in discussions what is the buying process, who needs to be involved, who really owns the process and, importantly, who makes the decision. Less successful people tend to find people who think the idea is interesting, and immediately start trying to craft a proposal.

To avoid this, build this step into your own process: once you have an opportunity to create value for the account, and the contact has validated her interest, ask about how decisions are made. It’s an easy step. Team managers can easily coach around this topic as well, by asking team members “Who makes the decision here?” Simple stuff!

2.       Not helping the contact to understand their internal risks. Later in the buying process, when you’ve been selected as the supplier, there is often still work to be done before you can get the account to a signed contract. Helping your contacts to manage their internal risks is a great way to add value to the client, even when it seems like the signature is imminent.

To do this, you can help them to think about the things that might stop their purchase progressing. There is a balance here, of course: you are not looking to introduce new risks and worries to the decision-making process that might scare them away! Rather, you are trying to open up the conversation to reveal their worries, and to help them think the situation through more effectively.

Consider using questions like:
·         Who else is involved in this decision? Does anyone else need to be on board?
·         Are their people or groups that could block your decision?
·         Have things changed in the organisation since the GFC? Are more people involved in the decision than before?

It isn’t always the case of a contact pretending that they have the authority to make a decision when really they do not. In fact, from my observations, that is usually NOT the case. So what we have here is a great opportunity to add VALUE for the customer, as well as improving our own efficiency and effectiveness. Going into the process with a positive, customer-centric approach is likely to produce results.

As with much of successful selling, it comes down to being comfortable enough to ask questions to open up discussion. In this situation, questions this can help to do two key things:

• Open up the conversation around what the contact knows about the process, to make sure they are sharing as much as they can, and
• Force the contact to really consider what needs to happen, internally, to get their decision through.

If you focus on understanding the decision-making process earlier in your discussions, you’re likely to improve your effectiveness and efficiency, and create value for the customer. Of course, don’t forget that things do change over time, so these discussions may need to happen both early AND often! 

Make sure your Value Adds actually add value!

The concept of including additional “Value Adds” in a proposal has come up frequently lately. In the interest of keeping this posting short (as readers have recommended!), I’ll address only one issue around Value Adds at this point: it is important to make sure that your client actually understands the value of what you are including.

This sounds like pretty basic advice; after all the word value is included in the phrase Value Add. But the key is to make sure that you can show what the specific Value Add means to that specific account, and then, to the extent possible, quantify it. I’ve seen many situations where a salesperson fails to do that.

Here’s a recent example: A salesperson for a technology company wanted to improve the overall value of their solution by adding some additional training for the operators. This was to be included in the proposal, as a bullet point under a heading of “Additional Value Adds”. The customer contact with final approval on the proposal, a fairly senior executive at the organisation, would have had very little idea what that meant, let alone the value of it to the organisation.

It turns out that this Value Add was about building new skills in the operators, beyond the skills required to operate the equipment (which were covered under "Training" elsewhere in the proposal). This would be of tremendous interest to the operator community, who view it as an opportunity to advance their skills, and to get involved in more interesting work within the company. If they had those skills, they could be more proactive about working with other parts of the organisation, and improve the workflow within the business. This could result in reduced administration effort, compressed development timelines, less rework, fewer errors, less frustration, etc. So clearly, this Value Add really could add value, but it was in danger of being sidelined.

To make sure that your Value Adds aren’t under-valued make sure you focus on three areas:

1.  1. Identify what the Value Add means. In the example above, there was the very real possibility that the Value Add would be confused with the training required to operate the equipment, thereby eliminating the additional value. Keep your explanations clear, concise and relevant, but if additional description is needed, make sure to include it.  

2.  2. Specify what it means to the specific individual(s) reviewing the offer. It is important to understand what your audience cares about. If the audience is the operators, discussing the opportunity to learn new skills and advance their career would have been extremely relevant. In this case, though, the audience is senior executives, and operators' career paths may be less compelling. We’ll need to translate the Value Add into business metrics that matter to management: improved efficiency, lowered costs, shortened development timelines, etc. Get the impact right for the right audience.

3.  3. Quantify the impact of the Value Add. It can be hard, but the better we are at quantifying the impact, the more compelling the Value Add will be. We could work with operators, and other departments, to possibly identify the savings from improved productivity, or reduction in waste. We might even model the impact of a decrease in employee turnover in the operator community. In this specific case, the salesperson was leveraging privileged relationships to get access to training that would cost thousands of dollars on the open market: another opportunity to quantify the impact!

Following these three steps can significantly improve the perceived value of your Value Adds, and improve your chances of success! Over time, you may even find that you require fewer Value Adds as you ability to show their impact improves...  

More on Commercial Acumen in business-to-business selling

In the past few weeks I’ve worked with a number of sales teams to refine the business cases that they were creating for own clients. While I’ve discussed Commercial Acumen before as a critical skill in post-GFC selling, it just keeps coming up, and I wanted to add a couple of additional insights to previous comments.

In past blogs, I’ve identified a difference between salespeople that can apply commercial acumen at what I called a Tactical level, versus a Strategic level. At the Tactical level, as salesperson rises above simple price comparisons to quantify the direct impact. On the Strategic side, the salesperson knows the client business well enough (and has the right skills) to cover the impact on multiple parts of the value chain, and, in particular, can link to Strategic priorities like revenue growth. I still think that distinction is right, and I continue to see this as a key separation.

To get to the Strategic level requires an understanding of your client’s commercial model: What are their drivers of revenue? How do they make money? Who are their target customers? How do they differentiate themselves from their competition? These are basic questions, but they influence how you can tailor the business case to the specific client (even if your offering is fundamentally similar across clients!).

By focusing on the commercial model of the client, you are more likely to uncover key areas where your product or service can impact those key levers of commercial success. In particular, being able to connect your offer to impacting customer or revenue growth can really help to set you apart from the competition. Suppliers often handicap themselves at this point in the sales process: they believe that the connection between their product and their client’s commercial model is too distant to even mention.

I argue that it is worth a try, partly because it could uncover significant value that you add, and partly because it will force you to better understand the client’s business, which may unveil more Tactical commercial impact!

For a corporate customer, for instance, you might focus on the value of incremental customers (e.g. How could your product help improve the client’s ability to convert a prospect into a customer?), or on the value of improving the client’s customer retention (e.g. How could your product improve their customer satisfaction?). Perhaps you can help the client to increase their internal speed to market; the value of launching a product one day (or one week) can be simply quantified.

For one account recently, let’s call them Alpha, we helped them to quantify their service to a potential client, we’ll call them FinCo. We applied strategic commercial acumen to look at a slight improvement in FinCo’s internal process within one part of their business. Alpha noted that their service might save a typical FinCo call centre worker about 15 minutes per week. The temptation at this point would be to look at this as a cost savings, but Alpha went further. That 15 minutes a week across the 40 person call centre added up to about 10 hours per week, or about 63 man days per year. Given that the average sales per person in the call centre per day was about $1,000, the solution added about $65,000 in revenue for FinCo. This is on top of the other savings arguments in Alpha’s favour.

Notice, by the way, that in the above example Alpha had to know what was really going on inside FinCo. This came not from guessing, nor even from using past experience. They got inside the FinCo business and had real conversations with contacts. Having your data come from internal sources can make those figures even more powerful.

Even in the Education or Government space, this commercial model idea – and the application of strategic commercial acumen - is an important one. I’ve been working with a few clients lately that shy away from this commercial discussion in the Government and Education space, saying that thinking commercially doesn’t apply. But that’s wrong: it absolutely does. And even worse, if all you’re doing is talking about cost reductions in these sectors, you’re missing out on the chance for a more valuable, more strategic discussion with the account.

A key consideration in the commercial model in the Education and Government sectors is the funding model. The way that the entity gets money is analogous to revenues in the corporate world. Government departments, or government-run organisations, all have budgets. And just like a private business, much of the department’s focus is on growing that budget year-on-year. Once you understand the underlying logic – whether it is the number of ratepayers or patients, the number of employees, or the volume of fines assessed – you can connect your offering to this. In our experience, organisations that sell to the government tend to miss this compelling argument in their pitches.

Education is the relatively easier of the two: whether public or private, a key top line driver is students, so if you can define how you can connect your product or service to attracting more students, or retaining them, then you are talking strategic commercial issues.

In a private school, the commercial model is much more similar to a corporation, but it’s interesting to focus on a few key drivers of revenue for a typical private school: students (and the fees they pay), fundraising (from parents and alumni), income from endowments (generally funded by alumni), and, in some cases, government grants.

The key message is: no matter what sector is your focus, think about value, not just at the Tactical level, but at the Strategic level. Push your teams and yourself to raise their commercial game above cost savings and process improvement, to higher-level impact. If you do, you position yourself as a much more compelling business partner, and you’re more likely to ultimately win the business.  

RFP processes: Becoming more open?

I’ve recently been writing quite a bit about business-to-business selling in the Post-GFC world, in other words, what has changed in sales since the advent of the economic issues that have plagued us since 2008. But some recent client work has reminded me of an important trend in B2B sales that is still occurring, though it may be obscured by a GFC-driven counter-trend.

For the sake of this discussion, let’s consider the situation where the sales organisation unexpectedly receives a Request for Proposal (RFP), or similar request to submit a proposed solution, from an account or potential account. The fact that the RFP is unexpected means that the selling organisation has not been working with the buyer to uncover and develop the need in this case. (Ideally, of course, a proactive and customer-centric salesforce would have been involved from the start, creating the opportunity and possibly even helping to craft an RFP, if an RFP is required. I’m sure I’ve written on that topic before! But we’re discussing the situation where we get the RFP later.)

In the 1980s and 90s, large organisations saw a huge increase in the number of purchasing decisions that were taken away from the business and given to a professional, formal sales process, often led by a purchasing or procurement group. The logic was clear: the company was more likely to get the best possible price in a competitive situation. Great steps were taken to remove possible bias, to ‘level the playing field’ among competitors. This generally meant that communication to the business during the sales process was cut-off. Any information would come from purchasing, and the conversation flow was uni-directional.

While this process was initially only applied to materials and product purchases, the late 1990s and 2000s saw this trend extend to purchases of services as well. Selling organisations, no matter what they were selling it seems, are now put through a controlled, formal selling process, without significant communication back to the purchasing organisation: proposals were to match against the specifics of the RFP and that was it.

This situation is obviously frustrating to a salesperson. Without access to those who will be using or interacting with the product or service, it can be hard to determine the right solution for the client. Companies that can have a major impact on their clients, but who might not fit the specific details of the request, can have a hard time communicating why they are, nonetheless, the right choice. And no organisation wants to be judged solely on price (well, perhaps one organisation per industry wants to be...). Sellers are forced into a formal, and somewhat blind, process of their own, trying to create a low-cost bid that ticks the right boxes. Or they discard the RFP.

Over the past couple of years, that trend has seemed to increase. Decisions that formerly were made by managers now are made by procurement. Decisions that used to be simple, are now made via a complicated formal process. The GFC’s focus on costs and cost savings has accelerated the above trend, and also has increased the number of third-party specialists in the purchasing process.

But there is another macro trend, operating in the background, one that began before the GFC. While many formal purchasing processes remain locked down and one-directional, we’ve noticed an increasing willingness of purchasers to engage in conversations, even after an RFP is released. A willingness to engage, that is, if the selling team makes the effort.

One of the key drivers in this effect is the buying organisation itself. After years of being told by suppliers that a blind tender process often results in a poor buying decision, many procurement organisations have recognised this fact themselves. The political pain they have felt from decisions that the rest of the business were not behind was certainly part of it. But, more importantly, many procurement organisations continue to become more engaged with the business itself. With more analysis into the past performance of previous purchases, the result is a buying organisation that is more interested in making the *right* decision, not just the cheapest one. So we’ve seen companies very interested in sitting down and discussing the RFP, the underlying need, and the key assumptions with suppliers. They don’t want to waste time, energy, and ultimately money, by making the wrong decision.

This is clearly a good trend for a consultative, customer-focused salesperson. But most salespeople have given up: once they receive an RFP, they immediately shift into Respond Mode, crank out a response at the lowest possible price, and sit back and wait. However, there is still plenty of room to be proactive, and to create value for the customer and the sales organisation.

One recent conversation (one of three or four that sparked writing this article) reminded me of the importance of being proactive in response to an RFP, and trying to initiate conversation. While trying to coach a salesperson towards the idea of going back to the issuer of the RFP to query some of the assumptions, the salesperson, “I suppose I could go and ask them if they would be open to discuss it, but 99 times out of 100, they will say no.”

I questioned his statistic, and asked how many times in recent memory he had done so. It turned out that he hadn’t for a couple of years. In this case, he went back to the customer, and, luckily, the customer was more than happy to open the discussion (I say luckily because, in this case, it makes for a much more interesting article). The discussions are ongoing, but he certainly stands a better chance of coming out ahead now.

For a sales team or manager, the action in response to this trend is quite simple: push back on RFPs that you receive. Ask questions. Request a meeting. Don’t *assume* that they will say no. The worst case scenario is they respond that the information required is in the RFP; you are no worse off than before you acted. Second worse is that any conversation that they have with you, or any answers that they give to your queries, also will be communicated to the other bidding parties. In this case, you’re still better off than before. And finally, the third worst-case scenario, is that the account engages with you, allows you to have a conversation about the issues and the needs, and you’re able to work effectively with the account.

Given the *cost* of pushing back on RFPs – almost zero – why not? Make it your company sales culture to do so, and you’ll be more likely to be successful. 

Fear of Discussing Price

"Just don't mention price. I did it once, but I think I got away with it." - a paraphrasing of Basil Fawlty.

I have been working lately with a few sales teams where the topic of discussing pricing during the sales process has come up. Or rather, the strong desire to avoid discussing price until the very last minute has come up. These teams have pushed back strongly against the idea of introducing pricing – in any format – into the conversation until the customer absolutely demands it.

And, I believe, their sales are suffering because of it.

In a customer-centric sales approach – where we consider what is going on inside the customer’s mind and their needs, not just our own sales process and goals – it is important to recognise that any buying decision is a complex and multi-phased decision. Successfully giving the customer what they need at that point will help advance the sale. But customers’ needs vary at each stage.

In the initial phase, when the client and the supplier (you) may still be working out what a solution might look like, or what the problem really is, the client organisation needs to become convinced that there is a big enough reason to change. The reason might be lost sales, operational inefficiency, poor quality, etc.

(For those of you who follow Imparta’s Creating Client Value approach, you’ll know I’m talking about clients in the Awareness of Needs phase.)

Once key people are onboard with the need to change, there generally needs to be an approval from someone higher in the client organisation, a Centre of Power, for the idea to move ahead. This does not mean that the supplier might be awarded the deal! At this point, the client is merely saying, ‘Yes, this is a big enough opportunity that it makes sense for my team to spend time and energy looking into it, to pick the right supplier and the right approach.‘

As we’ve discussed in previous postings, decisions are being pushed higher and higher in the organisation. But many sales organisations are not recognising this key fact, and their proposals at this point focus on technical specifications, company capability and generic suggestions of business impact. Fees and implementation costs are left out of the discussion; they fear that they will get locked into that price, even as the solution evolves with continuing discussions.

And that’s where these sales organisations lose out.

Clients at this point, in order to make a commitment to moving ahead, need to see clear business logic – a Value Proposal in our parlance. Again, let’s remember that this decision is being made by a more and more senior audience, so their interest in the details of the solution is likely to be much less than the overall impact on the business performance. So a successful salesperson needs to be able to talk about – and show quantified examples of – the business impact. Consider the strategic impacts – sales growth, improved customer retention, etc – as well as more tactical issues such as productivity savings.

This impact, though, MUST be coupled with the costs to get that impact. If you’re saying that your solution can help create $5 million in additional sales, it absolutely matters to the client whether it will cost them $4 million to get that impact or $1 million. And the costs should be complete – if there are implementation costs associated with the solution, then include them. Consider the impact of leaving these additional costs out: eventually your client will realise that they exist, and if you haven’t revealed them your trustability quotient is likely to be hampered.

Senior audiences expect to see Impact and Costs to be able to assess the total Value they’ll be seeing. Doing so will increase the speed of your sales process, and increase the likelihood that an account will commit to the idea and move ahead in their buying process. Lots of our accounts (before we start working with them J) have genuine opportunities that have fallen dormant because of their inability to present this simple Value = Impact minus Costs argument effectively.

I am NOT suggesting that a consultative sales person should pull out a price sheet early and often. The key point here is that price can’t be ignored, but the key corollary is that price must always be discussed with a senior audience in the context of impact. Price on its own shifts the conversation to discounts. When paired with knowledge of how your solution will impact their business, it can become a discussion of how to move forward!  

So, review your opportunities and consider which ones are at this point: key people within the business support your idea or solution, but you can’t get their boss – or their boss’s boss – to buy in. Make sure that the costs are all in there, and that you can show true Value, and you just might move it along!

Selling in the Post-GFC world: Commercial Acumen in the salesforce

Business-to-business selling in the post-GFC has been tough. Budgets have been cut, investments postponed, entire functions down-sized out of existence. Yet some selling organisations continue to be successful, while others have stumbled. I’ve been looking at why some firms have been better able to weather the storm than others, and will be sharing some thoughts over a series of articles.

One of the key drivers of success in B2B sales currently is the amount of applied Commercial Acumen in the salesforce. Successful organisations are much better at putting together a compelling business case for the client company, clearly demonstrating the value created by the decision to move forward. What I’m calling Commercial Acumen here is a combination of financial and business smarts that allows someone to generate a business case showing the client the clear difference (in profitability, or earnings per share, or EVA or whatever key business metric is important to that client) the seller’s products or services can make.

Commercial Acumen is important in this economic environment for reasons that all come back to the same theme: budgets are tight. Purchasers (whether business-led or procurement) are coming under immense pressure to justify any spend that they make. This leads them to require harder business cases from suppliers, or to simply not spend. There’s a lot of fear out there, and significant risks to the purchaser, and organisations that don’t address this will have trouble moving forward.

On a similar note, there is much more executive intervention in spending decisions than ever before. Decisions that previously could be approved at one level of the business now have to be made two or even three levels up. We’ve seen situations where business unit head approval is even required for any interstate travel ($50 on Tiger!). Selling organisations need to recognise that their proposals are being looked at by a much more senior audience than before. This audience has completely different, and more commercially sophisticated, expectations.

From my observations, there are three levels of Commercial Acumen in a salesforce:

1.    

1.  Price/Performance. Realistically, this is the absence of applied commercial acumen. A salesperson here focuses on lining up specifications against the performance requirements, and demonstrating price leadership. This price focus leads to the occasional win, but tends not to build a long-term relationship.
2. Tactical. Organisations at the tactical level of commercial expertise demonstrate a focus on the operational impact of their products or services. They tend to be very good at the cost-out part of the equation, showing how they can help save the client money above and beyond the price of their offering. Strong and useful relationships can be built with purchasers when operating at this level.
3. Strategic. At the top of the pile is Strategic, where salespeople integrate multiple perspectives into an overall impact statement. A notable difference from the Tactical level is being able to look across multiple functions within the client to identify impacts and savings. Another key difference is the inclusion of strategic priorities of the client, things like growth, increase in market share, customer retention and the like.

Moving from Price/Performance to Tactical is a huge and important maturation for a business. In fact, companies that have not been able to do so over the past 5 years or so are probably no longer with us (or operate in a truly commoditised space). This was true even before the GFC.

But the GFC has shown that firms with that can operate at the Strategic level of applied Commercial Acumen are much more likely to keep growing, or, in some situations, even accelerate growth. These firms are more likely to get approval to move forward with their ideas, more likely to build strategic executive partnerships, and more likely to be retained next time around. I’ve worked with companies to put together Value Proposals (a simple business case model) that emphasise this Strategic element, including a food ingredients company that emphasised the impact on the client’s customer retention, and a document automation company that focused on a client’s incremental improvement in customer acquisition. The Strategic perspective can actually change the entire conversation from a selling conversation to a business conversation.

How to get there? Jumping from Price/Performance to Strategic directly is tough, and I certainly haven’t seen it happen. The first focus needs to be on incremental movement, from one level to the next.

To get to Strategic from Tactical takes a series of concerted efforts. Having a structured Value Proposal template is one step, where the template emphasises looking beyond the obvious, and beyond the current contact, both horizontally and vertically. And, of course, you’ll need to develop some basic finance skills and a comfort level around discussing these topics within the sales team .

Oh, and you’ll need to engage with the client quite intimately to get this right. An organisation can’t reach the Strategic commercial acumen level from the outside. To succeed you’ll really need to be sitting down with the client to put together the Value Proposal with their input and active participation. But that’s a topic for another day!