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Why we need Sales Superheroes

March 28, 2014 in Business Acumen, Sales Trends, Uncategorized

Why do we need Sales Superheroes?

This question and its answer became evident at the inaugural 12 Sales Trends Annual Business Breakfast hosted by Barrett.  Focusing on what to do in light of the 12 Sales Trends for 2014 – The Thinking Sales Organisation, business and sales leaders from a wide range of industries gathered to listen to James Thomson, Companies & Markets editor of The Australian Financial Review, and Peter Finkelstein, Barrett’s Head of Sales Strategy discussed how we can navigate our way in 2014 and beyond and stay ahead of the game by turning thinking into action.

This is the first of two articles that will summarise what was presented to a full house of engaged and interested leaders.

James Thomson presented some very important market facts we all need to take into consideration and then directed us towards the future showing us the various consequences of our actions, or inactions more importantly. Here is what he had to say:

James-Thomson-Speacking-At-Barrett-BreakfastSo what’s going on in the market place at present?

Some of the key take outs from his presentation:

  • We shouldn’t underestimate the psychological impact of the GFC.  While it was some 7-8 years ago, the economy, consumers, and businesses have not shrugged it off.
  • Since the GFC we’ve seen things change dramatically. Many people have become savers and seem to value experiences over goods. The free spending ways are far behind us.
  • Consumer and business confidence is bouncing wildly, accurately reflecting the mood of the market.
  • Business conditions are a function of trading conditions such as profitability, sales, cash-flow, margins.  It’s a decidedly mixed picture, running below zero for much of the last 18 months.
  • There is a similar picture for confidence, which has actually been quite strong at times; however, there has been another turn down since the middle of last year.
  • Business conditions, business confidence, and consumer confidence show certain fragility, which makes the economic picture extremely confusing at present.

Consumer Confidence

Why are consumers feeling so fragile? James pointed out that job security is always the biggest driver of poor consumer confidence.

But why are people so worried if the fundamentals are so good?

If we look at the current state of the market and employment it looks pretty good:

  • Interest rates at record lows with rate rises six to 12 months off
  • Unemployment at 6%
  • We’re 23 months ahead on our mortgages
  • House prices are rising
  • Australia’s economy has been growing for 23 straight years

It’s a pretty good picture – and certainly as we’ve been told a million times before, a much better picture than in Greece or even the US.  So why are we still scared of this?

australian-moneyJames says it’s because people are smart. They do understand the underlying fragility in the economy and, more importantly, they understand how the companies they work for are really travelling. They read the news, they see the profits, but they are holding tight to ensure they can play it safe.

The best way to get a picture of how the corporate sector is travelling is through company profit results. What did the last interim reporting season teach us?

  • Of the 138 companies from the ASX 200 to report half-yearly earnings, more than 65% said profits had increased – the best result since 2009-10
  • In total, we saw a 19.0% lift in net profit to $36.5 billion
  • Take out the big guys, profits were up 32.9%
  • 50 of the 138 companies lifted their cash holdings, which rose 35% to $87 billion
  • 76 companies lifted their dividends, with aggregate dividends up 7.2%.

Sounds impressive and looks positive.  All that cash being held over and record profits.

 BUT…

James points out that almost to a person, our CEOs are cautious; you could put some of this cautiousness down to expectation management, but our corporate leaders are reporting very lumpy conditions, poor confidence, with decisions being delayed.

So unfortunately markets remain short term focused and growth is hard to find.

Which begs the question – how are these guys producing those impressive rises in profits, those big cash piles and increasing dividends?

Cost Cutting!

making profits through cost cutting

The answer is that they are cutting. Cutting jobs, cutting offices, cutting plants, and cutting back on investment.

James states that in some cases, this is being forced on them not just by market conditions but also structural change in their industries – think manufacturing or media, where technology is either replacing certain tasks or just forcing businesses to restructure.

The point is, this profit growth isn’t being driven by massive sales growth, and that’s a worry.

James points out that the bigger worry is what is behind these twin trends of cost cutting on the one hand, and cash hoarding and higher dividends on the other.

He sees two reasons:

The first is that fragility of the consumer, business and markets.

The second…. The rise of the self managed super fund (SMSF)

The self managed super fund (SMSF) is such a huge trend that it is starting to have a real impact on the way these companies do business.   Retirees want income to live on, so when they buy shares, they want them to come with a strong flow of dividends.

These SMSFs now account for 30% of all superannuants and that is rising. It was mentioned that as the population ages these SMSFs are likely to rise to be 50% of the superannuation market in the next few years.

Companies are being forced to listen to these SMSFs and are making decisions to keep them as investors, and attract more SMSFs on board in order to push their share prices higher.

But James’ worry is when you’re paying big dividends, what you are potentially not thinking about is…

The future!

James raises the issue: If companies are hoarding cash and increasing dividends today, is there a risk that they are not investing in the major initiatives that will deliver profit tomorrow?

While every good business has got to cut their cloth to suit their market and market conditions…

strategyNo company ever cut their way to growth.

Therefore, the question begs: What happens in 10 years when no new markets have been developed, and no great new products have been invested in?

There are some worrying signs. For instance:

The first estimate for investment in 2014-15 is $124.9 billion, down 17.4 per cent on the previous year and the biggest fall on record.  (SOURCE: ABS)

So what can we do about it?

This is why we need sales superheroes.

We need our great leaders looking towards the future seeing, creating, and finding new opportunities, new markets – a diverse market place that can withstand system shocks.

We need businesses and business leaders  managing costs effectively whilst simultaneously creating high functioning sales operations with salespeople out there winning new business and driving expansion that will allow investments to be made and the cycle  goes on.

As James pointed out, obviously it won’t be easy, but if we boost sales, we take the focus off cost cutting as our only mandate and we create resources for investments in the future.

And that’s clearly what we need in this country – investment in great new ideas, new markets, new industries and in viable sales operations to help us move beyond mining into something even better.

Stay tuned for part 2 next week featuring how we can use the sales trends to our advantage.

 

You can follow James on twitter @MrJThomson

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

The History of Sales Methodologies

October 11, 2013 in Business Acumen, Complex Selling & Transactional Selling, Education in Sales, Sales Culture, Sales Excellence Acadamy, Sales Research

Have you ever wondered just how many sales methodologies are out there and which ones work and which ones don’t?

Maybe you haven’t given much conscious thought to this subject but then again maybe you have.  Either way, if you are in sales or run a sales team or business and want to be more effective and successful it’s critical that you know what sales methodology will work best for you and your customers.

Unfortunately, the business world has been littered with more dubious sales methodologies than there are effective ones. Our business, at Barrett, is to help our clients improve their sales operations, and so we are constantly examining the various sales methodologies on offer and in use.  We need to be able to decipher what will work and what will not.  That is why for the better part of a year Dr. Peter Finkelstein, Barrett’s Head of Sales Strategy, has been researching the history of sales methodologies of the last 200 years including the current day.

Barrett_whitepaper_OCT13-200x284His research has culminated in our latest whitepaper: ‘The History of Sales Methodologies – why some work and other don’t’ (which you can access for free). It’s a fascinating read and if nothing else it will help you make more informed decisions about what sales methodologies work and which one is best for you and your customers.

So what did Peter find?

Well, you may have noticed that every now and then a new book on sales and selling appears in stores that claim to contain the secret to sales success. Many of these books (and their associated sales methodologies and training programs) promote themselves as being the very latest, revolutionary approach to selling that, according to the authors, will change the organisation’s performance (and its salespeople) and miraculously improve sales, profits and success.

The research raised questions: Are these sales methodologies are really new? Do they really represent a revolution in selling? And do they actually work or not?

In short, whilst many different sales methodologies have been introduced in the last 40 years, most are simply repacked versions of sales methods developed decades ago. The only real revolution in sales methodology (that the research could identify) took place in 1968 when Xerox Corporation created an internal sales training program and methodology to combat still competition in the photocopying industry.

Don Hammalian lead a team at Xerox Corporation that ultimately developed an entirely new approach to selling – a sales methodology that became known as Needs Satisfaction Selling. Prior to this milestone in the development of sales professionalism, there were many attempts at developing a sales method. Whilst some had limited success, if only for a period, most were flawed and couldn’t sustain the rapidly changing sales climate.

Needs Satisfaction Selling, encouraged salespeople to interact with their prospects and customers and involved them in the sales process. Up until then salespeople were taught to tightly control the sale and direct the focus of the sales interaction – essentially viewing prospects as the target of their endeavours. Now with the advent of Needs Satisfaction Selling salespeople were encouraged to ask what was important to buyers and then to introduce benefits of products and services that satisfied those needs.

Today, needs satisfaction, as a sales methodology, may not seem revolutionary. But when one considers that until that period selling methods were based on the use of verbal tricks (Barrier Selling – a method of asking a series of leading questions to which the response was logically “Yes”, and then trapping the buyer into agreeing to say yes to a request for an order); the appeal to emotions (Mood Selling – amongst other tactics, the use of children to pull at the heart strings of customers as the salesman pleaded for the support from a customer in order to earn enough to feed his child); Pyramid Selling (in which customers were incentivised with discounts to demonstrate their fondness for a new gadget); Formula Selling – a canned presentation which took no notice of the customer as a person, but simply spewed out a pitch in order to catch customers unaware;  and many other methods, one can see why needs satisfaction was so revolutionary.

The use of Information

help-customers-with-information-overloadWhilst, in the early days, salespeople were the primary source of information for customers, the role has changed. Today salespeople still have a role to play regarding information, but instead of being information providers, salespeople now help their customers sift through the information overload to find what is most relevant and accurate. That means,  as it was proposed in 1916, salespeople need to develop the trust of their customers and use their knowledge to help customers make the right choices.

Customers also expect salespeople to have a reason to meet (“will you help me save money or earn more?”). And most sales organisations and sales professionals have already responded to that call successfully.

Needs satisfaction selling and then, about a decade later, Neil Rackham’s SPIN Selling – with its heightened focus on involving the customer in the sales process, sharing control and asking questions – encouraged salespeople to not only invest time to understand the customers’ needs and expectations, but to also present customers with options that challenged their traditional way of thinking about problem solving.

These developments of sales methodologies – i.e. Xerox’s needs satisfaction and Rackham’s SPIN Selling – were real revolutions. Since then, the so called sales methodologies that have been introduced are merely rehashed wisdom of the past used to promote some new sales training course instead of offering real innovations in sales and selling.

Despite the range of the latest ‘new’ sales offerings, what is consistent then and now is that customers expect salespeople to come to them with new ideas and to present these with conviction, prepared to be challenged and willing to have robust discussions. All trust-based relationships involve robust, healthy, mutually respectful discussions. And that’s the point – mutual respect, not salespeople who challenge buyers because they can, but rather who interact with their customers to find the best solutions for them.

The point is simple – in the modern paradigm the role of the sales professional has changed. Now even more than when the concept was first developed in the 1970’s, salespeople have to be consultative. They need to be business people who can sell, rather than salespeople who understand business. They need to have the skills to establish and fast track trusted relationships with a range of decision-makers, in a variety of organisations where they can facilitate a fair exchange of value.

Since the 1968-1980 period the most revolutionary process in selling and one that companies have still not managed to fully come to grips with, is Solutions Selling.

it-is-not-about-you-it-is-about-the-customer-smallThe true Solutions Sale is about the customer, now fully empowered, well informed and with ample choice, working with specific suppliers / service providers whom they can trust. It is about those sales organisations that are learning how to be sufficiently collaborative with other suppliers who can work with them so that they – as a team – can develop a best fit solution.

When sales professionals and, just as importantly, the organisations they work for, provide their customers with a range of meaningful benefits, including cutting down on wasted time, reduced risk and providing solutions that directly benefit the buyer, we will have successfully migrated to what solutions selling is truly all about – providing customers with a fair exchange of value that meaningfully benefits their businesses. This is the real next revolution in selling.

For the full whitepaper and table of the History of Sales Methodologies, click here.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

7 differences between Sales and Marketing

September 6, 2013 in Business Acumen, Collaboration, Education in Sales, Marketing

If any business is going to thrive in the 21st century it’s vital that we all have a clear understanding of how Sales and Marketing can work effectively together in our businesses. For too long, there have been unfruitful turf wars between sales and marketing teams. For too long, too many people have been fooled into believing that ‘sales’ lives under marketing’s mandate. And for too long, too many people have been calling ‘selling’ marketing which it is not.

We need to redress these issues once and for all and properly define Sales and Marketing.  So why have these disagreements and misconceptions been allowed to fester for so long?

Firstly it’s worth reviewing some of the findings from Peter Finkelstein’s 2012 Whitepaper, “Why Marketing as we know it is dead”:

traditional marketing has failed‘According to an article in Harvard Business Review (August 2012) traditional marketing – i.e. advertising, public relations, branding and corporate communications – has failed. And we at Barrett concur. Traditional marketing (which has become little more than an expensive, very often valueless mass communications methodology) has failed. As far as mass communications is concerned not only has it failed, the Internet and social media have surpassed anything the conventional marketing professionals have to offer. Marketing has been at death’s door for well over a decade. It’s just that marketing professionals don’t want to recognise the reality!

There are three pointers that prove this…

First, buyers are no longer paying much attention to marketing messages. Studies show that in the decision-making process traditional marketing communications techniques have very little credibility or relevance. Buyers are checking out product and service information in their own way, often through the Internet, links to business associates and through direct interaction with supplier organisations – many of whom communicate using smart-phone technology. And they are doing it in their own time, at little cost.

Secondly, in a devastating 2011 study[1] of 600 CEOs and decision-makers, around 73% (438) said that marketing officers (CMOs) lacked business credibility or the ability to generate sufficient business growth. Around 72% of respondents in the study indicated that they were tired of being asked for funds without being given any reassurance that the funds would generate incremental business. A  significant group, 77% (462) are no longer interested in any talk about brand equity that can’t be directly linked to recognised financial metrics. That leaves only a handful of around 130 CEOs (21%) who are not necessarily dissatisfied, or satisfied with marketing‘s efforts.

The two key questions that need to be asked are…

  •    Why has marketing taken such a credibility beating?
  •    As important, why now is sales finally getting the professional recognition it really deserves?

Whilst over the decades of continually changing buying patterns and behaviours sales has made the necessary adjustments – from Snake Oil Selling in the 1890’s to the sophisticated Solutions Selling of the 21st Century – marketing has continued, in the face of the increasing change, to hang on to its outdated 1948 model. And whilst the Internet is turning sales and marketing on their heads and rapidly changing the playing field – one click at a time – marketing is still struggling to make the move away from the old formula of Product, Price, Place and Promotion (i.e. the 4P’s) – developed by James Culliton[2]. And though marketing has recognised the growing power of the Internet its practitioners have made the fatal error of trying to apply old models to new buying patterns. The result (as the Harvard article pointed out) is a disaster for marketing.

sales-and-marketing-via-social-mediaThirdly, in today’s increasingly social media-infused environment, traditional marketing techniques not only don’t work, they make no sense. Trying to extend the 4 Ps to a world of social media simply misses the mark. Even FaceBook and Google can tell you all about it. It finds itself mired in an ongoing debate about whether marketing on either FaceBook or using Google Ads is as effective as it needs to be.

The reality is that the Internet, smart-phones and social media have changed the world of sales and marketing. The interesting thing is that both sales and marketing professionals saw the changes coming. Marketing did what it has traditionally done when under threat – resorted to a PR campaign to come up with “inspirational names” for doing the same old thing (e.g. relationship marketing, out-come focused branding, life-style communications and a myriad of other names used to disguise the use of the antiquated 4Ps model) in the hope that these would encourage people to believe marketing was up to the challenge.

Sales, on the other hand, has simply adapted the selling techniques to accommodate the avalanche that the Internet and social media represent in the way people buy. In turn this has bolstered the credibility of sales, at the same time as marketing are struggling to regain some vestige of credibility.

From a sales perspective, professional salespeople have learned that they needed to break the umbilical cord that has given them so much comfort in the past. It’s no longer up to marketing to generate leads for sales (which salespeople tend to decry as poor quality any way); it is no longer marketing’s role to create invitation lists to networking functions (that salespeople complain is not with the right people). Nor is it necessary for marketing to invest in expensive collateral and printed brochures that sales really only use as a crutch for a lack of product knowledge. Now these activities and many more are being performed jointly by effective sales and marketing teams. Teams that work collaboratively to engage with their buyers in a more holistic manner.’

sales_and_marketing_wordsSo in a 21st century world what are some of the differences between Sales and Marketing?

Marketing is…

1)       Marketing is one to many.

2)       Marketing tells the stories (company, product, etc.) to many people.

3)       Marketing looks after the brand’s reputation

4)       Marketing needs to keep the stories circulating and resonating with the target markets using the company’s plumb line (the business of the business) as its central reference.

5)       Marketing analyses the big data.  Marketing brings you the average result not the specifics.

6)       Marketing studies what experience customers expect when they buy or try a product, service or solution. That means reading their digital footprint and understanding their on-line chatter as much as it does focus group discussions. Marketing looks for new metrics about consumer clusters and grouping. On-line groups are markets of the near future as more and more people cocoon themselves and shop less

7)       Marketing should not promote special prices and discounts, instead replace these with special offers, focusing on delivering greater value – more bang for the buck is the new mantra and greater value with fair exchange is the principle of pricing today – not cost plus as it has been in the past.

Sales is…

1)       Sales is about one to one

2)       Sales is where our business becomes real for the client. It is where the stories and brand come to life.

3)       Sales  develops relationships. It’s relationship driven

4)       Sales looks after individuals.

5)       Sales deals with the ambiguities and the details of each person. It cannot be averaged.

6)       Sales analyses the behavior of the prospects and customers whom they deal with on an individual basis. Sales professionals talk to their customers about the joys of risk free offerings that help them realise their goals and objectives. They tap into their buyers’ FaceBook, LinkedIn and other digital pages to gain a deeper understanding of what experiences each individual customers want.

7)       Sales moves away from discussing price and discount, instead replacing these with discussions about total cost of ownership which includes price but extends to include deliveries, warranties, support, training and the other contributing things that are delivered as part of the purchase. Sale engages with customers to understand what risks they face when making a purchase and then learns how to position their companies as risk free alternatives.

The one thing Sales and Marketing must share in common is the company’s ‘plumb line’ and its stories. From many people to the individual, the central plumb line: the business of the business, needs to be consistent and help each customer connect in a meaningful and specific manner that is relevant to their situation and their view of the world.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au



[1]     London-based Fournaise Marketing Group, 2011  – A Study of Global Marketing Effectiveness

[2]     “Marketing Mix” was coined in an article written by Neil Borden called “The Concept of the Marketing Mix.” He started teaching the term after he learned about it from an associate, James Culliton, who in 1948 described the role of the marketing manager as a “mixer of ingredients”

Why addressing Risk is 3 times more important than the benefits

August 28, 2013 in Attitudes & Behaviours, Business Acumen, Education in Sales, Neuroscience in Sales, Sales Psychology, Sales Skills

Plenty of time and effort is put into talking up the benefits of our products and services in a selling situation. Sales people often focus on why the benefits are important to our clients and how our client will be better off if they buy from us, etc.  This has been the mainstay of sales for years.

effort-required-brochure-designThink of all the time, effort and money that goes into meetings, brainstorming sessions, designing and creating glossy brochures and marketing materials (hard copy and virtual) to define and promote the benefits of what we do and offer.

Think of all the time and effort that goes into training sales people in being able to memorise and recite these benefits.

The common thinking in business today still focuses on our sales people knowing how to talk about the product’s (or service) benefits to differentiate themselves and supposedly making selling easier. But the client or prospect usually has something else on their mind especially into today’s turbulent markets.

A vital piece missing in the puzzle for sales people when it comes to the client’s decision making in the buying process is RISK. Addressing the Risk factor is critical yet Risk is rarely or poorly addressed by sales people when selling.  Often afraid to raise the matter for fear of upsetting or offending the client, or forgetting to talk about risk altogether, or not knowing how to talk about risk, sales people are at risk (pardon the pun) of losing sales if they do not address this important area.

Why? The human brain is wired to prioritise risk or danger above everything else.  If a prospect or client cannot feel safe with the decision they are making they are likely to avoid making that decision altogether.  Even if you present all the benefits that will  improve the effectiveness and efficiency of your client’s situation, if you do not discuss what will happen if they  don’t go with you, or if the perceived risk to change as too high then they will not move forward with the salesperson or the sale.

Work done by the only behavioural psychologists to be awarded a Nobel Prize for Economics – Tversky and Kahneman, proved that the brain is geared to first assess risk then benefits – in that order. Moreover, they also proved that if the benefit isn’t at least three (3) times greater than the risk, buyers will reject an offer.  In essence, they proved that people are happier when an expected tragedy doesn’t happen, than when an anticipated benefit doesn’t occur.

Which is why Risk is three (3) times more powerful in the client’s decision making process than the benefits.

Sales people need to be able to talk about Risk; the consequences of moving forward or not.  If we are going to address our clients’ priorities with great benefits we need to address the risk of not taking action as well.  Not all risk is real either.  Risk can been an illusion too. That is why it is critical that as sales people we do not shy away from exploring what risk means to our clients and prospects – real or imagined. We need to help them separate fact from fiction.

Risk ManagementThis means we need to be able to ask questions that uncover what our client means by risk. We need to discuss what the consequences are if they do not move forward. If we look at the following three definitions we can see that we need to address all three areas if we are to have an effective discussion with our clients about what they value and what we all need to do to move forward if we want the sale to happen.

  1. Effectiveness – how much better can I do? (from the client’s perspective)
  2. Efficiency – how much more can I do? (from the client’s perspective)
  3. Risk – what will happen if I don’t do it? (from the client’s perspective)

Getting clients or prospects moving, taking action, making decisions is more often than not about addressing the Risk factor.  As sales people we need to learn to not only talk up the benefits but learn how to talk about risk.  That can make all the difference.

Remember everybody lives by selling something.

Author: Sue Barrettwww.barrett.com.au

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