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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

Customers are in control of the buying process

May 23, 2013 in Attitudes & Behaviours, Complex Selling & Transactional Selling, Sales Results

In December 2012, we published the 12 Sales Trends Report for 2013 and released a brief summary of each trend. This month we are focusing on the Sales Trend “Customers in control of the buying process”.

It is good practice for salespeople to control the sales process. At least that is the conventional wisdom driving the way salespeople behave. Salespeople see themselves as experts, educators and advisors. They see their customers as ignorant and anxious recipients, waiting for their wisdom. The reality however is vastly different!

Customers aren’t waiting for salespeople to call on them. In fact recent studies show that most if not all buyers actually resent salespeople assuming that they understand their needs and expectations. In addition, buyers are making it harder for salespeople to meet them because they don’t want to be treated as ignorant, nor do they want to meet salespeople who are trained to feign interest in their customers.

main-social-media-iconsMore and more buyers are doing the pre-purchase work themselves. In both B2B and B2C sectors more buyers are turning to their networks or the Web for as much as 70% of the purchase decision before calling on salespeople. And one cannot blame them. Most salespeople do little more than regurgitate the company’s story. They meet with buyers and pretend to be interested in understanding the customers challenges, but they neither ask enough questions to gain a deep enough understanding, nor do they have the well rounded business acumen needed to understand the implications of the issues and construct a meaningful solution. Worse, beyond their limited product knowledge they aren’t really in a position to advise customers.

Interestingly, when salespeople do show an interest in their customers; when they take the time to ask quality questions and then listen to the answers, they get all the time they need to understand the buyer and then to make a pitch for the customer’s business. Genuine solutions providers find it easy to get an initial appointment and get the responsiveness they expect after having made a pitch.

Instead of fighting the inevitable shift, organisations should be looking at how they can change, before they lose even more control. Buyers today put more importance on the genuine interest salespeople show when they explain how customers can extract value from a purchase than an explanation of how to make a purchase. They expect salespeople to learn where they are on the purchase journey and then adapt their style – from educator to facilitator – to the buyer’s position on that continuum. These days, selling is about the journey rather than merely the purchase.

Remember everybody lives by selling something.

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

PS: Here‘s the link to Peter Finkelstein‘s talk at Swinburne University’s Business Forum this week. Peter talked about  Customer Centricity  

Are you paying salespeople enough to sell well?

February 14, 2013 in Attitudes & Behaviours, Brain Science, Complex Selling & Transactional Selling, Sales Driven Organisations, Sales Talent

Are you paying your salespeople enough to enable them to focus on selling and not worry about where their next paycheck is coming from?  Because if salespeople are constantly worrying about when they are going to get paid, how can they sell well?

For many years, unlike most other salaried employees who can rely on a regular weekly/monthly pay check, salespeople have often been required to live hand-to-mouth – making sales and waiting for their commission or bonus to supplement their living income.  Often the commission or bonus comes in monthly or quarterly bursts, however there is no guarantee of what money salespeople will make each month.  Worse, there can be arguments and struggles with companies as to what they should or could be paid. 

thinking about one thing only

thinking about one thing only

Earning a decent income for their efforts is never far from salespeople’s minds and if times are tough it is usually the only thing on their mind. Obviously this obsessive focus on income can lead to all sorts of issues, not all positive.

Imagine that you are a salesperson and in a good year earn anywhere from $80,000 to $130,000 per year gross.  Imagine too that you are also paid a low basic salary (let’s say around $40,000 a year) and the rest of your income comes from commissions or bonuses from selling.  Imagine too that your salary structure means your company recovers what it paid you as a basic salary out of the total amount you earn each year.  

Like all of us, you have living costs to account for such as mortgages, daily living expenses, family commitments etc..  Over time you develop a lifestyle around earning around $150,000 per annum – which is a combination of yours and your partner’s part-time salary.  You know that you have to work hard to sustain your lifestyle. And you are. You are making contact with lots of prospects and clients but the market is tight and sales are hard to come by. As a good salesperson you are performing well but the specter of a tight market is playing on your mind – it’s distracting.  So, if your partner lost their part-time job and you are the sole bread winner in your family, money is likely to be tight.  Now imagine how you feel not knowing what will be in your next pay check!

This is a common scenario for many salespeople.   

Think about  what those salespeople are focused on – is their mind in a good space of safety and reasonable certainty, where they can think clearly and make sound decisions, or have they reverted to flight, fight or freeze mode, where they are becoming fearful about their future, worried about future income and how to pay their bills?   In the salesperson’s mind are they saying: “ I know markets go through ups and downs. I am doing all the right things. It’s tough but I have a full pipeline of opportunities and some will definitely come through?” Or are they in a space that says: “I can’t see myself getting out of this. It’s really tough out there and I’m so worried about my family.  Where do I start?”

Ideally the mature, self aware, straight thinking people manage their thoughts in the positive. But most people adopt the latter mindset and in so doing, they inadvertently start to prioritise their own interests over those of their customers. There is the possibility that they may start to engineer sales in their favour. Perhaps cutting corners or not being as thorough.  It’s survival instinct in play!

distress by kristen diefenbach

distress by kristen diefenbach
(click to see more)

A major inhibitor to achieving optimal long term success in anything, including sales performance is being in a distressed state. It reduces one’s ability to bounce back from adversity, make effective decisions or manage ourselves. Being under constant pressure to achieve results (e.g. sales targets), with no consideration given to a stable income can quickly lead to poor quality decision making, poor overall performance and unhealthy life practices. The resulting negative behaviour then contributes to the prevalence of poor sales results.

When we live a life under constant distress we are unable to engage the frontal cortex of our brain, because our emotional energy levels are drained away and the unconscious part of our brain runs the show. We live on “auto pilot”, in a constant state of distress. If that part of the brain concerned with basic drives, emotions and short-term memory (i.e. the hippocampus) is damaged through such prolonged stress we can become even more negative in our view of issues starting a vicious, almost self-fulfilling cycle.

With selling becoming more complex, demanding that we make more effective use of cognitive (reasoning) skills of salespeople, one of the best moves organisations can make is take earnings off the table as an issue.  This doesn’t mean having no bonuses or commissions. It means moving the earning base from a low level (on average 40% fixed and 60% by way of bonuses and commissions) to a more stable 90% base salary with incentives to top that off.

What research shows is that for simple, routine tasks – which aren’t very interesting and don’t demand much creative thinking – rewards can provide a small motivational booster, without harmful side effects. In short if you want people to (for instance) stack boxes more quickly, offer a bonus to those who stack the most in the shortest time and to the standard you want. As long as the task is simple and mechanical, bonuses work to lift performance.

However if the task or situation involves, even rudimentary cognitive skill, – i.e. where one has to come up with ideas or solutions, possibilities or plans – then a larger reward leads to poorer performance.

Translating this to sales, simple transactional sales that are taking place via the internet leave most salespeople out of the equation. The rest of the sales spectrum – 100% of complex and most of B2B / complex B2C selling – requires salespeople to deal with solutions, consultation, problem solving and prevention, creativity and collaboration. All of these tasks require cognition.

Research highlighted in Daniel Pink’s book Drive – The Surprising Truth About Motivation outlines this research in detail. This short 10 minute video gives a very good summary http://www.youtube.com/watch?v=u6XAPnuFjJc.  

In his latest book, To Sell is Human, it also shows that the big commissions and bonuses have been part of the sales paradigm for many years may well become something of the past.

Here is the bottom line – if salespeople are living in fear, worrying about their next pay check, they cannot think effectively, fix and solve problems which means they are unlikely to do a good job.

freeloaders are not tolerated

freeloaders are not tolerated

Whilst money is important, not everyone – even many salespeople – are motivated solely by money.  If we want high functioning, high performing salespeople we need to take the worry of money off the table. Sure we need performance measures in place and there is no suggestion that freeloaders are tolerated. Instead allow your salespeople to be great at what they are paid to do, and that is find the customers with whom they work with to find, solve and prevent problems and in the process, make money and profits for the organisation.  In his latest book – To Sell is Human – Daniel Pink quotes Microchip’s vice president of sales who  summed it up well when he said: “Salespeople are no different from architects, engineers or accountants.  Really good salespeople want to solve problems and serve customers.  They want to be part of something larger than themselves.”

A great philosophical approach to appreciating the value of salespeople not bogged down with concerns over money is to recognise that companies pay salespeople well, that’s why they make money. By taking the worry of money off the table organisations are already seeing the shift in attracting quality sales staff who can deliver good, if not excellent sales results with much less stress for everyone concerned.

When we give salespeople the space and the appropriate salary to be really effective and accountable they perform at their best. When that occurs, great things happen.

Remember everybody lives by selling something.

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

Ego is a dirty word in sales & sales management

February 1, 2013 in Attitudes & Behaviours, Coaching, Communication, Competition, Complex Selling & Transactional Selling, Emotional Intelligence, Resilience, Sales Management, Sales Talent, Wellbeing

Having a big ego is often associated with the sales profession.   For many years the supercharged Alpha male, 600 lb sales gorilla has been the poster person for successful salespeople.   And then there is the larger than life sales manager who charges in to save the day by taking over the sales call, making the sale and demonstrating to everyone present just how much better he is than the salesperson.  With stories like these swirling in the ether, it is often assumed that a big ego is the key factor that makes salespeople and sales managers successful.  This assumption is wrong on so many levels.

Yet you hear, even today, that business are still looking for ‘hungry, aggressive sales performers’. 

The truth is that these supercharged, salespeople; for all their so called sales success and supposedly legendary status, actually fall well behind the real sales superstars in terms of achieving high level of sustainable sales results.

leading based upon fear

leading based upon fear

As for the domineering sales manager… they cause more harm than good; they take over the conversation to demonstrate their superiority. By showing off in the sales call and calling it coaching they make everything about themselves and leave salespeople withering on the side lines as they suck all the ‘ego air’ out of the room and tell their salespeople to ‘just buck up and be like me’.  What a joke! 

By contrast the best performing salespeople; the real sales superstars, are the open minded, curious, collaborative, team oriented, open to learning and aim for partnerships on every level type of people. These superstars have humility too – a direct contradiction to the behaviour of the ego driven salespeople. The equivalent enlightened sales manager shares the same qualities as their salespeople and, as this manager knows, success can only be as good as the success of their salespeople.

These sales managers bask in the glory of their sales teams’ success, not in their own.

So why do these ego maniac images prevail when we know that the opposite is a better approach?

We all know selling is a competitive profession; everyone is competing for the time and attention of their customers, trying to get in before the competitors.  There are tactics, strategies and power games; and ultimately people’s jobs and livelihoods are on the line if these things don’t work out.  Fear is never far away from the mind of a salesperson or sales manager.

 An out of control ego is all about fear.  It is all about survival!

If a business has created a climate of fear around selling and salespeople’s jobs and livelihoods are at risk, then there is likely to be lots of unhealthy egos at play. Often shielded by bravado (another manifestation of fear) many sales teams can look quite dynamic and ‘normal’ on the surface. But dig a bit deeper and there lies many distressful stories of survival.  We know that in times of life threatening situations (or in the case of many Western salespeople, when their life styles are threatened) self interest will prevail and unhealthy egos will prevail.

To get that time and attention with the prospect or customer salespeople do need the skill, commitment and courage to contact and follow up on opportunities, knowing that they could get knocked back at any time.  So, yes, there needs to be a certain degree of mental toughness, resilience, a thick skin.  However an ego driven by self interest and fear will never get as far as a person who can effectively weigh up their interest with the interests of their company and their clients and find the right path for all.

The same applies for effective sales managers.  They know that to get the best results they should work with and through people, not around them or instead of them. Good sales managers are self and other aware, thoughtful, respectful and respected, well prepared, and know what constitutes good sales performance. This means they can coach to the specifics as these relate to each person and where that person is, on their sales journey to excellence.

Regrettably too many sales managers get promoted to their position without the training needed to be fully effective as sales managers and coaches.  As a result, they often function at their Peter principle and their fear (of operating at a level beyond their competence) causes them to take control of the sales calls, dominate customer interactions and generally behave more like the Alpha male and 600 lb gorilla, than the effective leader, mentor and coach they should be.

what are you afraid off?

so, what are you afraid of?

So, if you or someone you know has an overly active ego that gets you/them into trouble in sales or sales management situations here are some questions to consider:

  • Are you currently letting fear hold you or your sales team hostage? If so what are you really afraid of?
  • What would happen if you got rid of fear as the overriding motivating factor for achieving sales? How would that change the dynamic of your sales approach or sales team approach to finding and winning new business with existing or new clients?
  • What would happen if you put your pride in your pocket and listened to the real needs of your clients and/or sales people instead – gave time and attention to their needs; seeing the world from their perspective? And then what would happened if you worked together to create viable solutions for everyone?
  • What if you have someone listen to you and really hear what concerns you are having; what your priorities are and what you want to achieve?  How would you feel when they took you seriously and then looked at how they could assist you in achieving your goals?
  • How would it feel to put confidence back in your people by letting them do what you employed them to do and that is… sell?

Don’t let fear, and by default ego, drive your sales career or leadership style.  It’s not a long term strategy for success.  It will only end in tears and that is not what people want for themselves or we want for you. 

By the way if you have hired the ego driven, supercharged alpha salesperson and they are wrecking havoc in your business you may also like to read Why hiring and keeping the 600lb sales gorilla is a mistake

Remember everybody lives by selling something.

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

PS You can get a Sneak Preview as well as purchase and download the detailed 49 page report of the 12 Sales Trends for 2013 now to see which trends will have the greatest impact on your sales optimisation efforts in 2013.   In the meantime you can download our past trends here for free.

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