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Success is a moving platform

May 22, 2009 in Sales Relationships, Strategy

Do you have the wrong sales team delivering your sales strategy?

Ask yourself the follow the questions:

  • How has your strategy and /or market place changed recently?
  • How have you seen the role of ‘sales’ change over the last few years in your industry?
  • How do your sales people compare to your competitors?
  • How do your sales people need to sell now?
  • How is your product offering behaving in the market place now? Was it once exclusive and now a commodity?

The definition of a ‘good’ salesperson is driven by many possible needs. Those needs are a function of industry standards, changing market conditions, competition, corporate strategy and culture, personalities, past experiences, just to name a few.

In addition, many organisations overlook the shift in their products or services from being customised and exclusive to a commoditised entity and the impact this has on their sales force and sales efforts.

So it’s not just how your sales people behave that can affect sales, it’s also how your product or service behaves.

Let’s take a look at computers

For many years (in the late 1980s and early 1990s) computers were highly priced, exclusive products sold by highly priced, exclusive sales people.  These sales people were specialists, experts or advisors selling into the big end of town because these were the only businesses who could afford computers back then.

However, as:

  • the cost to manufacture these products decreased making them more accessible and cheaper to buy, and
  • customers education, knowledge, awareness and experience with these products and processes increased

The style of the sales people required to sell computers changed.

Now you can go to small or large retail outlets and buy a computer off-the-shelf from retail sales people (most of who are paid much less than their highly priced, exclusive predecessors).  Or easier still, you can buy custom built computers online at Dell, thus eliminating the traditional type of computer sales person all together.

Daniel Pink wrote, amongst other things, about the commodisation of products and services in A Whole New Mind and specifically how we need to look at creating value beyond product.

This is why more thought needs to be given to how a business translates its sales strategy into sales action.  You need to make sure the current products and style of sales people you have are matched accordingly.

If customer’s product or service education level changes (i.e. they become more sophisticated), and there is change to the product and access (i.e. online), there will be a change in your sales force requirements.

However, some products which can behave as commodities in their own right can become part of a complex sales solution and need sales people who are specialists, experts or advisors.

Let’s look at Business Banking

Business Banking is really an essential service for any business, however the products on offer are often standard and commoditised in their own right.

So what is a business banking customer wanting from a Business Bank?

It depends on the relationship.

Current research indicates that many want ‘ease of doing business’ and ‘value for money’.  The research also shows that many customers are not as sophisticated and savvy in knowing the ‘ins’ and ‘outs’ of  Business Banking and therefore many would like to rely upon the expertise, advice and support from their business banker.

However, many Business Banking providers have not developed, trained or supported their Business Bankers to be specialists, experts or advisors.  Most customers still go to their accountant for that advice and then use Business Banking products rather than extracting the possible value from their Business Banker.

As with Business Banking, there is often a great opportunity to capitalise on the potential long-term, in-depth customer-supplier relationships even if you have a range of commodity products.

I suspect many opportunities for further profitable sales sit untapped in many businesses because misalignment with strategy, product and sales people fit.

Knowing your market, where your products sits in isolation and in combination, and the types of sales people you need to have to deliver your strategy is critical.

So as you prepare for the next Financial Year you may want to review the sales force you currently have and see if they will stand up and deliver what your business needs in FY 09/10.

I will talk about this next time in “Creating your ‘Ideal’ sales team”.

Sincerely, your advocate for selling the right way.

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The cost of poor sales selection

May 14, 2009 in Recruitment, Sales Assessments, Sales Management, Sales Talent

Have you ever done the math on how much sales recruitment costs you, especially when you get it wrong?

If you are like most managers then chances are you haven’t.  So let’s consider the costs, overt and covert, involved in sales recruitment.

If you don’t know it already, sales recruitment is one of the toughest assignments around.  I know this firsthand, as I was in this role for over 8 years with a leading consultancy and recruitment company. During this time, I interviewed about 8,000 sales people face-to-face in the technical, industrial, medical, and scientific industries.  Remember, this is not counting all the resumes I screened manually as my experience was pre the internet and we had to do everything manually – no ‘word search’.

My time in sales recruitment gave me a great grounding and honed the skills to select good sales performers but not everyone has had the chance to practice.  It was a fascinating social study on what makes a great sales performer. Upon reflection, it was a catalyst for my research into illuminating and defining the elusive qualities that make for highly successful sales people and the development of IP specifically in the Australian Sales Competency space.

It also led me to map out and demystify the sales recruitment process by putting in place relevant content and a structure people can follow.   What this structure and the right selection content do is place control back into the hands of the managers who are responsible for recruiting sales people for their businesses.   It also made me plainly aware of the costs involved.

The problem is that, for most managers or business owners, sales recruitment happens sporadically and too many managers still use unstructured recruitment practices that are the least predictive of sales performance.  Most are just winging it, relying on gut feel, and never getting enough experience to give them something to fall back on when they need it.

It’s recruitment by hope, recruitment by chance.

Taking this ad hoc approach adds to the cost of sales recruitment because even if you get it right you don’t know why you got it right, therefore making it difficult to repeat the process.

With everyone being so focused on cost management its also important we do the math on the cost of sales recruitment and the cost of getting it wrong.  We do this so that when you look at your sales recruitment you can make sure your actions will give you a better return on investment and that you hire the right sales people.

Any action we do has a cost (monetary, energy, time, etc.) associated with it.  Whether that action propels us to profit from it or costs us more than we intended is the issue at hand.   Getting sales selection wrong can cost you more than you have probably imagined.

What are the OVERT and COVERT costs associated with these issues?

  • Keeping a poor sales performer on too long who is not producing and not having a better performer to replace them (Note to self : you should always be on the look out for top sales performers, keep a list)
  • Sales territory vacant for too long
  • Poor fit: Not selecting the right type of person for your business culture, strategy and task
  • Taking too long to make selection decisions thus losing good potential recruits
  • Little or no structure to your sales selection process
  • Using the wrong recruiters to get you the right people (sadly too many recruiters do not know what a ‘good’ sales person looks like)

All these equal lost revenue, lost profits, lost market share, lost customers relationships, customers business drying up, loss of reputation, internal disharmony, team issues, etc.

Let’s now look at it in stark terms:

Case study: A sales person who earns a base of $60,000 per annum plus extras stays with a Company for 3 months and doesn’t work out:

Overt Financial Costs
(based on a conservative estimate)

  • Advertising and Recruitment Agency costs = $10,000+
  • Candidate travel costs (if applicable) = $500
  • Induction Training costs = $5,000 (in-house and/or formal/external training)
  • Salary and benefit costs = $15,000 plus super, work cover, etc.
  • Additional costs (car/car allowance, phone, travel, etc.) = $3,000
  • Severance pay (2 weeks notice) = $1,600
  • Manager’s time to recruit 40hrs @ $60/hr ($100K salary) = $2,400
  • Administration costs: $2,000
  • Sales lost due to poor performance (2.5 times salary is the average) = $37,500

Estimation of Overt Cost Total for 3 – 4 months = $67,000

Then add:

Covert Financial Costs

  • Potential litigation costs = ?
  • Lost sales opportunities due to vacant territory = ?
  • Manager’s coaching time = ?
  • Team morale = ?
  • Customer loyalty = ?
  • Impact on Reputation = ?

While I may have missed some things or overestimated others, the math clearly shows that getting sales recruitment wrong is very costly.

I suggest you do an audit and check out where you have made the most of your actions and where you may need to tighten up.

Remember that its all in the preparation and execution of the right activities and make sure you act wisely and in your best interest.

If you want further information how to how to structure your sales recruitment practices go to  Getting Sales Recruitment Right

Sincerely, your advocate for selling the right way.

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Start small and really network

May 7, 2009 in Communication, Marketing, Prospecting

I have attended my fair share of networking events and more often than not, I find that I do not get any quality time to network and begin the process of building viable business relationships for the future.   I find the time allocated to speak with people and start to get to know them is often too short, coupled with too many other distractions.

When attending these networking events I find I usually get the most value out of listening to the key note speakers.  If I am fortunate enough to strike up a meaningful conversation in between the breaks with someone I am seated next to then great, but all too often there is no real focused time to listen and understand each other on a one-on-one level.

I aware there is plenty of advice on how to get the most out of your networking at these types of events and the advice is often very good so don’t stop going.   I want to make it clear that I am not criticising the style of these networking events – they are what they are and you can make the most of them.

However, I have been on the look-out for other ways to really connect, understand, and collaborate with people who are interested in leveraging collective networks, especially in this current market.

I had the privilege the other day of being invited to a very different networking event.  It was small in scale, focused, purposeful, coordinated, quiet, and for me, very meaningful.

The concept is a Multiplier Lunch.
Multiplier Lunches are a sandwich lunch held for four businesses at a time, one of them being the host company who invited me.  All four businesses are non-competitors, and my case generally in the services sector, and are unlikely to require each other’s services.   However, all work in similar markets.

The central idea is to act, where there might be an opportunity, as referrers to each other.

The purpose of the lunch is for the group to get to know what each other’s businesses do so that we can be effective referrers for one another.  Each attendee has half an hour to tell the group about their business and to take questions.

Typically, each business representative will talk for around 15 minutes and take questions for the remaining 15 minutes.  This works well. It is a very informal gathering and things are kept relaxed, so people do not prepare any formal presentations.  Everyone was respectful of allocated time ensuring that the lunch finished on time.

I found this to be a liberating and enjoyable, alternative networking experience!
Sincerely, your advocate for selling the right way.

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Creating the right environment

April 30, 2009 in Ethics & Values, Sales Management

I was running a ‘train the sales trainer’ session with some experienced, professional Sales Managers the other day.  The session I ran is designed to equip these managers to run mini sales training modules of as part of our sales fitness programs.  Many manages are not trained facilitators and so we make sure we give them the information they need to set up an effective learning environment.   All was going well until we came across the content entitled “Creating the right learning environment” which is a practical guide about what you need to prepare and take into account when setting up your room environment.

I happened to mention (and wrongly assumed) that this was pretty straight forward and was familiar to most professional people and we could do a quick scan and move on.   However, one of the Sales Managers informed us that this was not always the case as the previous sales manager, whom he had recently taken over from, used to run some of his sales meetings and one-on-one performance reviews at a restaurant chain known for its scantily clad, big breasted waitresses.   And occasionally he decided to run these sessions at the local strip club as well.  Needless to say the sales manager in question did not last very long in his role.

I had thought (and hoped) we had progressed somewhat as professional business people, but clearly some people are still stuck in the 70’s and 80’s where similar stories were more common place.  I really didn’t think it happened today but clearly I was wrong.   I would be interested to know if this still goes in some industries today (I hope not but may find that it happens more than I had expected).

So rather than assume everyone knows how to set up the right environment I thought it might be prudent to remind us all of the key things we need to consider when setting up:

  • A training session
  • A coaching session
  • A performance review
  • A  sales meeting

For learning, feedback or a meeting to take place effectively you need to create a comfortable and safe environment. For this to occur you need to plan and arrange the environment and resources you will need for your session or meeting.

Whether you are training or coaching on-the-job or in a training room, giving feedback or holding a meeting, there are a number of things you should consider before you start (most, if not all, will be relevant):

  • How many participants will be involved?
  • Is the size of the location adequate?
  • Is the location available?
  • How will tables and chairs be arranged?
  • Does the area have adequate lighting?
  • Is the area quiet enough?
  • Is the temperature comfortable? Is there adequate ventilation?
  • Is the location accessible?
  • Is the location private? (able to be closed to the outside world)
  • Do you know where all the facilities are, for example, the toilets?
  • Does the location have enough power points? Do you know where they are?
  • Are training aids available?
  • Are there any OH&S requirements you will need to consider?

As a sales manager, even if you are providing coaching advice to a salesperson in the car after a client meeting (which often happens) please consider the advice above.  For instance having the radio on while giving feedback or giving very specific feedback on a difficult area for development while the person in question is driving is probably not a good idea.

The manager, coach or trainer who is committed to accelerating the learning process of their people must attend to creating an optimal learning or meeting environment which also includes it being safe on all levels.
Sincerely, your advocate for selling the right way.

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Exceptional Prospectors

April 22, 2009 in Call Reluctance, Prospecting, Sales Skills, Success

  1. “My most important appointment is prospecting and I do it first up every day.”
  2. “I qualify all leads I generate and have an approach to handle those that aren’t ready yet.”
  3. “People appreciate a professional sales approach and are able to make an informed decision to say ‘yes’ or ‘no’ because I clearly explain, up front, my reason for contacting them using a customer centred approach.  They need only say ‘no’ if they’re not interested.”
  4. “I have a list of categorised prospects or influencers and a set approach for each category.”

Is this what you say, and how you feel and act about prospecting?

These four points about an exceptional prospector support our findings from over 40 years of international empirical research into prospecting behaviours.

Over the past 14 years, my team has conducted thousands of psychological assessments and interviews with both managers and salespeople about their prospecting and sales behaviours.

Our research has consistently revealed that salespeople often experience their greatest difficulties, dissatisfaction, and anxiety at the prospecting stage of the sales cycle.  Meanwhile, Sales Managers repeatedly express their frustration that they cannot find salespeople who are competent, confident, and motivated to prospect for new business.

Prospecting requires sales people to establish contact with people who might buy your products or services. Whether it is phone, face-to-face or group prospecting, inbound or outbound, nothing gets sold until you get in front of and/or talk to potential buyers.

Definition of Prospecting

Prospecting is looking for, qualifying, and pursuing potential sales opportunities with new and existing customers and appropriately developing viable prospects into profitable sales.

40 years of International Empirical Research in Prospecting
(Research Reference: Behavioral Sciences Research Press)

The research showed that the main predictor for success in sales is the amount of contact initiated with prospective buyers on a consistent basis!

Across industries, the sales people who sell the most are those who are most willing to get out and get in front of prospective buyers on a consistent daily basis. They sell more because, regardless of their talent, experience or knowledge, they always have new people to sell to.  They are visible and they manage their visibility so that customers know who they are and what they can do.

The hesitation to initiate contact with prospective buyers on a consistent daily basis is more responsible for the failure of competent, motivated, capable, revenue generating sales people than any other single factor. Nothing else even comes close.

Despite content or quality, no training can earn back what it costs until and unless sales people initiate contact in sufficient numbers with new and existing clients.

It is a reality that in order to achieve and exceed sales targets through attracting new business, a significant part of the process is going to come down to how well a sales person is able to apply themselves to the prospecting process.

So Prospecting Comes First!

Prospecting is not the only part of selling, or even the most important, however if you want to grow your business it must come first.  Unless a sales person will consistently prospect for new business, what difference does it make if they are empathetic or knows the product?

The Good News

While most sales people, by far, experience their greatest difficulties, dissatisfaction, and anxiety at the prospecting stage of the sales cycle, the good news is that many of their issues can be overcome and usually boil down to 2 key areas:

  1. Lack of training in how to prospect effectively:  most people are thrown in the deep end and not given adequate training in clear processes and tools to show them how to prospect effectively.
  2. Misconstrued beliefs and attitudes around prospecting: leading to people generating fear-based thoughts, and responses towards prospecting – in other words they avoid prospecting because they are scared of it.  These attitudes and subsequent behavioural responses are entirely learnt and can be easily unlearnt with the right support.

If you are at all concerned about your prospecting effectiveness, don’t worry you can address your concerns by using the right approach:

  • If you don’t know how to prospect but are not scared to have a go then get skills training specifically covering a structured prospecting process and techniques.
  • If you are afraid to prospect whether you are trained in a prospecting process and techniques or not then you would benefit from gaining insight into your beliefs and attitudes around your hesitation to prospect.  (This can be achieved with purpose built assessments and qualified feedback)

If you want advice, coaching or skills training on prospecting process and techniques call us on (+61) 03 9532 7677 or email contact@barrett.com.au

If you want to read more about effective prospecting go to Peak performance in prospecting

Sincerely, your advocate for selling the right way.

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