May 052019
 

Many salespersons have heard the term ‘value proposition.’ What does it mean? Why don’t two people agree on the meaning and definition of the term? Is it because no one has bothered to define it? Is it because it means different things at different times? Is it that due to laziness everyone wants to think what they are doing in the name of ‘proposing value’ to customers is the way to do ‘value proposition’? Perhaps others believe it is all irrelevant.

In this instance and for the purpose of modern selling we are speaking about showing that the TCO (Total Cost Of Ownership) is less than the benefits gained. Let us think of TCO in terms of simple cost (the cost of the air conditioner, software, apparatus, whatever). As such, if we can prove to the customer that owning a solution saves them money (and maybe time and maybe number of errors and other factors) the salesperson has a decent shot at making the sale.

Photograph Credit: Lukas

For this to happen the salesperson must:

Have access to the customer and its processes and workflows. Incidentally, not being given access is a good indicator of where the sales process, and its likelihood of success, resides.
Be able to leverage this access to count, calculate and put a figure (value) against how things are happening now pre-automation, pre-efficiency gained, pre-effectiveness garnered. With me so far?
The mathematics begins now. The seller must quantify the existing workflow and contrast it with the (hopefully) lesser cost of the solution. In other words, if the solution costs $100,000 and the value gained is $200,000 then there is a net ROI of $100,000 or 100%.

Here is an example I shared elsewhere recently that I paste here to demonstrate the sample math:

 

  • Our software module costs $20,000. However, to take the minimum and smallest possible scenario, they have 1 person spending 2 hours/day doing something manually or inefficiently (say shuffling paper from the warehouse to the desk, reviewing it, approving it and then delivering it to their finance department…).
  • This person is paid $40/hour. That is $80/day, which is $1,760/month, which in turn is $21,120/year. So in one year they have broken even with our software (and we didn’t even place a value against the person doing other work once freed from this task or the elimination of potential human errors).
  • Over the 5 years they run this solution they could realize a 400% ROI!

 

This is but an example, but it should apply to any enterprise sale.
The above is important, but sellers need to remember that no matter what humans buy based on emotion and only justify against logic with either a formal process or against a set of data later.

 

*Things that need to go away: Thinking of selling as asking customers questions like ‘Is this a good time to move forward with project ABC’?

Jun 052016
 

Does anyone need reminding that when we say a successful salesperson should have attitude, we are not taking about bad attitude. We are talking about something else.

Sales is there to align customers’ stated or latent needs with goods or services.

Here comes another pushy, rude and annoying salesperson who is doing exactly what gives the worst of the profession a bad name.

Vacuum salesman stays until 1am, leaves pile of dust

Assertiveness and persistence win. They should be coupled with the abovementioned alignment. Stunts like the one pulled by the vacuum salesperson are a black mark and unfortunately hallmark of someone who does not have a good product and is not expecting to return or repeat business.

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*Things That Need To Go Away: Pushy Salesperson Who Lie

Mar 142016
 

Wikipedia defines a Product Manager’s role as, “investigates, selects and drives the development of products for an organization, performing the activities of product management.” These activities include researching intended demographic, the products offered by the competition and how they fits with the company’s business model.

Product managers are the bridges between the company’s line items, developers and sales and marketing.

The job is both becoming more simple and more arduous at the same time. The advent of Internet and sources of research and communication at one’s fingertips have made the collection of data almost seamless compared to days of yore (a.k.a. 20 years ago). The same efficiencies have made the market that much more fast-moving and prone to shifts.

Elsewhere, the buying process has changed drastically. Buyers come to the table much better informed, less dependent on sales and marketing. The old spectrum and funnel definitions and directions do not apply. In such an environment it behoves any company to use the job function closest to the market and its customers. Who are these mystery people? Why the sales team of course.

This is why it is such a surprise that in an informal survey of my contacts in sales and sales management the grand total number of companies in which there existed a formal process of communication between sales and product management was…. One.

The market is more competitive, products are commoditized, customer demands and appetites are changing and changing more rapidly and alignment is minimal or one-way at best.

Should product management at all companies not have a formal, standardized and consistent standard for using the sales team as the company’s canaries in the mine so to speak?

Sales need product management’s assistance and input. Product management needs input from the individuals who are on the front lines and most exposed to customers.

Does your company have a formal sales-to-product management process?

*Things That Need To Go Away: Product Managers Who Have No Time For Sales

communciate udnerstand support

Jan 112016
 

Several years ago I wrote about Not Competing On Price. Sales organizations are in an unenviable state of affairs where competition is more fierce than ever, pressure on sales margins is unrelenting and, due to both information overload and borderline fantasy marketing by sellers, customers are either blind to what sets you apart or, more likely, do not want to pick up enough cues, which would set you apart from the competition.

I say “more likely” because customers are in fact more informed than ever. Partly as a result, Gartner believes that buyers see their interaction with sales as their least valuable part of their buying process.

How should organizations and sales departments respond? Put another way, the question is, how do organizations and sales departments differentiate themselves enough to hold a competitive edge? The answer should be simple. Have a better product and convey the strength to customers already suffering from cognitive dissonance. Easier said than done of course. Where it exists sales must know it and articulate it. Among other things a sales process must become

  • Better aligned to the contemporary buying process, which means not being strict about the pipeline and funnel milestones as defined in your CRM
  • Offer more domain knowledge,
  • A much better understanding of vertical KBRs is a must because you would want to align it to the customer’s purchase
  • Moreover, support and maintenance are tangible factors that remain dissimilar across companies.

Notice that, given our dilemma, these are still non-product differentiators. To keep our feet firmly planted in reality we are not going to see sales managers measuring their salespersons differently. Why? Wall Street, Bay Street, whatever quarterly measuring street.

Where a competitive edge does not exist the price pressure is even more acute.

What to do when a customer sees you as a commodity? What to do when a customer sees you as one of many? The answer is ‘disruption.’ A seller has to disrupt current customer thinking through one or more of the below:

  • Know yourself. If you cannot educate your customer to your differences then you are at a disadvantage. Do you have superior communication and articulation? Either way, you must get better. Do you have valid reasons, experience and stories? If so, maximize their utility. Importantly, be careful assuming that your customer’s knowledge of you is perfect. What they may know may not match what you know. Check and compare.
  • Know your competition. Educate your customer on the competition. Do you know their limitations? Do you know how they are processing their sales strategy?
  • Know your customer. This includes their hot buttons, preferred relationship parameters and interaction style preferences and big picture. The last item implies that the seller could go beyond the point solution and make truly constructive suggestions to customers. The triangulation of engineering, marketing and sales becomes more important than ever. Is this wishful thinking? Quite possibly. Selling organizations are as resource and time challenged as buyers. However, the extra effort and fastidiousness is worth it.

All products being roughly equal, or being perceived as such, something has to give. It will either be the price or your non-product differentiators.

*Things That Need To Go Away: companies and sellers who cannot articulate why they have a raison d’etre.

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