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Author: Mark Boundy

Are you happy with how much you're selling...and how much you're selling it for?  Improving both means getting your customers to perceive the value your offer provides them.

Do you know what value you provide for your customers? Don’t feel bad. According to McKinsey & Co., only about a quarter of directors on big company boards could describe their company’s value.

And yet, the purpose of a profitable business is providing more value to a customer than it costs to deliver.

Mark brings over three decades of sales, marketing, and corporate leadership experience to his clients all around the world.  His wide-ranging experience has given him a unique perspective into

Creating corporate cultures centered on customer-perceived value.

These cultures are built for long term success, increase customer satisfaction, employee engagement, and yes, increase shareholder value.

Mark uses simple tools and a common language of customer value you can use throughout your organization.  He has developed tools, training, an upcoming book, and coaching skills to make it easy to integrate.

If your company works in the business-to-business arena, we can combine world-class sales methodologies with a value-centric culture shift.  When sales, customer service, marketing, product development, engineering -- every aspect of your company –has a clear line of sight to "customer value ", your entire company can become value focused.  Visit www.boundyconsulting.com or contact Mark at mark@boundyconsulting.com, or 602.374.3020.|Are you happy with how much you're selling...and how much you're selling it for?  Improving both means getting your customers to perceive the value your offer provides them.

Do you know what value you provide for your customers? Don’t feel bad. According to McKinsey & Co., only about a quarter of directors on big company boards could describe their company’s value.

And yet, the purpose of a profitable business is providing more value to a customer than it costs to deliver.

Mark brings over three decades of sales, marketing, and corporate leadership experience to his clients all around the world.  His wide-ranging experience has given him a unique perspective into

Creating corporate cultures centered on customer-perceived value.

These cultures are built for long term success, increase customer satisfaction, employee engagement, and yes, increase shareholder value.

Mark uses simple tools and a common language of customer value you can use throughout your organization.  He has developed tools, training, an upcoming book, and coaching skills to make it easy to integrate.

If your company works in the business-to-business arena, we can combine world-class sales methodologies with a value-centric culture shift.  When sales, customer service, marketing, product development, engineering -- every aspect of your company –has a clear line of sight to "customer value ", your entire company can become value focused.  Visit www.boundyconsulting.com or contact Mark at mark@boundyconsulting.com, or 602.374.3020.|Are you happy with how much you're selling...and how much you're selling it for?  Improving both means getting your customers to perceive the value your offer provides them.

Do you know what value you provide for your customers? Don’t feel bad. According to McKinsey & Co., only about a quarter of directors on big company boards could describe their company’s value.

And yet, the purpose of a profitable business is providing more value to a customer than it costs to deliver.

Mark brings over three decades of sales, marketing, and corporate leadership experience to his clients all around the world.  His wide-ranging experience has given him a unique perspective into

Creating corporate cultures centered on customer-perceived value.

These cultures are built for long term success, increase customer satisfaction, employee engagement, and yes, increase shareholder value.

Mark uses simple tools and a common language of customer value you can use throughout your organization.  He has developed tools, training, an upcoming book, and coaching skills to make it easy to integrate.

If your company works in the business-to-business arena, we can combine world-class sales methodologies with a value-centric culture shift.  When sales, customer service, marketing, product development, engineering -- every aspect of your company –has a clear line of sight to "customer value ", your entire company can become value focused.  Visit www.boundyconsulting.com or contact Mark at mark@boundyconsulting.com, or 602.374.3020.

Categories
Best Practices Investing Marketing Personal Development Sales

The Time Value of Selling Value

You are probably aware of the time value of money, but did you know that there is also a time value of selling value?

In the finance world, when someone talks about the time value of money, they mean that a dollar received now is worth more than a dollar received in the future.  This is true even when that future dollar is absolutely a sure thing.  The idea is that you could invest today’s dollar and have more money than if you had gotten one dollar in the future.

In the sales world, building value early in your customer’s buying process pays more than building value late.  A customer’s mind is more receptive to placing value on a solution before they have started on the price justification/negotiation stage of their buying process.  The time value of selling value holds true even if your solution is not fully defined, as long as an outcome they will achieve is.

Let’s unpack this by looking at how value builds in the customer’s mind.

Value is About Differentiated Outcomes

Customers don’t buy your product or service.  They buy outcomes.  Customers buy for their own reasons, not necessarily the ones you gave them to buy.

Every purchase decision depends upon a customer connecting an offer to an outcome they desire. No outcome, sale.

There are four kinds of outcomes, illustrated below:  Outcomes are either negative (pain) or positive (opportunities).  There are known/expected outcomes and those a customer hasn’t envisioned yet (but which a trusted advisor might open their eyes to). The old sales training advice about “uncovering pain points” covers only one of the four quadrants above (top left). Think of all the potential value you miss when all your salespeople do is go after this low-hanging fruit.   As bad as that sounds, it gets worse.  This quadrant is where all of your competitors swarm.  Differentiation is often minimal here.  When all competitors look the same, guess what the customer’s decision comes down to (spoiler alert: it involves getting ground down mercilessly on price).

Value is About Expected Outcomes

Also, customers don’t buy “you” (I get the value of credibility, but if your offer doesn’t accomplish anything for a customer, it doesn’t matter how much they “know, like, and trust” you).  Customers buy an expected result.  Thus, “expected” is where your credibility comes in.  Value, therefore, grows as faith in an outcome grows. Personal credibility and proof documentation helps builds belief/faith in an outcome…no more, no less.

Value also grows as the picture of that outcome becomes more clear and detailed — in the customer’s mind. Contrary to what “rational model” economic theory predicts, real customers don’t automatically hear an outcome described and engage in detailed self-analysis of all financial impacts of any individual outcome…much less all of the outcomes available.  Accomplished value sellers help prospects build detailed mental pictures…envisioning themselves achieving outcomes and follow-on outcomes. Some trainers call this “selling beyond the sale”.  Telling stories is a great way to kickstart this process, but personalization should follow.

Value, by Definition, is Desirability of Expected Outcomes

After envisioning comes evaluating the desirability of outcomes. Desire is good.  Strong desire is better.  Desire one can justify to one’s peers in a complex sale is…power.  Specifically, it’s pricing power.

Elite selling involves guiding a customer through a process of measuring the desire for an outcome monetarily.  Once desirability is measured in dollars, euros, yen, etc., value comes into full form.  You and your customer can confidently discuss price against a known, quantified value. Discounting is less frequent. More importantly, your price exception/discounting process becomes more disciplined and objective.

Timing is Everything in Selling Value

Selling value is the art of building a detailed, monetized picture of outcomes in each prospect’s mind.  Let’s look at the components of value-building at different stages in the customer’s buying process (aka the customer journey).

  • Imagine building credibility near the beginning of the customer’s buying journey.  Now imagine trying to build it late.
  • Imagine helping them envision unexpected outcomes early.  Now imagine trying to do it while they are comparing proposals against each other.
  • Imagine showing proof of an outcome early…versus doing it to combat discounting pressure.
  • Imagine asking them to envision all of the follow-on/related results early…versus late.
  • Imagine talking to a customer about the annual cost impact of some challenges they are experiencing. What does that feel like to a customer during discovery…and what does it feel like if you start exploring it during price negotiations?

How many opportunities in your funnel right now are you feeling worse about? Did this just make you second-guess your forecast?  If we could get your salespeople to build value early, what do you think would happen to 1) probability of winning 2) need to discount?

The graph above illustrates that the opportunity to build value for your offer has pretty much passed right when customers start comparing offers and negotiating price.

Can you see why there is a time value to selling value?

Good News/Bad News

Ask your salespeople “what value does this customer see in our solution” as a sales coaching question. If your salespeople can articulate detailed value, they’ve covered all the steps above really well.  In fact, you can probably enter a highly accurate forecast for that opportunity by looking at the total customer value versus your price.

It the salesperson can’t articulate clear value, they either haven’t sold value or your offer doesn’t have any (to that customer in that opportunity).  In the former case, some high-impact coaching might rescue the deal if it’s early enough. In either case, a low-to-lost deal forecast might be the right course of action.

Want to talk about how to apply these principles in your sales team?  Contact me.  Also, feel free to like, share, or comment below.

To your success!

Categories
Best Practices Investing Marketing Personal Development Sales

“Sales Isn’t Brain Surgery”…Or Is It?

While a sales career doesn’t require the extensive education and licensing as a surgical career, a great sales professional shares some similar traits.

My wife is a surgeon…she performs advanced procedures through tiny incisions, accomplishing radical changes in her patients’ bodies and lives through tiny keyhole-sized openings.  I’m in awe of what she can do, and its impact.  I’m crazy proud of her and what she does and try every day to rise to her elite level in my very different field.

A truly great – buyer-focused — sales professional will find several similarities.  Top tier salespeople actually perform non-contact brain surgery. mandate

Big Impacts Through a Narrow Field of View

While I don’t save lives for a living, what I do is still pretty cool. I am an expert on customer value…something that exists only inside the customer; specifically, in a customer/client’s mind. I help salespeople open their clients’ minds to previously unconsidered – yet strongly appreciated — outcomes.

Like a minimally-invasive surgeon operating through a ‘scope, salespeople only have a tunnel-vision view into what’s going on in a customer’s mind.  My specialty is teaching sales professionals how to affect customer’s minds, businesses, and lives through that small window between seller and customer’s mind.

The Role of Generalist Expertise and Acumen

Surgeon and sales consultants are both more effective when we are genuine experts in the whole patient/client.  One of us learned anatomy, biochemistry, and physiology to help understand what a patient’s symptoms and labs really mean. The other of us learned economics, earned a top business degree, has managed a P&L, and grown successful ground-breaking businesses…and has been involved in failure or two. My value to my clients is the ability to interpret my clients’ symptoms through a deep/wide business acumen.

Likewise, customer-centric selling requires that sellers provide valued consultant-like insights for their prospects and customers.  A salesperson can’t provide insight/perspective into something they don’t understand.  I’m passionate about providing sales forces next-level business acumen, so they can position themselves ahead of their competitors.

Domain Expertise and Situational Mastery

My wife is an expert in one area of the body, and various ways to fix things when that part of the body is injured or diseased.  When she’s operating through a ‘scope, she knows exactly what all that confusing jumble of stuff is, where she needs to cut, and what she needs to preserve.  She knows what’s coming next, and what lies beneath the part she’s working on, just out of sight.  When things don’t look “textbook”, she’s either seen that anomaly before or can confidently deal with it.  Each operation is individualized to the patient, not the other way around.

I do the same thing, with organizations, not organisms.

Value-focused organizations put their salespeople in a position to either be expert, to anticipate, to accommodate, and/or to seamlessly call in needed expertise as-needed, when-needed.  Facilitating a buying process the customer is usually inexperienced in, helping them through the tough parts by virtue of the sales person’s experience in that domain.

Another thing:  great salespeople don’t blindly shove canned (even brilliantly persona-tailored, technologically sharpened) value messages into every patient’s — oops, prospect’s — brain.  I teach clients to apply value messages surgically:  confirming first whether application caused any value to form between the prospect’s ears, and then what kind and how much.

Closing is Only the End of the Beginning. Focus on Outcomes

My wife’s complication rates and patient outcomes are far superior to peer and industry averages.  This isn’t just because of her technique in the OR, but about her mastery of patient counseling, recovery, and post-op care, and how she develops an exceptionally de-siloed care pathway…focused on patient success.  She knows what world-class looks like and helps those around the patient deliver the care that ensures great outcomes.

I help my clients think not just until the close, but to plan seamlessly to customer success.  I harp on the mantra that there is no after-sale care, but between-sales care.

Customer-focused sellers know that signing the contract is the moment when the pressure to perform starts for your customer. There are several good ways to handle the transition and a bunch of wrong ones. If your business involves repeat-, cross-, or upselling, a world-class approach to implementation and outcome assurance is your only option.

Passion for the Profession

I don’t get called in for emergency life-saving surgery in the middle of the night, but we both love what we do for our respective patients/clients.

I want my clients to learn to walk, then run without me over their shoulder. This doesn’t happen by pushing them out on their own too soon…but it also means aggressive support in the early going so that they leave the hospital, umm…engagement, prepared for their own development.

Unlike a surgeon like my wife, my ideal client is one who is doing OK, but knows they could be doing better.  Are you and your salespeople treating opportunities like everyday complex selling situations, when you know in your heart that what you sell could be elevated to mission-critical for your customers?  Perhaps we need to set a time for a consultation.

To Your Success!

Categories
Entrepreneurship Investing Management Marketing Negotiations Sales Skills

Seven Sales Person Cop-Outs

I’ve been helping salespeople and sales leaders become better at their craft for a while.  I’ve seen greatness and, well, less great.  Here are some of the all-time worst things I’ve heard salespeople tell themselves or their managers, actually thinking they were doing well.  (I’m not including anything I’ve heard from salespeople who knew better and were just trying to get away with something.  That’s a whole different set of lessons).

It’s the Company’s Job to Make a Profit at the Price I Sold

Far too many sales forces are divorced from the responsibility of business: to make a profit. This happens regularly in companies compensated only on revenue, not on margins. I don’t care if “it’s hard to measure profit on a given deal because of internal transfer prices” or any other excuse.  If a sales force isn’t compensated on profit, they focus on easy-to-win revenue.

When this is carried to an extreme, sales people feel entitled to sell at discounts…even insane discounts.  I actually heard this from a guy who claimed to be a sales consultant.  I hope his clients survived.

Here’s what sales leaders should coach instead. You need to have conversations about customer value…with customers.  This shouldn’t stop with selling value.  It should carry through toward monetizing value with the customer. Then, pricing – even premium pricing – becomes a comfortable afterthought.  High pricing becomes a bargain.

Great salespeople can sell high volume and high margins.  I know. I’ve seen it. In the mirror.

But I TOLD Him/Her ____

Sales is not one of those jobs where you can get away with simply “telling”, making your listener responsible for understanding what you meant.  Those jobs exist in departments like accounting (and such poor communicators seldom rise to middle management).

The commission for “I did my job, but the customer misunderstood” is zero.  Salespeople are responsible for the picture that forms in the other guy’s head.

Value exists only in a customer’s mind.  If a salesperson simply barfs some “value messaging” they were given by marketing…without having a conversation to confirm that value formed between a prospect’s ears, they are a teller, not a seller.  If that seller doesn’t also confirm how much value formed, they may be the person who thinks “it’s the company’s responsibility to make a profit at the price I sold”.

Our Value is [insert feature here]

The most critical question a sales coach can ask is “what’s our value in this situation?” In fact, if that’s the only question a coach asks, they can learn a lot about how sellers are selling. When sellers have great answers for this question, they probably did everything your methodology teaches them to do. If answers don’t articulate an understanding of customer value, it doesn’t matter how many methodologies they performed; the sale is still in trouble.

When salespeople answer “what’s our value” with a feature or a seller capability, they don’t understand the value. Customers buy outcomes, not products or services. Value forms in the customer’s mind around those outcomes, not your shiny features or stunning capabilities.

Sales coaches who allow value to be described in terms of a seller features or capabilities are failing their salespeople. Value is the desirability of an outcome (hopefully measured in dollars or something just as measurable).  Accept no substitutes.

Customers Don’t Buy Your Product, They Buy You.

Slavery is illegal.  Customers can’t buy you.  As I said above, customers buy outcomes.

This old saying has merit but is meant to communicate how important the seller-customer relationship is.  Specifically, the critical aspect of “relationship” is credibility.  Personal affinity (knowing birthdays, hobbies, expending entertainment budget, etc.) is useful for some buyer-seller relationships, but not for many.

Credibility, though, is foundational to every successful customer relationship.  When a customer is considering some purchase to obtain an outcome, they always consider execution risk. That is, they estimate how likely it is that the purchase will actually result in the desired outcome.  Salesperson credibility forms the foundation of that assessment.  Without credibility, very little buying will actually happen.

Yes, they buy as a result of your credibility while connecting their desired outcome to a purchase, but…they’re buying the outcome.  Always.

Purchasing Says They Like Our ____ Better, but We Have to Meet the Competitor’s Price

I know a number of purchasing people, and they all confirm this truth:

Modern purchasing/procurement professionals are chartered with buying the best total value.

These same purchasing people confirm this truth as well:

Modern purchasing/procurement professionals are not chartered, trained, paid, or given enough time to proactively uncover and evaluate total value.

So…whose job is it to assemble a value picture for them?  That’s right.   A seller’s.  Professionalism and bedside manner counts. Credibility counts even more.  Enlisting the evaluations of experts within the buying organization to validate the value story is often part of the game.

If a seller doesn’t assemble a validated value picture, value doesn’t form in a purchasing person’s mind, and guess what they use to break the tie? Yep. Price.  They like ___ better means they do indeed like it better, but nobody helped monetize that for them…and they aren’t chartered, trained, paid, or have time to do it themselves.

Purchasing Owns the Budget

Purchasing really owns the budget for supplies and equipment used in the purchasing department.  Period.  Salespeople who are led to believe purchasing owns a budget are incorrect.  Sales coaches who let them work under this misconception are damaging careers and losing sales.

Whenever purchasing makes you believe they own the budget, it’s because they believe your offer has no differentiated value. In their minds, there is no need to bother people inside the company with a nonexistent value proposition.  In fairness to purchasing, letting a seller of a non-differentiated product/service shouldn’t happen.  Undue influence, like “whiskey and tickets” shouldn’t shape a commodity purchasing decision.  If your offer’s only differentiation is courtside seats, that shouldn’t be allowed to shape a decision.

As your offer’s differentiation diminishes vs. the next viable choice, the need to analyze value diminishes, and the entire buying organization feels safe in delegating the buying decision to purchasing. Purchasing doesn’t technically own the budget in these cases, but the organization gives de facto authority to purchasing. This only happens, though, when sellers create no value in the customer’s mind. These are the kind of sales environment that is about to be conducted by bots, AI, etc.

I’m Talking to All of the Right People

Complex B2B sales methodologies help sales professionals organize their selling efforts among a multi-person buying ecosystem.  While they’re handy for organizing an approach to an identified set of people, they aren’t that great at identifying all of the appropriate parties.  Most simply tell you “identify everyone, then use our tool”.

When somebody at a customer tells your salesperson the set of people they’ve engaged internally, how does a salesperson – or their coach — know that list wasn’t kept short in order to make somebody’s job easier?  Should you expect anyone at your customer to know how all of your capabilities translate to outcomes throughout their company?

Here’s the reality:  companies silo themselves more narrowly every year. Silos become sub-specialties, then sub-sub-silos, then soda straws. Only one soda straw has budget to buy your offer, but many benefit.  As customer subdivide, more soda straws benefit.  People in your budget-holding soda straw have three things working against them: 1) they no longer have a big-picture view of their own company 2) engaging all the people they really should make decision complexity awful and dysfunctional simply from a committee size standpoint 3) nobody at the buying company has your sellers’ expertise in the domain of possible outcomes.

If your selling organization hasn’t built the business acumen to help customers navigate these challenges, it won’t happen. Customers aren’t equipped – and shouldn’t be.  That’s your job.

Summing Up

I hope you didn’t find any of these hitting home.  If you did, though.  I’m here to talk.  Contact me if you’d like to stop hearing these statements in your sales organization.

To your success!

Categories
Best Practices Investing Marketing Negotiations Sales

Are You Winning Enough Opportunities at the Right Prices?

While many of my Sales Consultants specialize in specific industries, I have defined my niche differently: companies who produce a differentiated product or service, and who want to be fairly compensated for their value. This means selling at a higher price, In alignment withthe customer.

I’ve had the opportunity to work in many industries: electronic components, telecom gear, telecom services, commercial real estate, and banking. I’ve also been the highest priced option in all of those industries: a combination of products and services.

I have always worked for some of the most famously “high-priced” providers in whatever business I was in. The common thread, and the reason I’ve been successful in each role? In a stroke of early-career luck, I learned the fundamentals of selling to full value (much more involved than “value selling”, and much more effective at establishing higher preference at a higher price) at an early stage, and was able to refine that methodology for use in increasingly “commoditized” industries (what can be more commodity than selling money?). Those experiences formed the core of my Full Value Selling™ methodology.

How do successful selling and selling at the right price interact? Let’s take a look at some research.

Differentiation Gets Valued. 

Look down the left hand side of the graphic below, produced by CSO Insights. Noel Capon describes similar levels of relationship shown in his benchmark work, Key Account Management and Planning. The higher up a customer places a supplier on the vertical axis of this scale, the more value they find in the buy-sell relationship.
No alt text provided for this image

CSO Insights has found that higher levels on the vertical axis correspond to higher win rates, which is awesome. Curiously, they have not even thought to study pricing power.  That is apparently my lonely corner of the selling performance market.

Value CAN Get Compensated.

Many sales methodologies can be used to help selling organizations progress up the scale – at least as far as your customer wants you to go. Far fewer methodologies teach how to get a customer to want you higher on the scale.  The higher a supplier is able to achieve relationship-wise on this scale, the more leverage the supplier has to price.  Again, having leverage doesn’t automatically guarantee successfully using that leverage.

The difference between “winning more reliably” and “winning more reliably at the optimum price” is where I specialize. Full-Value Selling™ helps sellers consistently and smoothly help customers quantify the value received, and more acutely see the bargain they are obtaining – even at a higher price than competitors offer.

When customers are more rigorous at analyzing your value, they see price more clearly in relation to that value. Consumer behavior research shows that people only analyze value until they “get over the hump” to justify a purchase. What this means is that they won’t fully appreciate your entire value on their own; to appreciate your full value to them, customers need to be taken beyond that “make the sale” minimum. Sellers who want to reliably win premium-priced deals can do a little more: help the customer think through FULL value. This makes the seller not only able to win at more advantageous prices but resist discounting more effectively.

Relationship vs. Process Rigor vs. Sales Performance.

CSO Insights has extensively studied companies on not only the level of customer relationship achieved but on how rigorous their salespeople follow a selling process. The horizontal axis on the matrix represents four major categories of selling methodology/process rigor. “Random” means that every rep uses their own personal process. In “informal”, sellers go through process training, but none is enforced. “Formal” is the designation for ongoing process reinforcement and enforcement. “Dynamic” process processes are systematically revisited and updated in response to internal and external changes.

How does selling rigor interact with relationship quality? I’ll discuss results in a moment, but think about how much easier it might be to consistently achieve better customer relationships if sellers know how to perform best practices? The key to progressing to the right on the matrix is how well organizational support manifests itself in effective front-line sales manager (FSM) coaching and mentorship. Teaching a methodology gets you only so far; following it long-term, and making it part of your corporate culture is a huge differentiator.

What are the performance outcomes associated with your position on this matrix? Take a look at the color-coded outcomes corresponding to the matrix above:

No alt text provided for this image

Notice that these outcomes, while highly compelling, are deafeningly silent on pricing achieved. Any sales consultant, myself included, want to help you move up and to the right. I want to help you do more…by filling the void in that deafening silence.

Selling Well vs. Selling Well Consistently vs. Selling Well, Consistently, and Profitably

I also do work throughout our company’s clientele on improving how sales managers coach sellers.  This is key to helping my clients achieve consistently great sales results, but also consistently optimum pricing. I can’t help my clients consistently achieve more profitable pricing for the long term without their commitment to long-term adoption.

Selling value consistently yields higher sales performance, but pricing those reliable sales results yields higher profit performance…think of it as a third dimension of sales performance. I help clients add a third axis to this matrix: doing it all profitably, by achieving optimum win-win pricing. This doesn’t replace any methodology; it complements those tools seamlessly with another: a relentless focus on value delivered.

If you want to move upward and to the right on the Sales Relationship Process matrix, we might need to talk. If you want to do that while achieving higher pricing that your customers love, we are kindred spirits, and I invite a deeper discussion of your goals.

To your success!

Categories
Investing Management Marketing Personal Development Sales

The Seven “Power Components” of Elite Funnel Management

Companies must excel in managing their sales funnel at all levels, from salesperson self-diagnosis, to sales management one-on-ones, to executive funnel reviews. Funnel management is key to understanding the health of any business.  Ultimately, high-performing sales organizations are great funnel management organizations.

In this article, I’ll go over some of the principles I share with my clients. We build a regular cadence around the aspects below.

  • Some indicate sales behavior gaps. That is, the areas below identify gaps in how sellers manage their businesses, and point sales managers to productive coaching conversations.
  • Some indicate dysfunctional management behavior.  Yes, some problems come about because management puts inappropriate incentives in place.

1.    Does the Funnel Reflect Your Business?

Your process probably doesn’t reflect your business if it’s the process that came with your CRM “out of the box”. Instead, take the time to make your funnel yours, instead of your CRM vendor’s.

Does your funnel reflect how your customers buy, and align your sales process to that?Simple process steps or full-on playbooks which incorporate all selling resources and roles are all fine, depending on your business, but:

One simple guideline: build your process around your typical customer journey. Remember, as process detail builds, make sure nothing clouds the view of your customer’s buying process.

2.    Does Your Funnel Give Full Visibility?

Basically, if a seller spends time on an opportunity, it should appear on the funnel. Sellers can’t work effectively “maintaining two sets of books”, especially when one is in their heads.  Worse, companies can’t resource properly.

Unfortunately, dysfunctional incentives often drive lack of visibility. Sellers sandbag when management harangues indiscriminately on early stage deals. Sellers logically avoid busywork when documentation/data entry burden on early stage deals is excessive (as judged by the sales person). Leaders, if you want full visibility, you need to welcome it…and minimize the pain of disclosure.

  • For example, I recently worked with a sales force whose standard operating procedure was to “enter-into-CRM-when-won”. The company’s close rate was 90+%, but opportunities appeared in the CRM minutes to days before being won (actual sales cycle could be 5 quarters). As a manufacturing company, lead times stretched because operations had no advance notice, and couldn’t order materials. While sales people hated dealing with long lead times, they obviously hated dysfunctional funnel conversations even more.

3.    Is There Enough Business In Your Funnel? 

The bigger the funnel, the better, right? Unfortunately, this area spawns unintended consequences.  Some sales leaders gravitate toward oversized funnels. Predictably, mere minutes after an edict for 3x or 5x the sales goal goes out, sales people begin entering “manager repellant” deals into their funnels. Then, everyone from sellers to managers, CRM admins, executives, operations leaders, etc. gets sucked into the extra work of touching, monitoring and handling hundreds of “dead man walking” opportunities. While a funnel must contain sufficient volume of opportunities to retire sales goal, “multiples” aren’t fixed, but depend on individual seller ratios, seasonality, fit, industry, and more.

Whenever I work with clients on “funnel sufficiency”, we combine volume with quality scoring for fit/winnability. Removing low-probability opportunities from the funnel increases predictability.  More importantly, clients de-resource time-wasting opportunities, reallocating effort more productively.

Bottom line: put only good deals into your funnel.  If there aren’t enough of those, the cure isn’t adding garbage opportunities.

4.    Is the Funnel a Healthy Shape?

One level deeper than overall funnel sufficiency is volume at each stage.  I refer to this as funnel shape.  A healthy funnel is shaped like…well…a funnel.  A variety of selling behavior problems show up simply by examining volume in each stage.  For instance, if a seller’s funnel is dominated by top-of-funnel deals (with almost no opportunities in the middle and late stages), that seller is either a new rep or might have a hard time qualifying opportunities.  Similarly, different deformations signal a need for a helpful coaching interaction.  These conversations are targeted; guided by the funnel shape.  Even better, coaching interventions occur in time to rescue opportunities…and sales careers.

5.     Are Opportunities Progressing Well?

By itself, how quickly opportunities progress is an indicator of winnability.  “Time kills all deals” is a truism.  Once funnel stages corresponding to a customer’s buying processare identified and incorporated in your system, we develop an expected time for each stage.  CRM systems can easily measure time-in-stage, which doesn’t have to trigger panic, but should trigger an alert to sales people and front-line managers to diagnose the reason for the holdup.

The metrics-savvy manager could deduce that a higher number of sales stages might yield shorter stage durations, and thus a faster trouble indicator.  Maybe; it depends on a couple things.  1) The precision of defined customer actions for advancing to the following stage; poor definitions lead to lots of false triggering, which causes everyone to ignore alarms.  2) Your sales team’s willingness to put up with the workload of more frequent updates; the more detail a CRM asks for, the less accurate the CRM tends to be.

6.    Can You Immediately See Opportunity Quality? 

What would you think about a funnel view that shows deal size and expected close date, but also displays quality/fit/winnability?  Your view of your business would go from a flat, two-dimensional representation to a full-depth view.  You would have greater confidence and could make better decisions, couldn’t you? This is true for the salesperson looking at their own business all the way to the CEO preparing for an investor call.

In my practice, I see a good-better-best continuum of opportunity quality:

  • Basic level: Stages are assigned a standard win probablility, perhaps validated historically. Alternately, sellers can override standard probabilities, using personal estimates (or some overall guidelines).
  • High Level: when sales stages incorporate customer actions (item 5 above), zombie deals (no customer buying activity happening, but opportunities keep walking along) are excluded. Additionally, opportunities get scored with criteria specific to the business and customer fit.
  • Elite Level: Sales forces quantify customer-perceived value throughout an opportunity pursuit. When incorporated into the opportunity scoring system above, sellers and executives alike have a direct line-of-sight into the customer’s case for change and preference for the seller’s solution. Forecasts with this level of customer insight are highly reliable. Won-lost reviews are precision events. This also builds a foundation for profitable, win-win pricing.

7.    Does the Funnel Show a Desirable Business Mix?

Does the funnel show healthy prospecting and early qualification activity? Looking at new opportunity entries, is there enough, and is initial qualification activity taking place?  Are quality value conversations taking place from the outset?  That is, is value quantified early and widely?

Is the right emphasis given to large opportunities? Big numbers attract disproportionate resources. Is there a solid value assessment in place to justify those resources?  When appropriate, is there a co-created customer “plan-to-go-live” (the customer-centric twin of the “win plan”) in place?

Are stuck deals – those languishing too long in a given stage — identified in timely manner and are interventions compelling?  Looking at customer-perceived value assessments gives insight into the customer motivation/internal case for change.

Is the right product-mix represented?  If not, is a seller gravitating toward a certain kind of business, leaving other opportunities untended?  This could point to a product training issue, a misaligned incentives issue, or a seller issue.  Figure out which and intervene accordingly.

Rinse. Repeat. Have Regular Cadence

None of these guidelines matter if they stay on the shelf.  Hold your leaders accountable for a regular cadence.  Make it a priority.  Incentivize cadence properly and track it, because sales leaders aren’t any different than anyone else.

I hope this helps.  Contact me or ask questions below if I can add any more detail.  If you’d like to go into more detail on your specific situation, reach out.

To your success!

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Best Practices Economics Investing Management Marketing Personal Development

Economic Storm Coming? What to Do Now.

I get it.  I’ve managed P & Ls through recessions and I understand the options and the challenges.  If you’re not ready for it, sometimes the best you can do during a business downturn is simply play to survive.  This article discusses what you can do before hard times hit in order to expand your choices during.

The Cost of Cost-cutting

Make no mistake:  times sometimes get hard.  For example, if you sold capital equipment into the oil & gas industry during the oil price slide of 2016-2017, you know that there is sometimes no alternative but to “right-size” in response to an uncontrollable market dynamic. Companies need to step up the spending discipline during down cycles.

Cost control is good corporate practice, but it has limits.  Cost control, what one of my first bosses called “frugaling” takes energy and management focus.  Cost-cutting your way to profitability is one of the hardest ways to increase net income. Combining cost-control and growth is even harder:

You can’t shrink your way to growth.

When you start cost-cutting, it’s difficult to maintain customer service and responsiveness levels.  Your people find it harder to be that helpful cheerful voice for your customers.  It’s harder to invest in innovation.  It’s harder to get face-to-face with customers. You are at significant risk of trading customer satisfaction for cost improvement.

As you struggle through needing to “frugal”, don’t mistake right-sizing for a growth plan.

More importantly, don’t mistake a cost-cutting project for a guiding business principle.  It’s a tactical coping mechanism, not a strategy, or a path to long-term success.

Let’s Start With What You Shouldn’t Do

Don’t get taken by surprise.  That company who sells into oil & gas should know that an oil price dip is coming.  One of those is always coming.  Always. Leaders in that industry have absolutely no right to be surprised by the fact that oil prices fluctuate.  It’s just a question of when.  If you aren’t preparing your company for it, you don’t deserve to lead a company.

Don’t start feeling superior to some specific industry, people.  A recession is always coming, too.  Always. Go back and read the paragraph above as if it’s directed at you and your industry, because it is.

You Can Prepare the Hard Way…

Some preparations are really difficult.

  • For instance, you could try to manage your fixed costs down.
  • You could reorganize your financing, trading debt for equity…preferably, patient money. At a minimum, it might be worth it to ask your impatient money to be less impatient.
  • Perhaps you can aggressively build cash during good times. Perhaps you should step up your expense control now so that it doesn’t become need to become dysfunctional later.

These preparations can keep your frugaling from being the kind that damages your company’s long-term health. Keen awareness of customer value (awareness I help clients develop and sharpen) can guide you through prudent cost-cutting.

…Or You Can Prepare a Simpler Way.

Some preparations are more doable (perhaps still challenging, depending on your culture and leadership) but set you up for success – during and after challenging times. I can help with these, by the way.

  • Radically rethink who “sells”. Expand the mission of every customer-facing role in your company. Go beyond current “customer experience” (CX) theory.  Where CX trains your people to “delight”, go further: every person trained in value discovery.  I teach three simple questions and a mindset shift that turn every person into an extension of your sales discovery process.
  • Radically rethink who buys. Typically, one silo at your customer holds budget, but many silos benefit. Get to all of the silos who benefit, and help them realize maximum value from your product or service.
  • Radically re-shape your most important customer relationships. There are specific strategic planning systems that shift key account management from “what all can we sell to this customer”, to “how can we add even more to our customer’s business?”
  • Radically reshape your customer’s perception of the value you deliver. Your customers don’t buy your products or services, they buy business and personal outcomes.  What they are willing to pay for those outcomes can increase if you help them perceive outcomes’ value more clearly.  While you might be able to add new products/services in the medium to long term, your salespeople can add to the value of your existing offerings right now. It just takes the right kind of conversational skills and a little additional business acumen.

Start now.  If the economy tightens, your customers will be distracted, and these will get harder. Also, your competitors will be struggling to take your customers – some will try to buy your customer’s business away from you.

Of Course, You Could Just Not Prepare at All…

You could wing it when the time comes, right? What could go wrong?

Contact me if you would like to discuss what you could do in your business. If you know somebody who might benefit from this article, please share.

To your success!

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Investing Management Marketing Negotiations Sales

Is Discounting That Deal Suicidal? Five Ways to Tell

It’s often tempting to discount your way out of a stressful situation, but sometimes you’re doing more harm than good.  Discounting is sometimes necessary…but often, it’s the biggest mistake you can make.  How do you know when you’re in that situation?

Full disclosure here:  I’m highly biased against discounting. My regular readers have gathered that I’m a pricing hawk, and my clients engage me because of it.  Within the Miller Heiman Group network, value-based pricing was my differentiation.  I’ve managed too many P&Ls to be comfortable with knee-jerk discounting behaviors I often see.

Just because discounting throws away profit dollars, is that any reason to call it suicidal?  Maybe. Maybe not. There are good reasons to discount.  We can go through those in another article if you want, but many times, dropping your price hurts more than this month’s/quarter’s/year’s financials. The pain of discount-trained customers lasts far beyond today’s closed deal celebration.  Or, as mom used to say: “Just because you can, doesn’t mean you should”.

So, what are the signals that discounting is simply a crutch for poor selling/marketing?  Here’s a checklist:

The Value is Already High Enough

Many customers think it’s good business practice to push back on price, no matter how satisfactory.  For instance, sales professionals operating in Latin America tell me that aggressive price negotiation is standard business culture there. These negotiators aren’t looking for any particular number, they’re looking for capitulation. Convince them that there’s no money left on the table for them to win, and they’re done.

Another approach is to walk them through the value justification you’ve been building all through the discovery and proposal-building process. You know, the one you’ve validated with them and their co-workers.  Yeah, the one that builds a value case using the customer’s own monetary estimates.  This is the one your sales methodology helps you build in detail.  You have one of those, right?  If not, consider the value of adopting one.  How many discount dollars (remember, discount dollars = profit dollars) did you give up last year?  Compare that amount to the cost of implementing a methodology which would have captured those profit dollars.  How many more digits in the first number?  So…why are we not talking?

You Don’t Know Your Value

I once worked for a company whose culture practiced “if Sales can’t articulate value, Product can’t discuss pricing”.  This company had enshrined value-based pricing as a pillar of the company culture. Nothing moved for an opportunity until everyone knew what value the customer perceived from our offer.  Once value was known, nothing stood in our way when delivering that value.

In contrast, I recently worked with a company in the middle of a company-driven sales force turnover. The outgoing salesforce was known for building value and never discounting.  Clients would routinely recoup the entire investment in under two months (some as slow as six – still a 200% 1st year ROI). Once clients believed such results were achievable for them, price was unimportant.  The incoming salespeople and weren’t equipped to articulate and validate customer value.  As a result, neither buyer nor seller knew the value of the offer.  Discounting became rampant and steep, and EBIDTA shrank to “shameful”.

If your salespeople can’t validate value monetarily with a customer, they aren’t equipped to have a price discussion.  When they are thus disadvantaged, they’ll want to discount their way out of trouble. This outcome is only partially the sales person’s fault.  Leadership holds majority responsibility in providing tools to prevent it.

You’ve Sold Too Narrowly

Has your sales strategy engaged all affected personas? Chances are that they have not.  Even sales methodologies who teach engaging “all” personas, ignore out-of-normal-scope “optional” personas–who could yield additional value. We intuitively shun the decision complexity of adding personas, without strategically adding personas who are natural allies.  Sometimes adding people amounts to “packing the court in your favor”.

I regularly engage with clients who engage too narrowly.  Customers build a group buying decision dynamic around the organizational silo/department who has a budget.  Too often, salespeople follow this definition of “buying team”, ignoring all of the other silos who benefit from their offer.  Business acumen would guide sellers to expand the buying ecosystem advantageously.

If a sales strategy hasn’t built value broadly in a prospect organization, there may not be enough value to support desired pricing.  Look at it another way.  Your company invested resources in producing customer value, but your sales approach failed to leverage all available value into pricing.  If you can’t charge for the value you produce, how sustainable is your business?

You’ve Sold Too Shallowly

Building some value with a buying persona is good. Building more value is better.  I have yet to encounter a methodology that doesn’t allow sellers to add more value drivers into the mix.  I have also yet to encounter a methodology that equip salespeople all of the value drivers to add.

Your sellers are probably able to sell more value to existing personas. They often don’t have the business acumen, product training, or selling tools to sell full value.  If your customer hasn’t built full value in their own mind, the internal math doesn’t check out.  They might think “the value is too low”, but say “your price is too high”. Those two are the same thing.

You’ve Crippled Your Offer

I once had a client who loved to pare down first opportunities into net-new clients.  The idea was to win a low-risk first engagement, then grow from proven results. This is the familiar “land and expand” strategy. Unfortunately, these first engagements were so narrowed that compelling results were almost impossible to achieve.

Designing the value out of an offer to make it easier to swallow traps the seller into discounting a low-value offer. Worse, it establishes low value for all future “expand” opportunities.  This could easily be “suicide by discounting”.

If your business involves follow-on sales, discounting the entry offer is extremely dangerous; you need a convincing “trial basis, then full price” story.  You also need the initial offer to prove “full price value”; think “full value delivery at small scale”, not “low sticker price”.  Predefined criteria for success should also be part of the equation; force a customer to measure value.

The Road to Failure is Paved with Discounted Sales

I love building profitable businesses. Not opportunistic gouging profits, but real, win-win, value-based profits.  I love helping clients do the same thing.

Please share if you liked this article…or comment…or like.  Contact me if you’d like to discuss in more detail.

To your success!

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Best Practices Management Marketing Personal Development Sales

Five Sales Leader Blinds Spots

We all have blind spots, but not all of us make a point of trying to uncover and cure them.  When the blind spot belongs to a leader, an organization can pay the price.  I see several recurring blinds spots with sales leaders and wanted to share these five.

Not Realizing “After the Sale” is Really “Between Sales”.

This blind spot is driven by silo-limited thinking…or to use management-speak: staying in your swim lane.  Certainly, it’s unproductive to distract sales with all of the issues around service and installation.

That being said, the idea that a customer becomes 100% someone else’s problem when a sale closes is simplistic. It becomes downright dangerous for any industry involving repeat, renewal, cross or up-sales opportunities.  Your mindset in these industries should be one of growing your customer’s business, delivering outcomes so that “after the sale” evolves into a more natural “between sales” cadence.  This starts with making sure that the expected outcomes you discussed to win the sale actually materialize.

The sad thing is that sales groups using any good methodology already gather valuable information on outcomes desired by key personas.  Salespeople gather and use this intelligence to close deals, but don’t turn it over to the people responsible for ensuring those outcomes (installation, implementation, customer success, etc).  When I tell most service organizations this data already resides in their CRM, they are often flabbergasted.

Using Activity Metrics Instead of Predictive Behaviors

Sales leaders know they want their salespeople to be measured on quality, not quantity, but they often struggle with what quality looks like.  One of the traps people fall into is that the wrong activities (quantity measures) are so easy to measure and track, while many of the measures of quality are hard to quantify.  As a famous statistician said, “far better an approximate answer to the right question than a precise answer to the wrong question…”

Measuring meaningful conversations that advance a sale is hard to measure, but it’s what a sales leader is really seeking when they instinctively know they are after quality. Good selling behaviors predict and drive success. Activities, like phone dials, don’t.

There really are ways to measure the quality of selling conversations.  I favor analyzing what the salesperson learned about desired outcomes, new outcomes introduced and value…plus insights into the customer’s buying process.

Not Performing Actual Sales Coaching

Study after study shows that sales managers think that they coach well…while the salespeople they claim to coach don’t think any coaching takes place at all.  That result looks like more of a black hole than a blind spot.

The gold standard of coaching is coaching by questioning. Great coaches guide salespeople to think up selling behaviors through a Socratic (question-asking) approach.  This way, salespeople learn to self-diagnose, internalize, and solve sales problems for themselves over time.

Proper sales coaching like a sales process where the boss/subordinate relationship can get in the way. When it’s easy to direct a subordinate, a questioning approach seems like so much more work.  Additionally, it’s hard for a directive boss to communicate that they have the subordinate’s best interest at heart. This, in turn, makes it hard to influence sellers to expend discretionary effort.

Bottom line, coaching by telling isn’t as effective at changing those great predictive selling behaviors you’re really after.  Remember, telling a salesperson what they should do isn’t coaching any more than telling a customer what they buy is selling.

All Sellers, Not Just Sales

I’ve worked in companies who made sure everyone who touches a customer knows how to have a conversation about customer outcomes and value.  It’s radical, but I know it’s possible because I’ve seen it and led it.  It’s radical in the face of today’s highly structured (and highly turf-conscious) organizations. That’s why I call it “radical value focus”.

This blind spot is so widespread that even sales industry executives try to “widen” our definition of sellers to “everyone who touches revenue” (translation: everyone I can put into a silo led by me). Talk about silo-limited thinking. The standard should be “everyone who touches the customer”, even though this conversation is more difficult.  Even though the CEO needs to get involved in this – a culture change.

Again, I’ve seen it done.  It’s radically value-focused, and it works wonders.

Selling Profitably via Value-Based Pricing

I’ve met sales leaders who measure success by revenue rather than profit.  I’ve worked for them as well.  Unfortunately, I’ve managed too many P&Ls to accept a revenue mindset. In fact, a sales leader who chases profitless revenue will never have a seat at the corporate leadership table…and with good reason.

The purpose of business is to add more value for customers than it costs them to produce.  If sellers can’t capture that value (in the form of price), how can your company afford the costs to produce the value you’re so eager to offer your customers?

Learn how to price to value. When you do, you jointly determine an (almost always higher) win-win, value-based price in conjunction with your customer.  Value only exists in the customer’s mind, so a value-based price should be one that they’ve justified for themselves.

Summary

If these are blind spots for your organization, fill them.  They are intertwined in a radically value-focused culture.

  • Learn how to integrate those value-focused conversations by everyone who touches your customer. Create a more complete value-based picture of outcomes you deliver.
  • Teach value-focused conversations by every seller, not just sales.
  • Turn the teaching into long-term muscle memory through proper coaching.
  • Confirm the value your customer thought they were buying by giving your implementation teams each persona’s value/outcome goals.
  • Price to the value your entire company has learned to consistently deliver to customers.

Does this open any new vistas in your world?  Contact me if you’d like to discuss.  As always, please share and/or comment below.

To your success!

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Best Practices Economics Leadership Marketing Personal Development Sales

Make These Five Preparations Before an Economic Storm

How would you prepare your company if you knew a downturn was coming?  What would you change?  There are a few things you need to think through clearly now; a few preparations you need to make.  You should be doing some of these anyway, regardless of your personal economic forecast, but these “should dos” become “must dos” when the economy slides.

Nobody knows what the future holds, and that includes economists. At some point, though, this historically long economic expansion is going to end. When it does, fortune will favor the prepared.

I don’t blindly follow those who say that a downturn is inevitable simply because the economic expansion has been so long-lasting.  Perhaps I’m still impacted by a company leader saying that in the 1980s, then having that expansion last another two years.  However, there are a few indicators that should give us all pause. One, the shape of the yield curve, has perfect accuracy for the past several recessions.  This may be because this indicator is the aggregated “bet your career and your firm’s money” wager by many of the world’s smartest financial minds, placing much more money than in all of the stock market. Here’s an article that explains it pretty well. I ignored this indicator once and regretted it.

Regardless of your personal forecast, I suggest you go through this pre-storm checklist and give some thought to five issues.

How Will Your People Strategy Change?

Whenever a recession hits, one of the first dilemmas is how/whether to adjust the sales staffing plan. One of the worst burdens of leadership is deciding to downsize. Sadly, your company’s financial condition and financing structure might render this decision easy. Highly leveraged companies and those with short-time-horizon investor populations may not have any option but to lay off and hunker down.

For companies blessed with growth during a downturn — or with patient money backing you — increasing (especially sales) staffing in a downturn takes advantage of competitors’ reduced ability to respond.  While I’ve never been lucky enough to work for a company with the resources to make this happen, the experts tell you to hire…with caution.  There are diamonds in the rough, perhaps stars laid off by financially vulnerable employers, or stars who had better options.  At minimum, I would check the credit ratings of former employers as I prepared to interview a candidate.

Will You Discount? Will it Help?

During a downturn, price pressure will be inevitable. Discounting to win business is a fragile strategy.  Because price declares value, the player who drops price first definitely damages their own reputation (perceived value).  Matching a competitor’s price might bring your value down to their damaged level — unless handled properly.  Maintain a clear view of your value and what it offers to each prospective customer.

Start building value with customers now to minimize how much you’ll need to discount (Helping you do this is what I do).  If you have value, you should be able to maintain some price premium, but as competitors discount, even a solid price premium is applied to a lower base (competitor’s declining price).  By firmly retaining that value premium, you will minimize damage to your offer’s value.

If you can pre-emptively add to your value premium before a competitive price war, you may be able to mitigate some of the damage discounting causes.

Pursuing New Customers

Taking share during a downturn can be challenging.  Most competitors will be fiercely defensive…fighting for survival. How hard do you bang your head against that wall?

Before a downturn, figure out which competitors are already in trouble with their customers.  Your salespeople can sometimes gather this kind of intelligence, but there is an even better source.  Everyone in your company without a sales title who touches customers has a different vantage point based upon trusting relationships – with customer personas who may welcome the chance to resolve a vendor problem.  Train and equip those people to spot competitor vulnerabilities.  While you should always be sharpening this discipline, it becomes much more critical in a down economy.

If your product or service has a potential alternate market, consider exploring one or more of those before a downturn.  Pre-emptively look for opportunities to solve that market’s typical problems in new ways, or to add new value.  A fresh eyes look at your product or service’s possible value propositions and how they could produce novel outcomes for different markets might be in order.

Defending Existing Accounts

As competition escalates, competitors may be coming after your accounts. If you haven’t already, implement an advanced account management program now to pre-empt competitive pressure.  The goal is to make your key accounts more defensible.

The other goal is to grow within your current account base — less challenging than taking share. Account strategy should proactively demonstrate — then grow — your value to customers. Do this, and new opportunities crop up more easily in your existing account base.

The kind of account management program needed is one that focuses on building customer value using a cross-functional team approach.  Once again, your non-sales sellers are key to the success of a cross-functional account management effort. Peer-to-peer executive selling within the value-building charter is another key component.  Contact me if you’d like me to describe such a system in more detail.

Innovation

In a downturn, it’s common to strip R&D to the minimum. With some of the value-focused efforts described above (cross-functional account management and value-focused conversations), you will build a value insights-gathering “engine” enabling you to innovate more inexpensively than you might expect.  I help clients do this all the time, but during a recession, a radical value culture becomes an even bigger competitive advantage.

Another way to achieve some cost-effective innovation is to rethink your capabilities — in terms of what product/service capabilities are used to differentiate you.  These already-developed capabilities are the foundation for new products for existing customers, and are a key element in possible new market expansion efforts; you may see creative new value propositions that your existing technology expertise can capture with relative ease.

Summarizing

If you think a downturn might be coming, get your company’s financial house in order.  The next recession (whenever it does come) doesn’t look like it will be banking-led (the deepest and longest kind of recession), but unconventional economic policies (trade wars, etc.) mean a lot of predictability has been taken out of the economic system.  Agility is always important but will become a watchword during any upcoming cycle.

As you read this article, I hope you see that many of these preparations should be part of your regular management practice.  They become much more critical in a recession, and you’ll be glad you began working on them now.

If I can describe any of these preparations in more detail with you and your team, please reach out.  Otherwise, please like and/or share with your colleagues.

To your success!

 

 

 

 

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Best Practices Investing Marketing Personal Development Sales

Does Your Customer Know Your Offer is Mission Critical?

If the statement below should resonate with your customer, you probably operate in a mission-critical sales environment.

 


“(What I sell) is Cheap. It’s Trouble that’s Expensive”.

 

The mission critical sale is when your offer can affect your customer’s business or operations in some significant way. Note the emphasis on “should” and “can”; I’ll get to that later on.

Examples might include:

  • Complex/Technical capital equipment
  • Medical tech and new technology
  • Custom & Semi-custom products & services
  • Differentiated components
  • Corporate software, including SaaS/cloud delivered.

The Mission-Critical Sale Moves Beyond Consensus Selling. 

Full disclosure: I’ve been selling and consulting in “the complex sale” (aka consensus selling) for decades. I understand it and am a huge fan.  I’m beyond “drinking the Kool-aid”. I’m marinated in it.

I also know what consensus selling methodologies are and aren’t.

They are for organizing opportunity pursuit strategy when a buying ecosystem — multiple personas – is making a group buying decision. Usually, this ecosystem is made up of personas somebody thinks should be included. Unfortunately, complex selling methodologies often assume that “somebody” defined the group properly.

Complex sales methodologies aren’t for expanding a buying ecosystem strategically (methodologies accommodate expansion just fine, they just don’t teach it). Typically, companies buy in organizational silos, applying a self-imposed set of blinders to their decision. Thus, they buy too narrowly, engaging prospective vendors constrained by their own narrow perspective. It’s not your customers’ fault: they aren’t experts in your offer’s capabilities and don’t understand all of its implications.

When One Silo Has Budget, But Many Silos Benefit

Unfortunately, selling organizations who blindly accept a predefined buying ecosystem almost always overlook potential stakeholders. This is for a variety of reasons, but the result is that sellers miss potential differentiation leaving value unrecognized. Consequently, opportunity strategy under-powered…a potentially mission-critical sale is reduced to a run-of-the-mill complex sale.

  • Imagine this scenario: You’ve gained consensus from your regular personas, to the point of mildly irritating the purchasing agent. Proudly, you know what every persona wants, and each feels your offer fits their needs. It’s smooth sailing until your coach calls: you’re on the outside looking in. Astonishingly, a competitor has penetrated throughout the organization — to departments you didn’t even know cared — and somehow to executives who told you that the personas you were working with were “the right team”. Worse, their proposal was higher priced than yours, but articulated business outcomes just too compelling to ignore. You followed your “consensus selling methodology” perfectly, but the competitor boxed you into a corner that you couldn’t even discount your way out of.

Again, consensus selling methodologies help organize all personas you identify. Unfortunately, they don’t teach anticipating and proactively adding new players to an ecosystem. In contrast to methodology, “buyer enablement”: helps customer organizations make better, more well-informed decisions.

Admittedly, expanding the buying ecosystem increases decision complexity. However, don’t make the mistake of thinking that’s always a bad thing.  Adding the right people means adding allies…packing the court in your favor.

As I said, I’m marinated in complex selling methodology. It does its job (organizing a given group decision dynamic) really well. For the mission-critical sale, though, today’s methodologies need a specific boost: understanding when, where, and how, and why to change the decision dynamic — and to what.

It’s Not Harder or More Complex. It’s Just Value-Focused

In some ways, value-focused selling is easier. For example, coaching simplifies down to one question “what’s the value?” (OK, sometimes asked over and over like a child asking “why?”) . If your sellers can articulate a complete value picture, they’ve probably performed all of the selling methodology steps just fine. Focusing on value yields a deep understanding of the motivations behind the consensus decision.

  • I’ve analyzed and coached perhaps thousands of Miller Heiman Group Blue Sheets. A recurring rep shortcoming is understanding persona-specific Business Results and Personal Wins. Critically, not understanding desired outcomes, and how customers value those outcomes means reps can’t genuinely understand the group decision.
  • Similarly, experienced TAS practitioners echo similar deficiencies in users of that methodology. Typically they uncover missing/incomplete Unique Business Value, Critical Success Factors, Compelling Event, and Economic Value Proposition. Again, these are all failures to understand customer value.

I could repeat for other methodologies, but the trend is clear. Salespeople capture groups, but not the value that drives their decision. Worse, they don’t build complete value high and wide in customer organizations.

What if, instead of switching to a new methodology (when the ones out there are fine for organizing a group buying decision)…what if you could just incorporate the missing value conversations into your existing process? Wouldn’t that be a high-value, low interruption, easy-adoption initiative? In fact, this is the elite selling behavior most mission-critical salesforces are missing.

Separately, for those without a methodology in place, what if you start your team at the core of sales–value–then work outward to managing the customer’s decision dynamic as needed? Remember, customer value is what moves all buying decisions — from transactional to mission-critical. Developing your sellers’ “nose for value” is the pivotal skill in any sales environment.

Not All Mission Critical Sellers Act Like It

Earlier, I promised to come back to the words “can/should” in “your offer can affect your customer’s business…”. Here’s the thing: many organizations who sell potentially mission-critical offers don’t sell like their offer is mission-critical. They don’t make it mission-critical for the customer(a la the seller in the lost deal scenario above). Rather, they go through methodology-mandated motions without connecting solution to value, building value, and extending value organization-wide. This leaves deal-winning value – and pricing power – on the table. I’ve managed too many P&Ls to accept this shortcoming.

One of the reasons I focus on the mission-critical sale is that the ROI on “increasing pricing power” is staggeringly high. Notably, this is because pricing dollars are profit dollars. Gaining pricing power is a conversation that CEOs, CROs and COtBs want to have, and I find those conversations a lot more rewarding (OK, valuable) than ones with sales enablement and L&D professionals comparing complex sales methodologies. One sounds more mission-critical than the other, no?

So, want to talk about it? Contact me.

To your success!