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Does Your Sales Approach Blow Off Profits?

Many experts agree that selling with perspective/insight improves selling performance, but most ignore the role played by business acumen.  Business expertise is foundational to perspective selling success. Ignoring it is a mistake; best case, you can win some more opportunities, but at suboptimal margins.  Worst case: your insight selling investment won’t get you anywhere.

Perspective selling can be a huge difference maker. CSO Insights found that companies who incorporated perspective into their approach had 12% higher win rates.  This rose to 23% higher win rates for companies who master perspective. The data was conspicuously silent on profit margins of those won deals. Thus, selling with perspective can be powerful, but your mileage can vary widely, depending on how you implement.

Unfortunately, some sales training companies cover business expertise with little more than a vague hand wave. Their treatment: “Take your business acumen…you know, that business acumen that you have (right?)…and use it to provide some valued perspective”.  Apparently, hope is a strategy.

Others tell us to apply our business acumen to expose an unrecognized problem, unrecognized solution, unforeseen opportunity, or to bring a third party’s capability to bear.  Those are great suggestions for how to use already-established business acumen.

Business Acumen is a Serious Discipline, not Some Buzz Word.

I’ve heard business acumen (for sellers) described as “understanding how your customers make money”.  That’s a great start.  Adding “to the point you know how your offer can help them make even more” should become the standard for every customer-facing person in your organization.

SWOT (strengths, weaknesses, opportunities, and threats) analysis is better than nothing but doesn’t help a seller develop very meaningful insights.  It doesn’t help your people meet the standard above.
“Understanding growth drivers” sounds helpful, but don’t you need business acumen to for that level of understanding?

Sellers need a set of tools which help them understand how business works well enough to look at a prospect company with a “mechanic’s eye”:  ability to diagnose what’s working well, what’s not, and how their offer can help.  My business acumen framework covers a business in enough depth to help sellers do just that.  Here’s a diagram of the major parts of a customer’s world: What elements of their environment shape a business, internal elements that shape their world view.  On the right, is a list of some of the major outcomes you might be able to help them change.

Customer's World Business Acumen copy

Because this framework is about your customer’s world, it works with any sales training system or methodology. Contact me if you’d like to learn more about this overview.

Business Acumen Shapes an Entire Pursuit, it isn’t Just a Process Step

I’ve seen leveraging business insights to “provide perspective” and “provide insight” as one step in the selling process.  I reject this; such a suggestion shows a fundamental misunderstanding of business perspective.

Business acumen helps a seller throughout the arc of the customer experience:

  • Secure an initial appointment by showing that the seller has valuable business advice to give.
  • Shape discovery by uncovering new value and expanding known ones.
  • Expand the decision ecosystem by connecting unanticipated outcomes with your offer.
  • Expand the total value of your offer by adding outcomes all over the company.
  • Earn executive meetings by connecting to executive-level concerns.
  • Negotiate win-win pricing by walking your customer through the monetary value of all of the outcomes you help them achieve.
  • Explore even more outcomes as all of your people engage with a customer post-sale.
  • Capturing all of these value insights helps your marketing team produce content that targets the customer outcomes that win most of your deals, generating leads that self-qualify for your differentiation.

That’s why I promote a company-wide “value culture”.  In a value-focused culture, a lot of roles participate and several loops get closed.

How Business Acumen Fits into a World Class Sales Culture

Business acumen is a backdrop to a phased process, each phase of which blends into the next. Thus, Business acumen is foundational to professional selling.

Perspective selling 3 circles2

Initially, a seller should uncover needs, value gaps, and potential customer outcomes.  I have a tool called value networks which helps guide this process more efficiently (these are company-specific).  In this phase, sellers need to envision all of the parts of a customer organization the selling company’s offer might impact. As customers have become more siloed, this job has become more challenging.  My value networks help make this easier, and work with any sales training system or methodology.

During this process, a seller should be able to develop value (build the desirability of various outcomes) in the mind of various buying personas.  The diagram in this middle circle reminds sellers that they need to develop value while they can.  Once a prospect has decided you’re on the shortlist, it gets increasingly difficult to “sell value”.

Ability to sell value vs discounting

To begin the closing process, a seller needs to connect their solution to customer-validated outcomes, recap the value of those outcomes, and then position the solution based on that value. Pricing – even premium pricing– should reflect the value of those outcomes and share a win-win philosophy.  I have often experienced higher customer preference at premium prices once the customer-validated value is used alongside the price for context. 

Venn Diagram

Selling with Perspective is Good.  Selling with Value Perspective is Profitable.

Perspective selling is powerful.  It increases close rates and strengthens customer relationships.  With a few simple additions, it can do all of those things more effectively…and more profitably.  That is, you can close more deals at a higher – and more customer-appreciated – price. Since pricing power is profit power, those small adjustments make a huge difference.

Comment below.  If you found this valuable, like this article and/or share with your network.  If you’d like to learn more, please contact me.

To your success!

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Best Practices Management Marketing Personal Development Sales

Five Reasons Your Salespeople Aren’t Good In the C-Suite

If your well-trained salespeople are having trouble getting into the C-suite, you aren’t alone.  It’s pretty common. There are a couple main reasons, some of which are easier to correct than others.

I’ve been in the sales training game for almost a decade, and have engaged with a a lot of sales forces in a lot of industries. Through my past experience as an executive, bolstered by my work selling to them, I’ve observed a couple of major problems.

Problem 1: The “Salesperson Doesn’t Add Value” Loop

This is a problem wider than just C-suite selling.  The sales profession has hurt themselves.  CSO Insights published a research note which describes what they call the apathy loop(contact me if you’d like a copy). The basic idea is this:

  • When sellers act unremarkably, customers no longer consult them (currently B2B buyers prefer company salespeople 9thout of 10 information resources…ouch!).
  • Sellers self-inform using one or more of the 8 better information sources and self-diagnose their solution.
  • They then distribute a requirements document and ask sellers for proposals/bids/etc.
  • The request traps most sales teams into a response every bit as standardized and unremarkable as the customer expected in the first place.

Sellers need to add value–go beyond customer expectation– to break out of the apathy loop. Challenger salespeople shake up a customer’s thought process by challenging (hence the name) assumptions and thought processes – generally by “telling”.  Insight sellers might ask questions or tell stories.  Perspective sellers build credibility, then offer business insights. These insights might take the form of:

  1. Enlarging – or shifting– the customer’s conception of their situation and/or problem.
  2. Altering – ideally expanding — outcomes that a client envisions and desires.
  3. Helping a group improve the quality or efficiency of decision-making. This kind of perspective is useful, but doesn’t move an executive’s needle – today’s topic.

A lot of training programs “yada yada” business acumen:  they tell sales people to “just use yours” to provide perspective. Has everyone in one of your selling roles really mastered the business acumen to provide insights?

It’s pretty hard to provide insights into something you don’t understand.

Some of the highest end sales forces in the world buy their sales people MBAs.  You can build a lot of business acumen for a lot less…why are you choosing none at all?

Problem 2: Executives Only Want to Talk About Executive-Level Topics

Top executives organize their companies.  That is, they define and arrange organizational silos, then direct how work flows between them. If an operation or process lives inside a silo, execs don’t generally want to hear about it. Instead, executives summarily refer functional-level subjects down into the silo (and place the offender on their “time-waster list”).

The work of getting executive time is often the work of making your topic relevant to them.  While sellers should show the same respect for every persona’s time, the stakes are higher for executive meetings.

Only approach an executive on a topic/issue they will value.

If you don’t have anything, wait until you do.  If your people can’t tell the difference, they need more business acumen.

Of course, your training and enablement included techniques and practice for talking to executives (it did, right?).   Now, did you feed them executive-worthy issues…or the business acumen to find topics for themselves?  Or, did you simply tell your sales people to “get out of your comfort zone.”?  How did you coach actual conversations? Did you get out of your comfort zone in training and enabling them?

Problem 3:  Customers often buy in silos.

Another reality: your customer reinforces the apathy loop via their own org chart. Organizational silos shape buying processes by simply existing. Companies tend to self-examine their needs through a silo filter. Requirements, RFIs, RFPs, etc. often signal how narrowly your customer is thinking through their own problem.  The easy – almost automatic — reaction is to follow the customer’s self-limiting thought process.

Remember the customer who called your salesperson in after internally developing their own requirements? Have you explicitly trained your reps to ask:

  • Who had input into the proposal?
  • What other functions and silos were consulted? How heavily was/will their input be weighted?
  • What functions/silos weren’t consulted…and why not?

If you haven’t trained reps to ask these questions, do you think they formulate and ask these questions on their own?

If your solution positively impacts more than one customer silo, you need to make sure you uncover every possible ally.  Remember, cross-silo benefits are often a valid reason to engage with an executive.

Problem 4:  Perhaps your selling activity is siloed too.

Maybe you’re unconsciously reinforcing the apathy loop yourself.

Your sales methodology is just as effective across silos as within, but I haven’t seen a single trainer encourage thinking outside of the box…well…silo. Ask yourself: what explicit skills, analytics, or tools did I give my people to carry their methodology across silos to hunt for value gaps?  If you didn’t train and coach them to apply methodology outside of the comfort zone, you’ve reinforced a discomfort zone…and strengthened the apathy loop.

Business acumen provides a foundation.  Sales people rely on their business acumen to talk comfortably about bigger business issues across organizations.

Articulating different ways your product or solution could impact functions and roles across a target company requires a different kind of product training.  I know of some great tools to help sellers understand the networks of value their product/service can have at a customer.

Problem 5:  You’re Rewarding Mediocrity

You may have also erected another barrier to your own success:  your compensation plan.  Do you have a compensation plan and discounting review processthat incentivizes sellers to get outside of the apathy loop and discover value? Or, do comp plan and discounting process reward commoditization equally? Humans– buyers and sellers — take the easiest route to an end.  If sellers can, they will make discounted sales by sticking inside of the apathy loop: meeting expectations, acting unremarkably and not differentiating themselves or their offer. Ability to manipulate your discounting/price exception system is all that’s required.

Sales People Want to Be Great.  Let’s Help Them

I am happy to talk about how to help close all of these gaps.  Contact me if you’d like to discuss further.  As always, like and share with your networks if you think they might find value.

To your success!

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Best Practices Investing Marketing Personal Development Sales

So Close But Still So Far: Discounting while Perspective Selling

Conclusion of a Five Part Series.

Are you selling with great perspective but still find your sellers discounting to win opportunities?  Don’t worry, you aren’t alone.  Selling with perspective (or insight, sometimes challenging) wins revenue by uncovering value. In the right hands, that can deliver benefits all over your company. In the wrong hands though, it means producing unprofitable revenue: making your company work just as hard for less reward.

Throughout this series, I’ve discussed perspective,  knowledge or insight that expands a customer’s understanding of one or more business issues. When a seller provides perspective, they apply customer-valued (not just any) insights and expertise about unanticipated outcomes. That might mean improving a decision, or achieving a previously unknown outcome.

Selling with perspective breaks sales professionals out of a death spiral.  That spiral: “since salespeople don’t add value to my decision, I’m going to self-inform. Then, I’ll invite them to bid on my self-defined solution.  As a result, they will have a hard time adding any value”. Using perspective selling to break out of the death spiral is critical. Great, even.  It helps win more opportunities, which is critical.

The thing is, a great perspective seller is most of the way to being able win those same opportunities at much higher margins—combined with higher customer preference.  Perspective selling while discounting iso close, yet so far.

I maintain that any company (including a non-profit, if you think about it) has the same fundamental mission — the core purpose of business:

Any company exists to generate higher customer value than it cost to deliver.

To recap, perspective selling allows sellers to uncover and develop additional value – the very essence of a successful business. Since value is the basis of price (OK, strike “is”. “should be the basis of price”), perspective sellers are perfectly positioned to sell value-based prices. They just need to take their game to the next level.

The Three Pillars/Legs of the Perspective Selling Stool… and Value.

Remember the three foundational “pillars” of expertise (or three legs of a stool) a seller should master:

  1. Business Acumen...This was the focus of part two. Basically, business expertise helps evaluate a prospective customer’s (or any company’s) operational efficiency and effectiveness, then identify value gaps.
  2. Solution Acumen. Feature/benefit selling is dead.  As discussed in part three, solution expertise improves perspective selling by translating a product or service into results/outcomes for a prospective buyer.
  3. Customer Acumen…In part four, we described world-class customer acumen.  It’s expertise in facilitating a group buying decision.  At elite level, sellers incorporate decision criteria players from any (even unusual) role with a valued outcome connected to their solution.

The ingredients of selling a value-based price are all right there above…emphasized in boldface.

Perspective (plus insight selling, and to a lesser extent Challenger Selling) harnesses the most compelling buying process: causing a customer to visualize unrealized, desirable outcomes for themselves. Adding on, valuable outcomes are the foundation of priceable value.  Finally, priceable value is the base of value-based pricing (Unfortunately, this isn’t as obvious as it should be. For proof, just look at how many dollars in discounts you gave out last year).

Can You Please Just Finish the Layup?

Done correctly, perspective selling is uncovers customer-valued outcomes throughout the entire selling process.

Unfortunately, most perspective selling doesn’t explicitly teach asking that one more question: “what will this outcome mean to you…monetarily”?  The exact wording of that basic question varies depending on personal style and situation but could sound like:

  1. What is [this situation] costing you every [year/month/etc.]?
  2. It sounds like that [situation] is causing [other department/role] to spend [hours/dollars/resources] on [current work-around]. Can you tell me about that or get me in front of them to ask directly?
  3. I just saw this at another company. For them, [describe improved outcome], resulted in X% reduction in [risk/cost/waste/etc.] and a [savings/cost avoidance] of $Y.  What kind of result do you think might be realistic in your situation?
  4. …you get the idea. Express the outcome as a result preceded by a [dollar/euro/yen/pound/yuan/rupee/etc.] sign.

Thankfully, this isn’t a “keep selling until you lose” situation.  Perspective sellers uncover value early and often — way before the proposal/price negotiation stage.  Remember, that’s the whole point of being an insight seller. It’s like great perspective sellers are leading a fast break with the basketball.  They only need to finish the layup by helping the prospect monetize their already-expressed valued outcome.

The Three Pillars of Perspective Selling and Value Price Selling are the Same. They’re Just Used Differently.

Now, re-read the boldface text on the three pillars above.  Next, go back and read the typical questions just above.  Then, notice how the three pillars help a seller:

  1. Understand the cost impact on the customer’s business? (hint: business acumen, possibly solution acumen)
  2. Predict a secondary/related business result, (business acumen, solution acumen), then recruit a new buying influence with something to gain (customer acumen).
  3. Refer a prior success (solution acumen) into the current prospect’s situation (business acumen), then start one persona on the path to monetizing the problem in their own world (business, solution, and customer acumen).
  4. …you get the idea. It takes all three legs of the stool to support both perspective and value price selling.

Perspective selling carries your conversation widely and effectively around an organization. However, Value price selling can carry your conversation more effectively into the C-suite.

Perspective selling uncovers and clarifies value drivers. In contrast, Value selling monetizes drivers.  Full Value Selling pushes sellers to monetize every single value driver they possibly can.

Perspective selling wins opportunities.  Better still, Full Value selling builds so much monetary value for your solution that your higher price is a better bargain to the customer than the exact same proposal sold only with perspective.

Selling value is one of those areas where less is less.

More value is more price. Importantly, price is profit.

Your company exists to generate higher customer value than it cost to deliver.

If you aren’t happy with your current results, could it be because your sellers are trained — and compensated (that’s another blog post, or several careers) – to go after exactly the outcome you pointed them toward?

Contact me if you want to talk about it.

To your success!

Categories
Entrepreneurship Marketing Personal Development Sales

Perspective Without Business Acumen: Is That Even a Thing?

Part Two of a five Part Series.

Without business acumen, you can’t provide meaningful perspective.

In my last article, I discussed Perspective selling, and its cousins, insight & Challenger selling – and how powerful they are. First, I described perspective: knowledge or insight that expands a customer’s understanding of one or more business issues.  When a seller provides perspective, they apply customer-valued (not just any) insights and expertise .

To consistently provide perspective, sellers need to predict – then introduce – then validate – a customer-valued outcome.  Importantly, part one detailed three techniques for presenting perspective: three ways to stimulate a prospect to visualize an outcome.  In summary: asking value-oriented questions, re-framing a prospect’s viewpoint via credible instruction, and storytelling all engage parts of the brain that simple “selling by telling” does not.

Perspective Takes Three Kinds of Acumen.

Here’s the thing: those three techniques require a strong foundation in three areas. World-class sellers need three types of acumen in order to generate useful perspectives regularly.

The three underlying elements of acumen:

  1. Business Acumen
  2. Customer Acumen
  3. Solution Acumen

With apologies, let me bring the old “three legged stool” metaphor out of storage.  Thus, each type of acumen represents one of the three legs, and the stool needs all three legs to support world class performance.

Today’s topic:  Business Acumen

One of my most popular articles ever discussed the importance of business acumen.  It makes the point that you can’t know your customer’s business until you know business. Rather than repeating that article’s point, the  “why” of understanding business, I’d like this article to address the “what” and “how”.

First, there’s good news for non-“mathletes.  Understanding the numbers in a target company’s financial statements probably won’t get you as far as concentrating your time elsewhere (unless you’re in a field like finance or accounting). While financial acumen isn’t a waste of time, just remember:  financial statements describe financial health of a company, while a salesperson is usually more interested in operational health.  It’s more important to know how an operational change will affect the financial statements that it is to be able to analyze a financial statement for needed operational changes.

Business acumen is critical regardless of your role in your organization. This series of articles focuses on seller roles (any role that faces the customer). Nonetheless, if you’re a business leader trying to focus your company on delivering customer-perceived value, your whole organization should be business-savvy.

Perspective selling, becoming a trusted advisor, requires a seller to know their customer’s business well enough to give valued insights. Thus, many sales leaders realize that building business acumen for sellers and customer-facing roles boosts sales performance. Because of this, several Fortune 100 companies put their entire sales organizations through a mini-MBA program.

What Does Basic Business Acumen Cover?

If I had only one day to work with your people to build their business acumen I would organize a workshop covering a few key topics:

  • Treacy and Wiersema’s three value disciplines; how a company sees themselves differentiating in their market.
  • Understanding current trendsin a company’s market: your own and a customer’s.
  • Perspective sellers are attuned to their customers’competition:direct and indirect / substitutes.
  • Business professionals know how to find any company’s top management priorities. Can they leverage this knowledge into insightful interactions with a customer?
  • Businesspeople should know how to uncover major business risksfaced by any company, and articulate ways to address them.
  • While I don’t advocate strongly for mastering financial ratio analysis, I am big on understanding cost structure: fixed vs. variable costs, and break-even point. Know how to impact each of those items, and how you product /service impacts a customer’s cost structure.
  • Sales people should be able to break any company down into its component processes and activities…then identify key processes.
  • Your people need to be able to identify key process inputs/resourcesa company uses.
  • Business professionals should understand how key partners, alliances, and complementary offers build into complex ecosystems..and how these players add value to each other.
  • How does a company define their customers,and why?
  • Business people, especially sellers, should understand market channels:different kinds, how they work, their value, their challenges, and how customers use them to buy.
  • Business acumen helps identify different revenue streams, and understand what value (besides revenue and profit) each stream produces.
  • Professionals should be able to pick out a company’s value propositions. They should also distinguish propositions from value presumptions and statements, and know the dangers of the latter two.

How Business Acumen Shapes Perspective Selling

Business acumen enables sellers to look at a prospective customer’s business insightfully. Demonstrating a deep understanding of the prospective prospect’s business builds needed credibility. Without credibility, sellers risk being just another annoying know-it-all spewing a misdirected “credibility deck” in a prospect’s direction. Value messaging turns into old-fashioned “telling” if the perspective is not anchored in customer insight.

In summary, business acumen is needed to discover value that is hidden to average sellers.  It opens up a more detailed “map” of all the places where your differentiated value can impact a customer.  I often help clients identify completely new personas and roles within their target companies.  Having insight into how a customer’s company really works helps anticipate everywhere a seller’s differentiation generates value. A tool I’ve developed called “value networks” builds this world-class selling practice into a repeatable system for entire sales teams.

Fee free to comment below or to share this article.  If you would like to talk about building the business acumen of your organization, let me know.  I’d love to help you build that organizational capability.

To your success!