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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 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!

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Best Practices Entrepreneurship Management Marketing Sales Skills

The 3 Levels of Customer Acumen and Which One You Want

Part Four of a Five Part Series.

Customer acumen the third essential pillar of perspective selling.  Consider this situation: you know your prospect’s business in-depth and how your solution perfectly connects to their situation. Still, you can’t seem to make progress on the deal. Why? It’s all because you can’t figure out how they are going to make a buying decision for your proposal.  While also you need the other two, you can’t sell with perspective unless this third pillar, customer acumen, is strong.

To recap, perspective is 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.

This series discusses three foundational “pillars” of expertise (or three legs of a stool) a seller should master:

  1. Business Acumen…The focus of part two. Basically, this 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.  From part three, perspective selling means translating  your product or service into results/outcomes for a prospective buyer.
  3. Customer Acumen…The third pillar

Customer Acumen: Expertise in Customer Decision-Making

In contrast to business acumen, which helps you understand a prospect from a business/operational standpoint, customer acumen seeks to understand your customer from a social/human standpoint.

I recall a former colleague saying that “every [B2B] customer makes every decision differently…every time”.  By this, he meant that every group buying decision dynamic changes over time, sometimes subtly, but always importantly.  Even if your current opportunity pursuit seems like a straight clone of the last pursuit at the same customer, you shouldn’t simply clone your opportunity pursuit.  Mindlessly repeating the past is one of the easiest – and most serious – mistakes you can make.  To avoid this mistake, customer acumen gives sellers the ability to master each buying decision on a case-by-case basis..

The best sales people approach each new opportunity trying to learn the group decision dynamic currently in play…including in repeat buyers.  Perspective sellers approach each new sale on the lookout for key changes.  Sales methodologies (OK,  shameless plug for my favorite, Miller Heiman Group’s Strategic Selling® (…now,) with Perspective®)  help sellers tailor each pursuit to the needs of each opportunity.

Customer Acumen: Good, Better, Best

Upon examination, customer acumen isn’t a binary “you either have it or you don’t” property. Instead, it grows by degree.  Look at the good/better/best descriptions below.  While reading, try to determine where you and your sales organization land:

Basic Customer Acumen:

For clarification, “Basic” is not the same as “zero”; basic customer acumen represents progress for some organizations.  Here are some characteristics to help you identify that you’ve progressed to this level:

  • Sellers no longer pursue “single-threaded” opportunities with a single persona, counting on that person to facilitate a decision within their own organization..
  • At least for the main value proposition communicated by marketing and sales leadership, sellers regularly learn all the relevant players, what is each trying to solve for, and their motivations.
  • Even at this level, sellers can provide value-adding perspective, facilitating a buying decision among a group of buying personas making an unfamiliar decision. Thus, it’s useful, but far less than possible

As an aside, the HBR article Dismantling Sales Machine, derived from The Challenger Saleby the same authors, make valid criticism of “sales process” by falsely characterizing  that all “process” exists at this level.  While selling activity-based process often tops out at this level, methodology is just kicking in (click here) to learn the differences in more detail).

Basic customer acumen is better than none at all, but it those aren’t the only two options.

Elevated Customer Acumen:

As they elevate customer acumen, selling organizations emphasize mastery of the customer’s buying dynamic.  Where basic customer acumen focuses on understanding individuals separately, elevated customer acumen seeks to understanding a group dynamic…then successfully navigating that dynamic with the customer.

Sophisticated consensus selling methodologies emphasize this level of customer acumen.  Characteristics of this level look like this:

  • Sellers have — and use — tools to discover the group decision dynamic and solve for it.
    • They uncover if there is a ‘bully” in the group herding them along, or its softer cousin, the “first among equals” player.
    • Sellers learn to uncover any rivalries shaping the dynamic, using personal credibility and coaches.
    • They learn how the budgetary authority makes their decisions, who they consult most closely, who their key lieutenants are, what criteria they emphasize etc.
  • A key indicator of elevated customer acumen is that sellers focus on of customer buying processes, and follow metrics to make sure that their selling efforts are aligned with the customer’s buying process.
  • Additionally, sellers articulate a common theme, or customer objective — for everyone, focusing stragglers back on task, and reducing mission creep.
  • Sellers can effectively introduce new decision criteria to the group, but generally as simple extensions of the main/core value proposition contained in feature/benefit marketing materials.  At this level, though they seldom if ever introduce unconventional value or new personas relating to it (and their accompanying criteria) to the group.

At this level of customer acumen, adding perspective happens in two ways. First, sellers can add value to the decision by helping the group make a case for change.  Second, sellers can introduce new value/unanticipated outcomes to the customer…generally restricted to the core value proposition.

World class customer acumen:

Often, a solution delivers value outside the conventional value proposition(s) communicated in basic and mid-level solution acumen. For example, piece of hospital equipment (typically sold to lab personnel, doctors, finance, and purchasing) could reduce error rates, the third leading cause of hospital deaths.  Unsurprisingly, risk managers — well outside of the core value proposition, and outside of the typical collection of personas — cares deeply about. While good sellers can communicate value to the familiar buying personas, elite sellers articulate these next-level outcomes to personas outside of the typical buying group.

World class customer acumen has a few defining characteristics:

  • Sellers understand their offer’s value picture outside of the conventional selling box.
  • Whenever it yields a value advantage, sellers recruit new personas into the decision dynamic,  They can discuss value in a persona’s language, describing persona-specific outcomes. As the prior two parts of this series indicate, solution and business acumen are key foundations.
    • As a result, world class sellers regularly “pack the court” in the decision group by adding players supportive of their solution.
  • They can discuss any and all value drivers at C-suite level, translating it into C-suite language and outcomes.
  • Truly elite sellers can sell so effectively at the executive level that they get “introduced down”

Elite sellers introduce unanticipated value.  They are skilled at adding new personas to a decision team in order to leverage that value. Certainly, most selling methodologies teach sellers how to contact new personas and have meaningful conversations.  Unfortunately, I see too few teaching why or when, much less how to have conversations in a new persona’s language.  Without business and solution acumen, your selling organization will struggle to bridge this gap.  This is why the three acumens form a three legged stool that topples if any leg is missing.

So…

So…where did you land?  Do you know how to elevate yourself and your team to the next level?  Want to talk about it?

Excellent sales people are strong at all of the levels described above.  High-performing sales organizations develop all of these capabilities in their people.

How do you build customer expertise into your sales force? If you’re interested in learning more about how World Class organizations generate their exceptional results, share your questions or comments below. Feel free to contact me directly for more information.

To Your Success!,

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Human Resources Personal Development Sales

Know Your Product/Service Through the Customer’s Perspective

Part Three of a Five-Part Series.

You need solution acumen (product or service…applied to the customer situation) to craft win-win solutions.

Previously, I introduced 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.

Then, I introduced a three-legged stool: the three foundational areas of expertise a seller should possess:

  1. Business Acumen...The focus of part two. Basically, this type of expertise equips you evaluate a prospective customer’s (or any company’s) operational efficiency and effectiveness, then identify value gaps.
  2. Solution Acumen.
  3. Customer Acumen…Where we will go in part four

Today’s topic:  Solution Acumen

First of all, solution acumen is waaaaay more than simple product knowledge. I’ve met sellers who are experts on their products/services, but have only a vague inkling why a customer might care.  Consequently, they have product knowledge without solution acumen.  Ultimately, here’s the source of the disconnect:

Customers don’t buy our products or services.  Instead, they buy results. That is, they buy outcomes our products or services deliver into their lives and businesses.

Importantly, solution acumen means that you can articulate a relationship between properties of your offer and customer-valued outcomes. Knowing your product or service is something.  Knowing all about how your product or service adds value to a customer is everything.

In addition, the price they’ll willingly pay for your solution depends on clarity, certainty, and desirability of those outcomes.

Ultimately, profitability happens when you provide more value for your customer than it costs you to produce. You can only price profitably in two ways: by accident, or by understanding – and pricing to – your customer’s outcomes.  To achieve the latter, you need solution acumen.

What Solution Acumen Typically Looks Like:

Generally, solution acumen comes in degrees.  As sellers go from basic product knowledge to full solution acumen, here are some of the identifying characteristics:

Basic solution knowledge includes:

  • Specs, performance…information a subject-focused persona wants to know.
  • Available product or service options. At a basic level, every seller should understand how their offer can be stripped down, augmented, and/or bundled.
  • Commercial policies.  Similarly, basic-level  knowledge includes ordering procedures, lead times, implementation basics, pricing, available discounts, and the like.
  • Competitors: An essential understanding includes basic competitor profiles, product descriptions, etc.

Intermediate-level offer knowledge might look like:

  • Typical configurations offered, even configurations commonly purchased for specific segments.If your company has developed a standard “small business package”, this mid-level knowledge has been institutionalized.
  • Commercial policies: Above basic level, understand discounting flexibility, how the pricing exception system really works (how the game is played in your company), have complete knowledge of any implementation process, how to expedite orders, etc.
  • Competitive differentiation. In this area, sellers can articulate competitive differences, and confirm/gauge strength of customer reactions to those differences.

Advanced knowledge, aka Solution Acumen is outcome-based, and is characterized like this:

  • Applications/use cases have been modeled, and all affected buying personas’ interests can be articulated.
  • Sellers can map competitive differentiation to customer outcomes. As an aside, my value networks are one way to do this.
  • Ability to brief implementation teams with persona-specific outcomes identified during deal pursuit. A key part of solution acumen is delivering on world-class outcomes after the sale.
  • Additionally, sellers move beyond descriptions of outcomes to quantifying them (measuring outcomes in monetary terms) with prospective customers. Also, instead of mastering the ins and outs of discounting, sellers master upward pricing flexibility: understanding attainable price premium and the required customization in order to fairly and legally price at a win-win price premium.

How Solution Acumen Shapes Perspective Selling

Solution acumen enables sellers to build connections between their offer and customer-valued outcomes. To see how, look at the Venn diagram below:

Customers have value gaps, shown on the left oval.  That is, they have unmet needs and aspirations. Suppliers differentiate themselves through unique capabilities. With solution acumen, sellers’ capabilities are expressed in customer terms — outcomes,– so that customers overlap the two ovals.  Any overlap represents where sellers can provide value. Only in this overlap is where sellers perspective welcomed.

Solution acumen increases as sellers more clearly translate the right-hand oval from “we provide ____” to “you achieve _____”. In fact, this is why solution acumen is so important.  As a result, sellers who clearly articulate a cause/effect relationship between offer/outcome become trusted business advisors.

With perspective, sellers can add to the overlap by:

  1. Proposing new possible outcomes,
  2. Framing the customer situation differently…in a way that promises a better outcome
  3. Framing the decision differently…again, to yield a valued outcome.

Remember, customers don’t care about all of your capabilities, even if they are unique to your offer.  Until they can clearly see one of your capabilities enabling a valued outcome, you risk showering them with irrelevance. For this reason, “perspective” outside of a customer’s desired outcomes isn’t really perspective at all.

Solution Acumen: One Key to Perspective Selling

Remember, because customers buy outcomes, perspective sellers need to articulate them.  Optionally, sellers can tell stories, give fresh insights into a customer’s situation, ask questions to get the customer to consider new issues for themselves…in any combination.

Solution acumen is not the ability to explain seller capabilities as features and benefits.  Instead, it’s the ability to translate their product or service into customer outcomes, then to extend single outcomes into follow-on outcomes.

In conclusion, solution acumen is what connects the seller’s offer to customers’ value gaps.  While some sellers can do this naturally, most need help.  To do this, I help sales organizations revamp their sales materials and product training materials to establish high-level solution acumen organization-wide.

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

To your success!

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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!

Categories
Best Practices Personal Development Sales

The Importance of Perspective in Sales

Part One of a Five Part Series.

You may have heard the similar terms perspective selling, insight selling, challenger selling etc. and wondered what the big deal is. Are these passing fad or enduring principle restated? Good news: while the promotional buzz is relatively recent, they all trace back to some solid behavioral and decision science.

The bad news: insight/perspective selling is not simple “selling by telling”. Unsurprisingly, the magic pitch (aka the value message that turns prospects into pliant buyers) is dead. It’s been dead in consumer sales for a long time. And having been consumers, business buyers have lost their tolerance for pitches, even magic ones.

Each of the terms represent a similar idea. I mostly use us the word perspective, but I’ll sprinkle synonyms in.

What is it?

The Miller Heiman Group has one of the better definitions I’ve seen:

Perspective is knowledge or insight that expands a customer’s understanding of one or more business issues. When a seller provides perspective, they apply insights and expertise which increase customer perceived value.

What’s so great about it?

The whole point of selling with perspective breaking into the circle of trust.

According to CSO Insights 2018 Buyer Preference Study, business buyers view vendor salespeople as one of their least preferred sources of information. Salespeople ranked ninth out of ten information sources mentioned by buyers, ahead of only professional trade associations. Ouch.

The news gets worse. Because buyers don’t think sellers add value, buyers don’t engage sellers until they’ve identified their own needs and narrowed down to a self-prescribed solution. Then, when presented with a predefined solution, vendors (predictably) find it hard to differentiate themselves or to exceed expectations. Thus, sellers reinforce their initial impression of buyers, and a cycle is formed.

In short, once the customer has pegged you as an unremarkable seller, you are stuck in a no-value feedback loop that’s difficult to escape. Your goal should be never to enter this cycle.

Happily, buyers are willing promote sellers to “trusted advisor” status, especially when decisions are risky, complex, or unfamiliar. Sellers must simply add value to the buyer’s decision process…from the first contact, and every contact. That means providing valuable insights: selling with perspective.

What Perspective Does For a Customer…

Essentially, a trusted advisor produces new value in a customer’s buying process. This can include introducing new decision criteria, new ways of looking at a situation, or introducing new outcomes. Generally, new criteria and points of view are impactful when they enable or assure outcomes.

There is strong neuroscience and psychology research behind perspective selling. Since customers buy outcomes (not products or services), perspective is the art of opening a prospect’s eyes to new possible outcomes. Perspective triggers the mental process of visualizing outcomes. Visualizations can be spurred in the customer’s mind when sellers:

  1. Ask well-crafted questions which guide the prospect to see their situation in a new way and ultimately to identify (then value) new outcomes.
  2. Tell them something they don’t know – the specific technique proposed by The Challenger Sale. Half of Challenger sellers are low performers because they miss a key factor. The challenge statement only spurs the visualization process when the seller has established credibility. Some use “sales-ready value statements”, “value messaging”, and the like to describe such “perspective telling”.
  3. Tell stories which engage the buyer’s imagination to visualize an outcome for themselves. The human brain responds powerfully to story-telling; stories engage a visualization process, and telling stories about applicable outcomes is a great way to provide perspective. Recently, storytelling is achieving big buzz in the sales world. It’s a great neuroscience-based addition to a seller’s perspective selling arsenal.

Sellers should always combine the last two with the first. Telling a story or making a value claim may “expand a customer’s understanding”, but only questions confirm whether/how firmly any new perspective took hold.

Perspective selling harnesses the most compelling buying behavior: getting prospects to see desirable outcomes for themselves. Getting the most out of perspective selling means selling to full value, which I’ll discuss in part five of this series.

What perspective takes.

In order to consistently provide perspective, sellers need to predict outcomes likely to be customer-valued. Then, they engage in conversation which gets customers to visualize an outcome. Producing valued perspectives requires three types of acumen:

  1. Business Acumen. In order to expose new outcomes to a prospect, you need general business knowledge to predict outcomes. With business acumen, a seller can create new value. In my next article, I’ll cover this in more depth.
  2. Customer understanding. Sellers not only need to have insight into the customer’s business, they need to master the decision dynamic at a customer. Part three of this series will expand on this.
  3. Solution Expertise. Finally, sellers need to understand not just their product or services features and benefits. Perspective requires that sellers translate features and benefits to outcomes. In part four of this series, I’ll cover solution expertise in more detail.

It’s simple to learn, a lifetime to master.

To really master insight and perspective, you need to understand the building blocks. When you look at perspective selling within the framework of providing customer-perceived value, your ability to provide deeply insightful perspectives will increase.

Comment below, or contact me directly to share your perspectives on this article.

To your success!

Categories
Best Practices Sales Skills

You Need Both: Sales Process AND Sales Methodology

In the sales performance space, there are those who think sales process and methodology are the same thing, and those who realize they’re different. If you couldn’t tell which side of the debate I’m on, they’re different, and do different jobs.

Some of the confusion is that both are kinds of process, although methodology isn’t always as predictably sequential.

Process:  Selling Activities.

The term selling process refers to the actions a selling organization takes along its selling journey. These steps might include (but might not be limited to):

  • Prospecting
  • Qualifying
  • Needs Analysis
  • Demonstration
  • Proposal
  • Negotiation
  • Close and Implementation.

When these are detailed sufficiently, people throughout the selling organization know what deliverables they need to support the process at what times, what documentation is expected, what resources are typically required, and much more.  Process grows into a “playbook”.

Notice that these are seller-centric activities.  Once your company builds its sales process, this are a great way to track an opportunity pursuit through your funnel or pipeline.

Today’s CRMs are mostly built around processes.  They usually come with a generic process provided, and one of the first thing a company needs to do is define their process in that CRM.  Manager dashboards will also be boilerplate at first.  It’s commonplace to track selling activities like calls made, emails sent, lunches bought, demos scheduled, and more.  Once you have management reports and analytics defined and refined, sales managers can track a lot of activities really efficiently.

There is one thing missing from sales process:  the customer’s buying process.  Tracking only selling activity fulfills the great promise of  CRM when:

  • All customers buy the same way
  • Every customers is equally engaged
  • All customers have the same needs
  • Customers respond equally to the same “value messages” (a term I really disrespect.I’ve blogged on this before, and am likely to do so again in the near future).

Every sales professional knows what doesn’t happen when they keep churning through a sales process while a customer has not progressed through a buying process.  Methodology solves for that.

Methodology: Selling Behaviors (which engage a buying process.)

Sales methodology consists of trainable, coachable, trackable selling behaviors that engage a customer in a buying process.

It’s easy to measure process, like number of telephone dials (especially with CRM/phone system integration). Measuring number of quality conversations is hard.  Don’t do either in isolation.

Ironically, I hear sales leaders tell anyone who will listen that they need to measure quality and not quantity…while looking at sales process analytics.  The reason that they’re achieving the results they may be because they’re measuring activity.

Methodology…behaviors…keeps the sales process aligned with the buying process.  Methodology behaviors might look like (but might not be limited to):

  • Understand the buying process being used
  • Understand all of the buying personas.
  • Planning and executing meeting plans to uncover all needs, all desired outcomes, and the value of all of those outcomes to the various personas.
  • Building a case for change, including adding personas where your value warrants.
  • Cultivating internal support for a proposal.
  • Aligning demonstration, then proposal points to persona outcomes.
  • Building the value case
  • Facilitating any customer change management, and setting implementation up for success.

Because every customer buys differently, methodology tends to be less rigidly sequential.  The customer buy process drives methodology, but should generally track with a well-designed (that is, customer-centric) selling process.  For example, change management appears prominently near the end of a sales process, but methodology should have uncovered individual persona outcomes and developed supporters of the change all through a pursuit.

Process vs. Methodology:

 First, I should point out that by “vs.” above, I don’t mean that there is an either/or choice.  You need both.  The “vs.” is because I want to contrast the two to show why you need both.

Process vs Methodology Table

Process organizes and orchestrates the complex web of selling organization activity around selling and delivering the company’s offer.  Methodology organizes the selling organization’s effort to facilitate a customer buying decision.

Sales process is measured by activities, which can be measured by any current CRM system I’ve ever heard of.  Methodology is about selling behaviors; only a few exceptional CRMs track behaviors, although most can be modified to do so.

Sales process, as simple activities, can generally be learned and mastered via a straightforward “knowledge transfer” class of training.  Methodology involves behavior change, and requires some element of coaching to lock in behavior change.

Process adoption and compliance results in selling efficiency, whereas methodology focuses on building customer-perceived value of your offer.  Great methodology drives customer value, which makes selling more effective. Efficiency and effectiveness can both drive up sales, but in different ways.  Efficiency might mean churning more prospects through a low close-ratio process each month.  Effectiveness could mean increasing the close ratio.  They aren’t mutually exclusive. They are synergistic.

Don’t Confuse the Two.  Don’t Limit Yourself to Either/Or.

I hope that you found this compare and contrast article useful.  Process and Methodology are both worthwhile pursuits. I help clients with both, and they feel different.  Please comment below, or contact me directly if you have any detailed questions.

To your success!

Categories
Best Practices Management Personal Development Sales

Help Me…To Help You.

If you’ve ever read an article you liked from me, thank you (whether you hit a “like” button or not). To keep the research-based quality of my articles up, I need something from you.

Here’s the thing:  The time I spend writing is dwarfed by the time I spend reading and studying.  I want to be the person who can consume information and curate key insights for my readers.

One of My Main Resources is You.

Indirectly, at least. I have been called a data hound. Sure, I read a lot of books from authors in the fields of economics, marketing, psychology, leadership, and more. I also consume research, and always have. Research is built when people like you invest your time in a researcher’s data gathering.

A key research source that I use in my articles is CSO Insights.  They are the pre-eminent research house for sales intelligence.

  • They have the world’s foremost authorities on Sales Enablement
  • They conduct the world’s most complete and insightful research on Sales Operations.
  • They have the world’s most sophisticated tracking data into best practices in B2B sales.
  • They are the world’s best resource for benchmarking data. They help you answer questions like “is my attrition rate something I need to do something about?”
  • Their Study of Sales Performance helps leaders know what works and what doesn’t.
  • They study buyers.  Because of CSO Insights, I can keep up-to-date on how buyers want to buy, and what kind of sellers they want to buy from.
  • Their data drives talent and hiring tools to help you hire the right people, and put them in the right roles.
  • They produce the information I use to help clients put the right analytics in place.

In short, these are researchers who build the data you need most in order to do your job.  When people contact me for advice or help, it’s informed by this research, among other things.  I’m grateful for all of those in years past who have contributed their time.

You Need Me on That Wall.

Even if you don’t want to read research yourself, you benefit from it.  When you read my articles, you are consuming this research indirectly. If you find value in what I write, you benefit from CSO Insights’ work product.  For those who have asked me for insights, I have an admission:  it’s not just my brilliance.  My advice relies on people who gather hard information.

Please help me to help you. This year’s Sales Practices study is open, and I respectfully ask your help by participating. Especially if you’re in a leadership role in the sales, sales operations, sales enablement, or corporate management disciplines.  I know that surveys are tiring, but this one’s important..

And I Need You…Your Time, at Least.

For those who wonder if this is going to lead to a sales solicitation, the answer is no.  I will repay your time with mine if you want, though. Use this link and, if you provide your name, I’ll not only send you my personal thanks, I’ll make sure you have access to research reports (if you want them.).  Following up with all of you who respond is becoming a time investment, but I am happy to do it. Of course, you’ll also continue to see the research reflected in my articles.

Thank you, and I look forward to being notified that you helped, when you use this link.

Categories
Best Practices Human Resources Management Marketing Personal Development Sales

There Are Two Kinds of Training. Only One Works.

For as long as I’ve been working, I’ve experienced training. We all have. We also know that it doesn’t’ always “stick”. This is especially true of sales training. Let me share one big “why”.

As my role transitioned into sales leadership, and now consulting, I had to figure out why some training works better than others. When an initiative involves training, whoever owns the results of that initiative (sometimes different from who leads the training) must understand why…and what to do about it.

There Are Two Kinds of Training.

The two kinds of training are really related to two kinds of content:

  1. Content that trainees can “know”.By this, I mean that information in the training is simply transferred with little or no behavior change. Examples in the sales world are how to prepare a bid or enter an order, or how to find collaterals. General examples might be how to log into the company networks or get help, where to go for an access badge, etc. In banking, we had “how to spot and report possible money laundering” training. The point: learning is simple knowledge transfer. Training works fine for this kind of content.
  2. Content that addresses what trainees “do” (behavior content).A lot of sales training falls into this category. It introduces and defines specific selling behaviors…perhaps with some role-playing for practice. A training department might erroneously measure “success” via post-course content retention testing. By contrast, the vice president of sales owns results responsibility; for him or her, success means permanent behavior change. Millennial-friendly hip multimedia content, video role-playing or easily digestible micro-eLearning modules won’t change behavior. These innovations are great at achieving “know”: they effectively transfer knowledge and introduce desired behavior, but they don’t drive behavior change.

The second kind of training doesn’t work…without help. Behavior change training alone works for only a very small percentage of self-starting and highly capable sellers.

I have watched many companies fail to distinguish between the two kinds of content. As a result, they unconsciously cripple a “sales training” initiative by applying a “know” solution to a “do” problem. They fail to adequately reinforce behavior change after a “do content” training event.

Changing Behavior is Simple, But Not Easy.

The difference between “know” content and “do” content is the level and type of follow-up required. “Do” requires follow-up coaching. Until recently, coaching required a personalized coaching regimen delivered via old-fashioned human interaction. (more about new innovations in that area below). The graphic above shows a table of the difference between a training event and coaching for “do” content. Notice how coaching focuses on adopting or changing behaviors. The differences are pretty self-explanatory.

The gold standard of coaching behavior content is and has always been manager-delivered. Due to the one-on-one nature of effective coaching, a seller’s immediate manager is the logical person to deliver effective coaching.

I was one of the first in my company to become fully certified in the full suite of (Miller Heiman Group) coaching methodologies. I now help not only my own clients, but those of several colleagues to build coaching acumen in their management corps. It’s a hugely rewarding part of my consulting practice: I grow sales careers by growing sales managers’ careers.

Artificial Intelligence (AI) Comes to Coaching

The promise of AI is that it can act as an expert system that tirelessly monitors behaviors looking for gaps. An AI system has the time that a sales manager lacks. This is a powerful management tool. It also requires a huge underlying data set to “teach” the system to recognize both behaviors and behavior gaps.

I work with one of the first systems capable of recognizing critical selling behaviors. It diagnoses selling gaps proactively. It’s able to spot deal risks and recommend corrective selling behaviors in time to change the deal trajectory, a major innovation. This system operates from an expert system database built from the deepest experience base in existence: the largest, most successful B2B selling organization in the world. This knowledge base is poised to become the first to use machine learning (one form of AI) to diagnose sales opportunities via CRM data. This requires a different CRM that collects behavior data rather than today’s usual “activity-based” tracking. For instance, you can’t coach from “how many calls did this salesman make”. You can coach from data about meaningful conversations. CRM data isn’t today’s activity-based tracking; it’s metrics with insight into a buying decision…selling behaviors.

While personal coaching is still the gold standard, an expert-based system focusing on selling behaviors lightens the load on front-line sales managers. Sales managers are a very overloaded group, and can use the help.  A system which can automatically catch and notify sellers of the most common behavior gaps allows managers to concentrate their coaching on higher-value issues. Managers can follow up when sellers don’t react to machine-based suggestions, coach for more subtle points, etc.

Don’t Address a “Do” Problem With a “Know” Solution

If you and your company want to embark on a sales performance improvement journey, make sure your plan distinguishes between “know” and “do” content.  Then make sure that you do “do” correctly: with a robust coaching component. Also look for a solution which has a clear future into automated ongoing coaching using AI or some similar technology.

If you’d like a fresh set of eyes on your situation, I’d be happy to spend some time hearing your situation out, and your thoughts. Contact me at mark@boundyconsulting.com if you’d like to access a free sounding board. Comment below if you have any additional insights or questions to share.

To your success!

Categories
Best Practices Investing Personal Development Sales

Your 2019 Resolution: Control the Suck of Discounting Expense

There is almost nothing you can do for your business with a higher financial payback than getting your arms around your discounting practices. I want you to make a New Year’s resolution to put rigor and discipline around your discounting (some call it “pricing exceptions”) policy and processes.

Why is this so important for your business?  Simple math.  When you sell your product or service to a customer, your costs to fulfill your part of the deal are the same—regardless of whether you discounted or not.

Discounting changes only two lines on your P&L statement: the top line and the bottom line.

When you grant a discount, every dollar you surrendered comes off of your bottom line, and goes to the customer’s.

For an operating business, your profits are made at the top line.  A pricing and/or discounting decision is what drives profits.  Once you see a number on the bottom line, it’s too late to do anything about it.  Discount expense sucks the life out of companies.

Resolution Part #1. Take Stock of Your Current Discounting Practices.

I am thrilled to help my readers analyze where their discount dollars go and their system for allocating those dollars. Let’s examine how you make discounting decisions together.  If you’d like to prepare, or go through the exercise on your own.  Some of the questions we’ll go through:

How many discount dollars do you spend per year?

  • Formal, through an exception process?
  • Invisible, through salesperson autonomy?
  • Does everyone in your company know that discount dollars=profit dollars? Do they act like it?

What is your price exception/discount process now?

  • What are the steps?
  • Who are the players?
  • What information/documentation is used?
  • How is the discount justified?
    • Is customer value measured/characterized? How?
  • Do you always know what the customer thinks of yours andthe competitor’s value (or just their price)?
  • How consistently do your people follow your process?
  • Have you (or can we) analyze how discount dollars are distributed? Are there concentrations by territory/salesperson, region, customer, industry, time of year?  Can we explain any apparent anomalies?
  • What do we get in exchange for price concessions?Are there any salesperson/regional/market trends in that data?

What These Questions Uncover.

The first thing we’ll discover is how well you track discount dollars. Since every one of these dollars is also a profit dollar, you need to know where every one goes. If you don’t know where your discount dollars go, your business is leaking profits.

The questions above help both of us understand how you make pricing and discounting decisions, where the discount dollars go, and if there are any suspicious trends.

Are my discount dollars being over-allocated toward:

  • The whiniest salespeople?
  • The favorite salespeople?
  • The whiniest customers?
  • A certain market?
  • At a certain time of the month/quarter/year?

That last one frustrates the heck out of me: I’ve held P&L responsibility, and have never felt that an unprofitable booking this month beats a profitable booking next month.  I’d feel that way even without the perversion of what month-end discounting teaches my customers.

I also want to explore the basis of discounting (whether/how much) decisions.  Squeaky wheel?  Best at gaming the system?  Price-based? Or…value based?

The Gold Standard of Discount Systems:  Customer Value Based.

99% of the time you hear “your price is too high”, what the person is really saying is either “your value is too low”, or “I’m inviting you to help me understand your value”.  I specialize in helping my clients have those discussions effectively. I can point you to a methodology which will steer those conversations toward value and away from price…and certainly away from unnecessary discounts.

If you have a solid methodology for understanding customer value, some great things happen to your discounting practices:

  • Discounting is purposeful. It no longer feels as random or arbitrary.
    • Your people will understand the system and feel more fairly treated
    • You might quiet the squeaky wheels; the people who scream the loudest for discounts.
  • You will be confident in your discounting decisions.
    • You’ll make better decisions about product enhancements, market entries, even market exits.
  • You will discount less and profit more.
  • You will produce more accurate forecasts. Knowing customer value is the same as knowing customer motivation. When you truly know value, you are intimately engaged with the customer’s innermost buying decision dynamics.

Resolution Part #2. Build A Value Based Pricing/Discounting System.

I can help you if you want.  Here are some options:

1. I’m feeling pretty good about the latest draft of my book on the subject.  If you’ll give me merciless feedback on it, I’ll send you a .pdf copy to review.  The book will guide you toward developing a better pricing/discounting system.

2. Let’s talk. Reach out at mark@boundyconsulting.com.  If you want to work toward a system together, prepare for our call by looking through the “take stock” questions above, and  prepare any questions for me.

Whatever you do, and however you choose to get help, please do it. The road to failure is paved with poorly justified discounting decisions.  I want you on a better path.

To your success!