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Boundy’s Bookshelf: The Coaching Effect

I just read – and highly recommend – The Coaching Effect, What Great Leaders Do To Increase Sales, Enhance Performance, and Sustain Growth by Bill Eckstrom and Sarah Wirth.

Besides my involvement in teaching, guiding, and practicing coaching with clients, I read a lot about sales management and coaching. In fact, I was one of the first in Miller Heiman Group to be certified in their full sales coaching suite.  I wondered if I would pick much up from this book, and am pleased to say…yes, I did. I will be supplying this book to sales transformation clients from now on.

Coaching by Your Front-Line Sales Managers Improves Sales Performance

Based on over 100,000 real-world coaching interactions, this book shares some of the research behind its recommendations.  Most important:  Sales teams with great coaching average 110% of goal, vs. 91% of goal for the bottom 80%. Think about that. The most effective teams have the most effective leaders…the ones who behave like great coaches. These teams outperform the average team by over 20%.

I’ve seen similar data from other sources, including CSO Insights, who I consider to be the gold standard.

Anecdotally, I experience how focusing on coaching is the primary differentiator between successful sales performance initiatives…and those that fizzle.  I buy the difference coaching makes.

What’s a Good Coach?

Eckstrom and Wirth go into depth on what great coaching looks like.  The first thing that struck me was how seldom we measure coaching quality.  Most practitioners stick to the easy-to-measure stuff like quantity (more on that below).  The authors have a robust scoring system for the quality of coaching that’s as simple as it is intuitive and effective.  They measured major themes of impact/culture, relationship, cadence, and ability to wring performance improvement – each of which is broken down into components.

The second striking finding is that “quality” is measured in the eye of those being coached. This seems obvious to a guy like me who regularly harps that value is only in the mind of the customer.  Of course, that’s how you measure great coaching.  So why do so few other people do it?

A third, not-so-striking finding: the best coaches have their “coachees” best interests at heart.  Think about it. Coaches who have their subordinates’ trust are the ones with permission to push them to greatness.  Yes, this is everyone on your team, not just those oft-maligned millennials.

The Four Pillars of a Great Coaching Culture

My “coaching acumen” improved. The research behind Coaching Effect broadened my idea of what a great coaching culture looks like.  Eckstrom and Wirth describe four pillars (my term, not theirs) that sales leaders need to implement as part of a consistent coaching cadence.

  1. One-to-one meetings: Coaching Effect teaches that these are higher-level-than-you-might-have-thought meetings. They cover a seller’s personal updates, long-term goals, daily work, and priorities…combined with offers of manager support. It turns out that quality is far more important than weekly frequency.
  2. Team Meetings: Again, the research shows that quality is more important than frequency.  Meetings that share best practices, share successes, discuss team-side issues, etc. (the book has a lot of great examples) might be monthly, with as-needed team huddles on a given specific timely issue.
  3. Performance Feedback: This is where I’ve focused most of my own work, and I’m glad the authors and I agree on approaches.  There is solid advice on how to approach performance issues, using what another author called “compassionate directness”.  The personal updates and focus on long-term goals from one-on-ones build trust that’s needed during more difficult feedback conversations.
  4. Career Development: Isn’t it crazy how few coaching programs formally introduce career development into the regular coaching cadence? Great coaches use this component to inspire “discretionary effort” (I love that term, Bill) on the part of sellers.  There are great examples of specific actions a coach can engage in to become a meaningful force in the career of his team members.

Two Thumbs Up

As I said, this book helped me clearly articulate the differences between average and great coaching, and any serious sales leader should invest in it…and themselves

To your success!

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Best Practices Investing Management Personal Development Sales

Selling Value: It’s No Longer Enough

Selling value is great, but it isn’t the solution it used to be.  The world – and customers — have changed around static solutions, and now we need to rethink the whole idea of selling value.  Selling Value can no longer be the responsibility of any single corporate function.  It needs to become a company-wide culture.  Specifically, we need value-focused culture, or simply Value Culture.

There are four reasons why selling value is no longer good enough.

Sales Have Lost the Handle on Full Value

For many years, companies have delivered sales training to sales organizations, and salespeople have improved how they sell. The sales training industry has established “world class sales” is something that exists inside of the sales silo. Now, we have extensive research on what “World class sales performance” looks like…but only viewed within the arena of sales, sales ops, and sales enablement.

The business world has shifted around the sales performance industry, though.  For the past few decades, though, companies have splintered their customer interface into many specialized roles:

Sales (hunters), account management (farmers), business development, inside sales, technical sales, demo specialists, sales development (appointment setters), installation, customer success, tech support, customer support, operations, finance, underwriting…

Salespeople don’t contact — much less have credibility with – all of the customer personas these specialist roles work with constantly.  “Sophisticated” companies train their specialists to deliver a great “customer experience”: customer interactions which promote the brand promise— or at least, eliminate weak links in the customer arc.  That’s not remotely what’s needed. Customer experience training doesn’t equip anyone to discover any of the value gaps from their unique vantage point.

Any company not training every customer-facing role to uncover potential value is failing to leverage potential competitive advantages.

Selling Value Has Come To Mean Less and Less

Even for Selling organizations who haven’t splintered, selling value has become less and less effective.

Customers have splintered and siloed themselves as well.  Your product or service touches more customer specialties than it used to…even if it didn’t become more sophisticated and capable.  Dividing your total value proposition into narrower and narrower customer slivers can reduce the total value your salespeople sell.  Every specialty your sales people fail to bring into the buying decision represents less value offered.  Selling value doesn’t have the same impact it used to.

Sales organizations need to navigate more complex customer organizations.  Meeting this challenge means raising the level of business acumen in your selling organization to find more “value leverage points”.  Sellers need to combine business acumen with customer acumen to find those leverage points in each organization they encounter.

Value Selling Seldom Leads to Value-Based Pricing…

 Frankly, I’m not very impressed with many current “value selling” methodologies.  Average sales training teaches reps to apply benefits to each single persona. The best value selling methodologies only teach reps to sell beyond benefits, to customer outcomes…which is value. I haven’t run across any (OK, anyone else’s) value selling methodology which influences a customer to build their own cost impact statement of those outcomes.

Current value selling helps win sales, but is only short putt away from selling at a profitable price. I love winning a deal as much as the next guy, but I’ve help P&L responsibility: what’s the point of winning a barely-profitable deal?  Your company lives on profits:  a profit stream – not a revenue stream – is what funds innovation, investment, all of your fixed costs…and yes, commission checks.

Pricing is Profit.

If your value selling initiative doesn’t draw a clear, bright line to selling at a value-based price, you’re dropping out of the race with the lead…in the home stretch.

Hoarding Value Insights Cripples Your Company

Value uncovered by the sales organization …used to win sales…even at a value-based price…can represent a few open loops in a company.  An organization-wide value culture closes these loops.

Value insights gathered via value discovery need to inform many other organizations in your company:

  • Marketing. First, content can be tightly focused on the value your company is uniquely positioned to offer.  Clicks and opens relating to those value points are worth infinitely more than those on more generic click-bait content.  Leads that germinate from outcome-based content are gold.  Crap content generates crap leads.  Second, you have persona-focused value insights which can drive tightly targeted, highly relevant sales support content. Collaterals that focus on specific “buying journey sticking points” are deal-movers.
  • Product Management and product training. Product training that describes persona-specific outcomes is the gold standard that few organizations practice.  Roadmaps and product strategies informed by a rich database of value insights are also far too uncommon.
  • Innovation. The virtual call center, a staple of today’s world, was invented at a cost of zero (OK, we had to develop a few new powerpoint slides), simply by combining two products together.  The key to this innovation was a value insight.  When product developers have a deep well of value insights to draw from, inventions and innovation are radically improved.

Your World has Changed. How Will You Respond?

To combat these evolving challenges, you must establish a value-oriented corporate culture.  Culture crosses silo boundaries, countering the unintended consequences of specialization.  There are techniques, tools and technologies that can help.

If this resonated, or spurred some thoughts, like, comment or share. If you’d like to talk further, 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 Management Marketing Personal Development Sales

The Secret of Selling … and Business: Mind the Value Gaps

Selling — and business — isn’t about what your customer says they want as much as it’s about what they value. Sure, translating from the first to the second takes skill, but that’s the reality. Customer value is at the heart of sales, marketing, customer experience, innovation, operations…everything in your business.

Value is the energy – the unseen force behind all business. Without value received in each direction, no transaction would take place. More profoundly, it drives every part of a customer’s buying process, like reading an advertisement, clicking on a web link, or agreeing to take a sales call. Nothing happens unless a prospect considers each next step worth his/her time. That is, they perceive a value gap: the expectation of a desirable outcome.

For most of the past decade, I’ve taken a deep dive into the craft of selling. However, I’ve always viewed selling not as a siloed corporate function but as a part of a bigger whole, combining my general management, value and pricing expertise with knowledge in sales and marketing. When you treat sales as its own silo, you leave a lot of potential growth and profits on the table.

Customers Buy…to Fill Value Gaps 

Selling skills and methodology training all takes different paths to the same goal: uncovering value gaps, then showing the customer to fill them. These could be gaps the customer understands and describes…or those they don’t know to ask for. The sellers that confine themselves to customer-described value gaps are the ones that look –and sell — like everyone else…and compete on price.

Your expertise in your product or solution means nothing if you aren’t also an expert in your customer’s business. Only then can you help your customer achieve creative, differentiated outcomes.

The Way We Sell Today Leaves Value Gaps Ignored.

Companies silo themselves into functions. This is both good and bad. Silos are centers of specialized expertise, but they are also fertile ground for tribal dysfunction (according to anthropologists who study organizations). Think of all of the functions in your own company who regularly contact your customer. Now think about how many value gaps those “non-sales” roles uncover on a daily basis, but don’t do anything with. Finally, ask yourself what value-creation opportunities you are wasting.

Everyone who comes in contact with a customer should be considered a seller. Then, every seller in your company needs to be attuned to looking for value gaps. More important than closing such gaps when they can: carrying any/all value insights “back to the hive”. When your organization gathers a more holistic view of a customer – and all their value gaps – you put yourself in a better position to compete.

Customers Don’t Help.

Selling companies aren’t the only ones who silo themselves. Even more important, customers try to buy in silos. For example, a piece of hospital lab equipment might be sold to the lab silo, assisted by resources in purchasing, contracting, and perhaps facilities. However, if that piece of equipment fails – or even worse, starts giving incorrect results – think of all of the silos who are impacted. The list includes doctors, nurses, patient records, billing, legal, scheduling (for re-tests), loss prevention, finance, administration…and of course, purchasing, contracting, and the lab silo. Think about it this way: when that equipment is running properly, all those departments are still impacted and are potential areas for innovation and value creation.

Most B2B offers deliver value company-wide, but many sellers are oblivious to anything outside of the conventional selling box. Business acumen helps sellers analyze how an offer benefits to other areas of the company. When all of your sellers have business acumen, they’re equipped to sell outside of a customer’s compartmentalized buying mentality.

Even if you don’t buy into lofty goals like feeding customer-focused innovation, think narrowly and tactically. Silo-limited customers with narrow buying processes lock salespeople into poorly differentiated selling processes. The same organization scheme that focuses on expertise and drives efficiency restricts a broad exploration of solution impacts. If your offer delivers out-of-single-silo results (most do), limiting yourself to within-silo selling is an act of self-commoditization.

If You Invest in Differentiating Your Product/Service, You Gotta Pay for it

When a business generates value for a customer through a differentiated offer (product, service, or solution), a sale is made. Generate enough value and the seller can charge more than their costs. They can then reward their employees for building differentiated products, forge strong relationships with valued suppliers, invest in even more differentiation, and yes, share profits with investors.

As you can see, focusing on value gaps closes a lot of loops in an organization. Your sales silo can strengthen those loops or break them. Unfortunately, some metrics make a sales organization still look good while still delivering profit/value dysfunction. I regularly see scoring systems which focus inside-the-sales-silo only, instead of holistically.

It’s About Uncovering and Closing Value Gaps.

By “it”, I don’t just mean sales. I mean “a world-class business”. All sellers (everyone who touches a customer) should participate in uncovering gaps. Every function in your company participates in closing gaps. Don’t let how you’ve siloed your organization stands in the way. And don’t let your customer’s silos limit the value you bring.

If you want to talk about it some more, contact me. As always, share and/or like if you found this article worth your time.

To your success!

Categories
Best Practices Investing Marketing Personal Development Sales

The Sales Initiative With the Highest ROI

There are so many initiatives to choose from in sales performance area — it can be hard to prioritize, but limiting discounting is a no-brainer.

Which one has the highest ROI?  For most businesses, the highest yield comes from building a systematic approach to pricing and discounting.

Here’s the math.  For the average company making 10% pretax profit:

  • One dollar in new sales yields 10 cents of profit.
  • One dollar in avoided discounting – on all the deals you’re already winning — increases your company’s profits by that entire dollar.

Certainly, every business has different issues and challenges, so exceptions exist.  However, controlling “discounting spend” carries a built-in 10:1 advantage in ROI. In all of my years of experience consulting sales organizations, and leading others, 10:1 boils down to “a worthwhile issue to explore” (being married to a Brit has developed my skill at understatement).

Your pricing and discount approval system might be invisibly killing your company.  If you are a CEO, CFO, CRO, CSO, in Sales Leadership, or Sales Enablement, you are probably suffering a profit leakage. Worse still, many companies aren’t even measuring or tracking the problem.

What’s Your Discount Spend Per Year?

At this past week’s Sales3.0 Conference, I conducted an unscientific “man in the lobby” poll on company processes around pricing and discounting. I had conversations around this question:

How many dollars in discounts did you give out last year? I don’t just mean discounts based upon invoice terms. Include any reduction in price below list, standard, or typical (for semi-custom and custom products).

Nobody I talked to could answer.  Think about that: a significant number of sales enablement and sales leaders I talked to didn’t even track discounts given.  Gut check time:  do you? Given the profit impact of discounting, this begs the question “why?”.

Pricing and discounting is my specialty, of course.  If you would like to address the issue, I’m happy to give you my best thinking about your situation.  Contact me. If you don’t have a crystal-clear analysis of your discount spend, call me anyway.  As you can see from my informal poll, you are in good company.

How Do You Distribute Discounts?

To make you feel even less alone, let me share a few more common situations. Many companies give discount dollars out reactively. Discounts often go disproportionately to:

  • The salesperson is best able to game the system, possibly the squeakiest wheel.
  • Reps reporting to the regional manager who used to be the salesperson above.
  • Whiniest customer.
  • Most politically connected channel partner.
  • ..I could go on.No need to, though, is there?

These schemes not only kill profits, but they also demoralize your salesforce.  Everyone in your whole company knows who gets the discounts.  If the distribution doesn’t make good sense, word gets around.  Especially if you are paying your salespeople on revenue instead of profit, you are steadily stirring a pot of resentment.  Some of your salespeople think that “favors” (a perversion that only sales-compensated teams believe in) are being doled out to select “golden children”.  This can have an effect on morale and retention, in addition to the direct “profit surrender” effect above.

When you discount vs. when you can build value

It’s no mystery that sellers combat discounting by building value in the customer’s mind. I don’t favor the term “selling value” because value is only in the customer’s mind, and “selling” sounds too much like “telling” to the untrained ear. Here’s the thing, though.  As the graph below shows, your ability to build value has pretty much faded by the time the customer wants to discuss price and discounts.

Ability to sell value vs discounting

Here’s the good news: Most sellers need only a few simple tweaks to their regular selling process and methodology, and coaching those tweaks is straightforward for sales leaders.  I don’t want to sugarcoat it, though:  these tweaks require coaching sellers through a behavior change.

Here’s the better news: when your sellers build value,  prospective customers have clearer expectations of their outcomes — financially and personally. Very often, they have a higher preference at a premium price.  It often happens that the premium price is more resistant to competitive price discounts than the lower price you might have agreed to without using good value discipline.

Who Can Build Value?

Here’s the best news of all: it all works even better when everyone who touches your customers is on board.  Your product can trigger value in many unexpected corners of a customer’s company, and the more of these you find, the more value there is to be built.

What does Great Look Like?

A robust, disciplined price exception system can work a lot of ways.  In fact, it may have the same process steps and participants you have now.  The process steps are less important than changing what gets discussed during those steps.

Price exception decisions need to use much more objective information than most do today.  When they do, they are harder to game, and can be deaf to whining.

Coaching salespeople to build value becomes part of the sales culture.  Luckily, this doesn’t have to complicate coaching.  When a seller can articulate value built, coaches know they’ve done a great job with the entire sales process and methodology. It’s only when sellers can’t articulate value that coaches need to diagnose problems with detailed methodology and skills coaching.

Finally, sales shouldn’t be the only department who cares about revenue instead of profit.  That value system keeps sales leaders from making the transition to general management.  It creates culture problems in organizations.  To that end, your compensation plan may need to change.  If your people aren’t paid on profits, they’ll settle for profitless revenue.  Even if you can’t measure profits precisely, pay them precisely based upon a consistent profit estimate

Pricing is Profit.

Every dollar of additional price on a won deal is a dollar of profit for your company. Discounting discipline is a great way to stop profits from leaving your firm.  An investment in shaping up your discounting discipline is one of the highest return on investment places you can apply your company’s scarce resources.  If you know how many dollars in discounts you gave out last year, what would happen if you could only prevent 10% of those lost profit dollars?  20%?  5%? Now compare that number to the cost of other sales performance initiatives you’ve implemented. Does this shape your upcoming priorities?

Contact me if you’d like to explore your situation together.  If you found this post valuable, please share with your networks, like, and/or comment below.

To your success!

Categories
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!