Archive for the ‘sales’ Category

Understanding reciprocity

Tuesday, March 2nd, 2010

Last December, as we prepared to leave for a Christmas trip, my wife rushed to put together small gift packages for the teachers & staff at our sons’ schools.

As I drove around that afternoon dropping off some of the gifts, I would rather have been doing something else–packing, suspending the newspaper, etc. But there are certain things–OK, well, lots of things–where her instincts are sharp & mine are nonexistent. Thinking about small tokens of recognition is one of them.

Last Friday, my wife couldn’t find her mobile phone. She had run a lot of errands that afternoon & couldn’t remember where she might have left it.

On Monday, as I was dropping our 9-year-old off at school, the crossing guard waved & motioned to me to open my window.

“They found your wife’s phone!” he said, momentarily ignoring the kids waiting to cross. “It’s in the office.” And so it was.

All day I puzzled over how they found the phone & knew it was my wife’s. But this puzzlement morphed into wonder–wondering how much that small Christmas gift helped return my wife’s phone to her.

Behavioral economists will tell you that reciprocity is a powerful force in human motivation. The desire to repay a favor or a debt leads to many good things in society (and not a few bad things).

Done appropriately, though, the sharing of small gifts connects people who otherwise would be afterthoughts to you (and vice versa). This connection, when prompted, can provide a spark, a desire to take action, to see someone else’s urgent situation as one of your own.

In selling we must take account of this human motivation. While being respectful of boundaries, rules and regulations, more of us should act like my wife: share small courtesies with the people we encounter because it’s the right thing to do. It’s not about expecting any one gift to lead to a repayment, but instead understanding that making a habit of recognizing people who are part of our lives, even fleetingly, is in the long run karmic.

The unbalanced relationship between buyer and seller – a cautionary tale

Thursday, September 17th, 2009

My colleague had set up a meeting with a prospect. I traveled to the office and we spent time preparing – chatting about the customer, next steps, do we set up a projector? etc. Then, at the time the meeting was supposed to start, the email arrived. “I’m sorry, but I won’t be able to make the meeting,” wrote the prospect.

“Did you confirm the meeting?” I asked.

My colleague shrugged. “Sure, we agreed on this time two weeks ago.”

It’s natural to blame the prospect here. He had agreed to the meeting–didn’t he know how to manage his calendar?

But this example demonstrates something important. We needed that meeting more than the prospect did. Delay won’t affect him much – his work will go on. Delay affects our timing of revenue (assuming we win), or even the likelihood that the prospect will do anything at all (remember “Time Kills Deals”?).

As much as we talk about “value exchange” and “partnering” with our customers, the truth of the matter is that during the selling cycle they are more important to us than we are to them.

And that means, even when a prospect commits to a meeting, we need to follow up – a week ahead (”here’s an agenda for our meeting”), then a couple of days before (”really looking forward to meeting; is there anything else you want to cover?”). Because if they forget, we pay the price.

Related post:
Shop Talk Podcast #1: Gordon Adams on “Time Kills Deals” (worth the listen to experience a truly primitive podcast – they have gotten a lot better sounding, don’t you think?)

The many ways a deal can go sideways

Wednesday, July 8th, 2009

A friend of mine, whose company does a lot of work for state governments, just had an invoice short-paid by over $50,000. The money earmarked for his services simply wasn’t there anymore.

Even a contract (and work done as part of that contract) is no guarantee of cash in the door. And when you’re selling, things are even less predictable.

Let’s assume for a moment that you are trying to sell a deal that has a strong value basis, where your solution is a great fit for the need, a budget has been defined, your references are perfectly aligned and you have a good base of support at the client for your solution.

Let’s finally assume that… there is no competitor involved in the deal.

Sounds like a fantasy, doesn’t it? Well, sorry to bum you out, but even in this fantastic example there are still many ways the deal can fail to happen, and you need to be aware of them.

1. The budget disappears. Monies allocated at the beginning of the year can be yanked away in an instant.

2. Priorities shift. Every company has more it wants to do than it has capital or human resource to take on. If your project gets deprioritized, your sure win evaporates.

3. The last signature on the approval doesn’t happen.
While it’s great to call high, it’s not always possible, especially in big organizations. And companies are requiring higher and higher executive signoff on contracts. Meaning your project is hostage to the priorities, even moods, of an executive you may have never met.

4. Merger/restructuring.
This effect is a combination of the above three. I’ve never seen a merger that helped a deal happen in the short run.

You knew all these already. But it’s worth reminding yourself of the many ways a deal can go sideways. Otherwise, in times like these, when all these situations occur with great frequency, the “uncontrollable” losses will demoralize you and prevent you from doing what you need to do to combat them–getting more leads.

[I'm sure I'm missing some important situations in the list above. If you have more to add, please put them in the comments.]

Related post:
Selling today: casting a wide net and “going for the ‘no’”

Selling today: casting a wide net and “going for the no”

Wednesday, June 17th, 2009

Market segmentation is a very attractive concept. Analyzing a group of customers, comparing it to the capabilities of your product set, and deciding who are the highest-probability targets. Salespeople then focus their efforts on this narrower set of prospects. Sales then follow.

At its worst, though, segmentation allows you to fall in love with a small pipeline. After all, if the prospects are in the target segments, they should be easier to close than an undifferentiated mass.

But these days, negative factors are overwhelming positive factors in buying. In other words, companies’ reluctance to do anything during this downturn means that there are far more automatic “no’s” out there than during boom times.

For the salesperson, as a result, the small pipeline is the kiss of death. No amount of persuasion, reference-sharing, value proposition development, trial closing, etc., will turn around a prospect who’s not ready, willing, and able to do business with you. And today being a “ready, willing and able” prospect means having a business problem that’s so acute that you are willing to surmount all the obstacles to get it approved and funded.

How does the salesperson deal with this? Understanding the business problem her solution addresses is the first step. Then, finding customers suffering acutely from that problem is paramount. This may mean ignoring or de-emphasizing market segments in favor of casting a very wide net, to get lots and lots of suspects. And then, using Jeff Thull’s terminology, “going for the ‘no’”–meaning very quickly assessing whether they prospect has the business problem, and whether its acute enough to take that person’s time, resources and budget to address it right now. If it’s a no, say “thank you” and move on.

Someday, we may be able again to isolate high-potential prospects through market segmentation. At this moment, I’ll put my money on a ton of leads.

Related posts:
Downturn is costing companies their adventurousness
To close, a purchaser must be ready, willing and able

Selling: the unacknowledged ingredient of innovation

Thursday, May 21st, 2009

You never read about selling in books about innovation. But, for B2B products, the first sales of a new product or service are crucial lifelines. Let’s be clear about this: no matter how cool, fast, inventive, or buzzworthy your product is, if you can’t bring paying customers on board, it’s not worth anything to your business–in fact, it’s a drain.

I’ve blogged about this before, but it’s come to the forefront of my thinking yet again. First, because the word that innovation is the key to thriving in a down economy is everywhere (for example, here here and here). Second, because I work with companies developing new products and offerings–and these days they’re not looking for help in strategy, packaging or marketing.

They’re looking for sales.

Think about some of the obstacles to selling a new product:

- no reference customers
- immature (at best) marketing materials
- no operational/support experience
- no customer negotiating experience
- untested value propositions
- the perception of risk
- oh yeah, that down economy thing

So selling new products is not for the faint of heart. What does it take to move these difficult deals across the finish line?

- A sense for customers. Many business customers cannot or will not be the first on board with a new product. Others are willing to jump on board first (and usually value the perks, such as reduced price or enhanced support) that go along with being a pilot customer. Your salesperson must be able to sniff out these good prospects quickly, and move past the late adopters.

- Creativity. A new product won’t fit perfectly into the prospect’s business. The functionality, delivery terms, the pricing, legal terms will need to be adjusted as you engage customers.

- Learning as you go. The process of probing the market with a new product is a rich learning environment. Your old sales models probably won’t work. Your salesperson must parse customer reactions for insight to improve the product and sales approach. The ability to reflect, while in the heat of the pursuit, and adjust course frequently, is essential.

- Patience. Salespeople won’t be able to explain things using proven words, graphics or models. Demos will miss the mark. Customers will be slow to grasp the unique value of your new offering. The great new-product salesperson keeps on an even keel and focuses on what the offering can deliver to the prospect.

- Persistence. The product will take longer to sell than salespeople think it should. They can’t give up.

- Ability to communicate internally. Salespeople are the first proxy for the marketplace. They will receive intimate, detailed feedback from prospects that your marketing and product groups will need to improve the product for this and future sales. It’s not enough to be great with the customer. When I ran a new-business group, I talked to our salesperson every day, and our entire group met weekly to discuss what prospects were saying about our products, competitors and marketplace.

- Problem-solving. The sale isn’t complete when the contract is signed. Referenceability is the goal. And that means shepherding the customer through the implementation process with minimum agony. This is difficult because the support processes are immature, the product is certain to have defects, and the customer doesn’t know how to use it yet. It doesn’t matter. It’s the salesperson’s job to make sure the customer receives the value expected when the product is put in service.

Not an easy job. Not surprisingly, it comes with a high failure rate.

Think about that the next time you grumble that you’re still paying a commission to someone who brought in that first or second sale of your product. Without her, your business would be quite different, wouldn’t it?

Related post:
Principles of New Product B2B Marketing

Photo by jchatoff via Flickr Creative Commons

E-Book Available on selling through the slump (I contributed)

Thursday, April 30th, 2009

I was honored to contribute to a new e-book, “Selling Through A Slump” (free-registration required). Some of my favorite people (and friends of this blog), such as Dave Stein and Jill Konrath, also contributed.

It’s organized by industry and covers 11 industry groups, including health care (Anneke Seley), insurance (Mike Wise), services (Jill Konrath) and telecom (yours truly).

One of my favorite experiences during this project was polling the best salespeople* I know to get their viewpoints on the question. Their contributions greatly improved the chapter and I thank them very much for sharing their expertise.

*Robert Wiesheu, Brent Harris, Jeff Fraser, Bill Rogers and Ford Harding

Download “Selling Through A Slump” (registration required)

Grounded qualification corollary #1 – don’t companies know why they win or lose?

Thursday, January 15th, 2009


Yesterday’s post spurred some interesting comments, including Dave Stein’s observation that “80% of B2B deals are lost for one of two reasons: inadequate (or no) qualification or inadequate (or no) planning.”

I wanted to elaborate on one point, which is that grounded qualification is built on a deep understanding of why a company won and lost each opportunity, both in the past and going forward.

Which begs a question: “Don’t companies already know why they win or lose?”

This question has two answers: sometimes they don’t know at all, and sometimes they think they know the reasons but are wrong. Let’s take each of these in turn.

We don’t know why we won or lost.
This situation is influenced by many factors in today’s working world. First, there is little time for reflection built into sales professionals’ (or sales managers’) days. Everyone carries long to-do lists, attends too many meetings and is measured to death. (See this post for the implications of this culture on innovation and creative thinking.) There is also a culture of looking ahead: “let’s not rehash the past,” especially if it the outcome was negative.

We think we know why, but we are wrong. This point gets to a cognitive bias called the “actor-observer bias.” According to the Wikipedia definition, this means people “tend to attribute their own behavior to their circumstances (i.e., situation causes), but tend to attribute the behaviors of those [they] observe to their dispositions (i.e., person causes).” In sales campaigns we will attribute a successful outcome to our superior strategies or tactics (rarely luck), and blame failures on ignorant or biased prospects or factors out of our control (product was deficient, price was too high, etc.). We are so satisfied with these rote explanations that we don’t probe deeply into the reasons, nor do we ask the prospects to explain their actions.

If we recognize that (1) we need to reflect on and learn from each deal we pursue, and (2) question our assumptions and dig for the deeper reasons we won or lost, we are on the way to understanding our true position in the marketplace–a tool we can use to be more selective in our pursuits, address our weaknesses, and generate more business at lower sales costs.

Shop Talk Podcast #16 – Robert Wiesheu on Selling in Different Cultures

Tuesday, November 18th, 2008

For this edition of the podcast, I’m delighted to spend some time with my friend Robert Wiesheu, one of the most interesting guys I know and someone who’s spent more than a decade selling to customers in Europe, the Middle East and Africa. As such, he has a great perspective on what it takes to successfully sell even if you don’t look or sound like the people you’re selling to.

Podcast file (18.2 MB, 15min51sec)

Highlights:

1′25″ Challenges in selling into different regions
5′00″ Preparing to sell in a country for the first time
6′10″ Is there bias against a foreign salesperson?
7′25″ What to think about when preparing a product for worldwide sales
9′10″ Working with in-country agents

Theme music: “Up the Coast” from West Indian Girl’s album 4th and Wall.

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How to ask your clients uncomfortable questions

Monday, October 27th, 2008

We know when selling that we need to probe our clients’ needs, ask sensitive questions, or, on occasion, ask for favors. To some people, this comes naturally. The rest of us can rely on this advice from Ford Harding about how to pose some of these tricky questions to clients–questions that can be uncomfortable to ask, but essential to expanding a network and growing a business.

A teaser:

Purpose: To be seated next to possible client at party
Words: I have wanted to get to know [name] for a long time. Would you consider seating us near each other at dinner?

Read Ford’s entire post.

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B2B buyers–please tell the losers why they lost

Friday, October 24th, 2008

I’ve worked on a lot of sales proposals over the years. It works this way: a company needing to buy supplies, services or products invites a number of companies to bid on the business. Frequently, they’ll develop Requests for Proposal laying out all their needs, criteria, etc. Companies submit their proposals, and over several iterations, the buyer selects.

It’s, as succinctly described by Harvard’s John Quelch, a winner-takes-all contest.

Problem is, there are many losers in that contest. Depending on the industry, perhaps only one out of ten proposals results in a sale. It’s a terribly opaque process for the bidders (which opacity benefits the buyer). Not surprisingly, sellers view “the RFP process” as undesirable and frequently unfair.

There are countless systems for increasing your company’s odds of winning proposals. Identifying the power base, deploying flanking strategies, etc. Dave Stein at ES Research can help you sort through who offers these services, if that’s your aim.

I’m interested in something else. How to extract value out of a losing proposal. And it’ll take some behavior changes on the buyer’s side. Ready?

I’ve been working more on the consumer-marketing side recently, and I am amazed by the following: companies really want to know how customers use products and why they buy the way they do, and customers, by and large, are willing to tell them.

On the B2B side, it couldn’t be more different. Losing bidders are frequently afraid to ask or eager to look forward to new opportunities. Buyers don’t want to dwell on the process after it’s done, nor do they want to spend time with a bunch of bidders asking questions or, worse, trying to rescue a losing sale.

It’s got to change, and here are two reasons why: (1) a failed proposal effort is expensive for the seller, and (2) lousy proposals are costly for buyers. The process needs to be mined for all the value possible. Insight is the most valuable mineral in a failed proposal effort. Why did I lose? What did I do wrong? What did I misinterpret? How do you view our product/service against our competitors? What was most important to you? What was less so?

The answers to these questions are the B2B equivalent of consumer market research. It’s not enough to ask those who selected you why they did (though that’s rarely done, either). It’s even worse to make assumptions, but that’s what I’ve experienced, or committed, most. “The product was insufficient.” “They didn’t like our terms.” etc. are only meaningful if they reflect the true thoughts of the client.

So: buyers need to have after-sales reviews with each losing bidder, explaining (without violating confidentiality provisions) why they chose the way they did, and what the bidder could do differently to improve its chances next time.

Losing sellers need to listen with open ears, seek clarification and elaboration, not challenge the decision nor try to reopen the process. (It might be less threatening if disinterested parties attended these sessions, not the lead salesperson.)

Putting this simple protocol in place will help buyers make better decisions, and sellers create better products, services, and proposals.

Please weigh in with your thoughts. Email me (john at caddellinsightgroup dot com) or twitter me (@jmcaddell) if you’d like to discuss this idea more.

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