Sales Rep Lame Excuse #83

“They just made an unbelievably poor decision.”

Did you ever watch a customer or prospect make a bad decision?  OK, dumb question…  We’ve all lost deals because the guy on the other side of the desk just flat didn’t do a good job of making the decision.  And because we hold the customer’s best interests near and dear to our hearts, it hurts to watch them do the “wrong” thing and buy from a competitor.  But the sales rep certainly can’t be blamed for that, right?  Wrong!

When a customer makes a bad decision, the blame falls squarely on the sales rep’s head.

It’s a fundamental part of the rep’s job to know and understand each customer’s buying process – or “Buyer’s Journey” – or whatever you want to call it…  Knowing that process consists of getting clear answers to three questions:

  • How will you go about making this decision?
  • What are the decision criteria?
  • Why are those the decision criteria?

How will you go about making this decision? Typically, multiple people are involved to varying degrees.  Each will want certain facts about the proposed product or service and the value that will ultimately be delivered.  Each will consider those facts and provide individual recommendations to the final decision maker who will weigh the importance of each recommender and render the verdict.  All kinds of actions and details may be involved; demonstrations, reference checks, financial analyses, etc., and an above average rep will know about them all and have them written down, probably accompanied by a flowchart.

If the customer can’t provide this information to you, they’re hurtling toward a bad decision.

What are the decision criteria? It’s got to have an ROI above 30%.  It’s got to be completed by July 10.  The lead time must be less than 24 hours.  It cannot consume more than 2 hours per week of Mary’s time.  These are but a few examples of many possible decision criteria.  A customer might have just one.  A different customer might have 20.  The common theme is that each criterion is stated in concrete, quantified terms.

If the customer can’t provide this information to you, they’re hurtling toward a bad decision.

Why are those the decision criteria? Actually, the above average rep will know specifically why each and every criterion is on the list.  The above average rep also knows the only valid reason for a criterion to exist is that it ties the decision to achievement of a specific organizational objective.  It’s got to have an ROI above 30% because the Board of Directors has set 30% as the minimum hurdle rate.  It’s got to be completed by July 10 because we need to deliver X to our customer by August 10 and we need 30 days cushion to do a quality check to ensure that we maintain our “delivered on time & working every time” corporate objective.  NOTE:  These chains of connections back to specific objectives can get quite complex.  Mom, never said it would be easy, and…

If the customer can’t provide this information to you, they’re hurtling toward a bad decision.

You can blow off getting answers to the three questions because it’s too hard or takes too much time or requires you to think like a customer (as opposed to focusing on your own and your employer’s wants and needs. )  I wonder, though, if all your competitors think that way?  And wouldn’t helping customers improve their decision processes really set you apart?

Ogilvy & Mather, IBM and Salesforce.com should be ashamed of themselves

I don’t need my cup of extra-strong coffee to get going this morning.  If you’re in sales, you won’t either.

Just read about this Ogilvy & Mather-led contest that insults the intelligence of sales professionals, managers and executives everywhere.  Selling a red brick to a panel of “executives” from Ogilvy & Mather, OgilvyOne, IBM and Salesforce.com is proof of sales skills???  I think not.

For the contestants, it’s a demonstration of cutesy manipulative skills.  For the panel, it’s a public declaration of being clueless about how to succeed in sales.

The fundamental goal of sales is to help a customer make and/or save money.  The process begins with identifying & clearly defining a customer problem and/or objective, and ends with the successful, ROI-producing implementation of a new customer process.  It does not start with the product. Hello!!!  Is this news?  Could you possibly caricature a noble profession in a more demeaning fashion?

Why yes you can.  And you did!  You tell me your goal is “recreating the noble art of ka-ching.”  I’m not kidding.  That’s a quote from the vice chairman for the British operations of Ogilvy & Mather.  It’s all about me, me, me?  As long as I get my commission check, all’s right with the world?  Delivering value to the customer has no place in your dopey contest?

Shame on you, Ogilvy & Mather, IBM and Salesforce.com!

I for one intend to contact all three firms to complain about being publicly insulted.  I think you should click on the links above and do the same.

“Funnel” or “Incubator?”

Friendly violent debates are really a lot of fun.  They’re also the best way to practice selling complex ideas.  Fortunately for me, there are lots of folks ready, willing and able to have no-holds-barred, free-for-all arguments about my allegedly brilliant ideas.  One of my favorites involves the traditional “sales funnel” metaphor.

I still hold it near and dear.  For me, it’s the bedrock upon which sales process improvement is built. A trusted colleague thinks I’m missing the boat and that an “incubator” metaphor is more appropriate.   His contention is that sales is non-linear, and needs to be able to deal with whatever new circumstances come along.

In my view, he’s right about the non-linear nature of establishing and nurturing business relationships with individuals.  He’s dead wrong, though, when it comes to managing opportunities.  My job as a sales rep is to help my customers solve problems and exploit opportunities.  No touchy-feely nurturing stuff here.  This is bare-knuckle business.  Crush that problem.  Exploit that market situation.  (Yeah, exploit, not just take advantage of!)  Be disciplined, methodical and relentless about it.   To do either of those things, I need to thoroughly understand and, using a defined sales process, work through four sets of information:

  • The existing circumstances – Who, what, when, where why and how?  What – precisely what – is the “Before” picture?
  • The desired circumstances – Who, what, when, where why and how?  What – precisely what – is the “After” picture?
  • The transition – How do I help my customer progress from “Before” to “After?”
  • The “So what?” – What does “Before” cost?  What does “After” cost?  What does the transition cost?  What is the ROI, Break-Even Point and discounted cash flow associated with my recommendation?

I just described a process; a funnel management process.  Nothing non-linear about it.  Sure I need to do all that non-linear relationship and credibility building stuff, but when it comes to identifying an opportunity and selling something related to it, I’ll take the good old funnel mentality every time.

What do you think?

Watch the video!

Unintended Consequences

We’re all familiar with the “Law of Unintended Consequences.”  My personal favorite is still the plastic whistles that were packaged with Cap’n Crunch cereal back in the ’70s.  Blowing the whistle into your phone triggered a connection to AT&T’s long distance dialing AND by-passed their billing system.   Free calls!  Not exactly what Quaker Oats had in mind.  (…and Ma Bell was not pleased.)

Turns out the “law” applies to Sales Process Engineering initiatives also.  A long-time client gave us a challenge.  Reduce their sell cycle by 10 days over a 6 month period.  Off we went, and 6 months later had to report that we had taken the average sell cycle up to 78 days from 67 days.  Uh-oh…  16% in the wrong direction.

That’s when we started scrambling for other metrics in an attempt to salvage our credibility.  One was the win rate.  Up to 58% from 52%.  OK, takes longer, but we win more.  Another was  total number of opportunities in the active funnel.  Up to 515 from 394.  Better yet, the dollar value of those opportunities went up by 1/3.  Then we discovered the pot of gold.

Days to lose an opportunity went down to 75 days from 180 days.  That’s a 140% improvement.  Turns out our intense focus on qualifying was flushing the “trash” opportunities out of the funnel much more quickly.  The math’s a bit convoluted, but for this client, that lose cycle reduction translated into an additional 17 selling days per rep per year.  I love what my client said.  “You mean we now have 13 months a year to sell our stuff?  And our poor, dumb competitors are still stuck with only 12?”  Smooth, articulate me said, “Yep.”

So remember, unintended consequences will happen.  Be prepared for them.  More importantly, work hard at achieving significant improvement for one measurement of your sales process for a specific time frame.  Even if you lose, you still win.

Synchronize Your Sales Process With the Customer’s Decision Process

Timing is everything!

Editors tell authors to never ever start a blog post with a cliché. Despite appearances, I always follow that advice, and here’s why the above – when applied to selling – is most definitely not a violation of that writer’s rule. Competition is intense. Depending on luck to win is therefore foolhardy. It doesn’t matter how fervently you hope your timing is right. As a sales rep, you must make your timing right.

To ensure that the clock is in your favor, synchronization of your sales process with the customer’s decision process is essential. To illustrate the point, we’ll first briefly define the two processes and then graph them to deliver some insights.

All sales pros are familiar with the funnel or pipeline concept. Although your definition of stages may be slightly different, what follows is good generalized model:

  • Identify Opportunities – Figure out who might, maybe someday buy something from me.
  • Gain Attention – Schedule a face-to-face appointment with the decision maker.
  • Establish Interest – Get the decision maker’s commitment to deploy time and resources to investigate and evaluate my offerings.
  • Conduct Discovery – Find out everything I need to know about the prospect’s business to write a compelling proposal.
  • Present/Propose – Write a compelling proposal and if possible, formally present it.
  • Close – No definition necessary…

Surprisingly few in sales have spent a lot of time thinking about the customer decision process. (Isn’t it a bit embarrassing for so many of us to have ignored something so obviously important?) Here’s a bit more detailed outline of a good generalized decision model:

  • Develop Strategic Plan – Based on the organization’s vision and mission, top executives examine their strengths, weaknesses, opportunities and threats. They then lay out strategies for each of their major functional areas along with an organizational structure and means to measure and control operations.
  • Design, Implement and Execute Business Processes – In great detail, functional and operational managers determine exactly how each and every employee, tool and asset will be deployed to efficiently execute strategy and achieve desired results. In addition, they develop and track performance against budgets which ultimately get rolled up into Income Statements and Balance Sheets.
  • Respond to Problems – Murphy’s Law is still in force. Quality of strategy, plan and tactics notwithstanding, stuff happens. It must all be addressed …NOW!
  • Define Needs – Operational level managers figure out what they need to carry out the “C-level” plans, execute the VP-level business process designs and react to everything that Murphy throws at them; keeping everything within budget.
  • Identify Alternatives – Those same managers apply their personal knowledge skills and contacts and that of their subordinates to research what is available to help them fulfill all those needs.
  • Evaluate Alternatives – Everybody (at least it usually seems like everybody…) gets involved in tweaking, asking, changing, criticizing, measuring, judging and gagging at the price of all aspects of all alternatives.
  • Decide – No definition necessary…

With the basic definitions in place, let’s take a look at how all the pieces interact. Note how the vertical axis in the diagram below shows the sales process from bottom to top and the horizontal axis shows the decision process from left to right.

Assume that a sales rep is currently in the “Identify” sales stage for a given opportunity at a given account.  If the customer is at the “Plan” or “Execute” decision stage, the rep’s timing is great, and thus those two squares are green.  If the rep is at “Identify” and the customer is at “Decide,” the rep is very, very late to the game and has little or no chance to win.  That square is red.  He has a chance (i.e., a yellow square) if the customer is still figuring out exactly what is needed, but he better get cracking!  If the customer defines needs without the rep’s involvement, the rep is stuck with being in react mode and is headed toward a price war.

Along the top row of the diagram, the rep who is trying to close a deal while the customer is still defining needs will be at best be viewed as too pushy and at worst really annoying.  It would be much better to start closing while my customer is still looking around for alternatives.  That means I’m out ahead of my straggling competitors and have already had the opportunity to frame the decision criteria in my favor.

Take the time to think through the situation for every one of the boxes in the diagram.  Then think through each of your current opportunities.  How good is your timing?  What actions do you need to take to get back in sync with your customer?

In particular, think through the implications of finding yourself in the single most commonly occupied spot – right on the border of “Attention/Interest” while the customer is at “Evaluate Alternatives.”  Sales managers see this over and over.  The customer has already figured out what is needed and is already familiar with multiple sources of supply and is now evaluating alternatives.  Out go the phone calls to the suppliers.  In come the reps trying to establish the customer’s interest in helping them gather facts and study the situation.

Well, the customer has already completed Discovery and already “knows” what you should propose.  The customer wants a proposal now.  And the customer wants your best and final price, NOW.

As shown in the diagram below, the customer has forced you to skip over several critical steps of your sales process.  The customer has made one of your green squares red.  You are hopelessly caught in react mode.  You can either compete on price or walk away from the deal.

The diagram provides a visual aid to make it abundantly clear that a rep must get engaged much earlier in the decision process in order to stay inside the green, proactive zone.  More specifically, if the customer has a crisp answer to the question, “What do you need?”, the customer is into identifying and more likely evaluating alternatives, and you had better be delivering your proposal; which means your Discovery is finished and you have long since gained a thorough understanding of their strategic plans, business processes and problems.

Based on research conducted by The YPS Group, most industrial sales reps live in the red and yellow zones at the bottom and right of the diagram.  The key indicator of this is the percentage of potential deals where price is one of, if not the key decision criteria.   At the risk of becoming repetitious, if you are constantly getting beaten up on price, you are entering the game too late in the decision cycle.  Customers are forcing you to omit the phases of your sales process that enable you to shine; to clearly demonstrate your “value-add.”

So what are the eagles doing?

Perhaps not surprisingly, the best performing sales reps (i.e., those closing the biggest deals with high margins and total territory sales exceeding $3 million) spend the bulk of their time in the “super green” zone at the center-left of the diagram.  Their focus is on cross-departmental communication regarding the thought behind, the nuances and the implications of the customer’s strategic plan, business processes and problems. Let that thought sink in for a minute or two…

The eagle reps are providing a service that is extremely valuable to the top customer executives.  It is a service that has literally and absolutely nothing to do with the products and services provided by that eagle rep’s company.  It’s all about cross-departmental communication within that customer.

Re-read the definition of the “Develop Strategic Plan” stage of the decision process.  How many of a customer’s employees spend a lot of time thinking about those issues and how they can, do and should affect day-to-day activity?  Not very many, if any.

Re-read the definition of the “Design, Implement and Execute Business Processes” stage of the decision process.  How many of a customer’s employees spend a lot of time thinking about those issues and how they can, do and should affect day-to-day activity?  Not very many, if any.

Further, how many folks in one department thoroughly understand how their actions affect folks in other departments?  (As an example, think about how a “simple” change in a manufacturing process could wreak havoc in maintenance.)  Not very many, if any.

Ditto the above for the “Problem” stage.

Customer executives know that internal and inter-departmental communication is crucial.  Look at all the executive management books written on the subject!  But do they really have the time to communicate well?  Do financial or production or procurement executives have anywhere near the communication skills of a polished sales professional?  Isn’t it obvious who could be really effective leading the charge for better internal communication?

Back to the diagram to reinforce the point…

Eagle reps understand customer strategic plans, processes and problems so thoroughly, and communicate them so well, that they enable customers to leap-frog over significant pieces of their decision process.  Eagle reps use their knowledge about customers to define their problems, what they cost, their root cause and how to address them before they even realize they have a problem.

How could a top executive not be impressed with a sales rep who consistently proposes money saving and money making solutions to problems nobody even knew existed?  Why bother with identifying and evaluating alternatives?  The eagle makes those steps superfluous.

Not that it’s easy…

Don’t get me wrong.  I’m not suggesting that implementing any of this will be easy.  The effort it takes to get to the “super green” zone for even one account is significant.  It’s also a different kind of effort that requires broad, general management knowledge.

On the other hand, differentiating your products is getting harder and harder every day.  Maybe it does make sense to focus more selling time on those early stages of the customer decision process.