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Think About It… the e-book version » Differentiation

Archive for the ‘Differentiation’ Category.

I Was Wrong About Proposals

For years, I’ve ranted at sales reps and managers about how utterly dumb it is to “submit a quote” to a customer.  A traditional quote does nothing more than list items for sale, prices, totals, discounts and net price.  It provides no differentiation whatever and reinforces the fact that you have nothing more to offer than a catalogue-full of commodities at really, really good (i.e., low) prices.

“Submit proposals!” was my sage advice.  “Make sure the opening sentence or three clearly states the value to the customer.  If you have any real sales talent, you’ll also put that value in terms of dollars and cents.  You’ll paint a ‘Before’ picture, a picture of the ‘Transition’ to your vision and an ‘After’ picture; all of which make the brilliance and value of your proposal intuitively obvious to the most casual observer.

If you and I have ever worked together directly, chances are you’ve heard me state the above with emphasis, enthusiasm and arms a-wavin’ in your face. 
I was wrong.

This past Friday, after an intense, long customer meeting, two colleagues and I decided we had earned a few beers.  In the course of conversation one of them mentioned that he’d like to make a video of me and the other debating the value of proposals.  That was the beginning of yet another epiphany.

I was asked to consider the definition of the word “propose” which means “to submit for consideration.”  Is that really what I want to do?  To passively, more or less hat in hand, pass along an entreaty hoping the all powerful decision influencers and makers will take a few minutes out their busy days to possibly, maybe take a look at my suggestions?  AGGGHHHHH!!!  That’s not at all what I want.

What I really want is “Recommendation Summary” (or “Statement Of Work”) that reflects the research, evaluation and creativity of a relevant, trusted group of customer personnel.  (NOTE:  I just happen to be a member of that group.)

Put yourself in the shoes of the final decision maker and consider how you’d perceive each of the three documents:

  • Quote – How did this make it to desk?  I don’t get into this level of detail & don’t know or care what it means.
  • Proposal – Wow!  These vendors sure dump a load of effort into these things.  And come to think of it, I really liked these guys.  This proposal might make sense, but I don’t have time to read all this right now.  I’ll put it in my active To-Do file and get around to it just as soon as I can.  But first I need to do this, and then that, and there goes that darned phone again…
  • Recommendation Summary – Ah-ha!  My team finally got this finished.  Just in time for the board meeting.  Let me flip to the action plan at the end…  Yep, that’s exactly what I thought from the beginning.  We need to get going on this ASAP.

It’s clear by now that the distinction entails a whole lot more than semantics.  A quote can be submitted by a total stranger.  You can’t be part of a Recommendation Summary until you’ve earned the right to be considered an insider; until your opinion carries enough weight to be sought out and respected by the powers that be.

So focus on moving up the food chain!  If you’re submitting quotes, you’re either a rookie or not very good.  If you’re submitting proposals, you’re a journeyman.  If you’re contributing to (even better, leading) development of Recommendation Summaries, you’re finally doing your real job as a sales rep.

Thanks to Stone Payton and Todd Schnick for the insight.  Also see:

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Four facts all sales reps should always keep in mind

by Todd Youngblood

We are all conditioned to always remembering that the customer is always right. That’s a good thing in general, but do we take it too far?

Like most bits of wisdom that stand the test of time, “the customer is always right” applies most of the time. Most – not all – of the time. That mind set can easily blind us to four critical facts.

1) Customer personnel do not have the time and/or wherewithal to address all of their known significant problems and opportunities.

Have you ever heard of a decision-maker that complained about having too much time at his or her disposal? That there just wasn’t enough to do to fill the hours of the working day? You almost certainly have heard something along the lines of, “my people have the best knowledge and skills in the business,” though. Even if that’s true, which I doubt, it is virtually impossible for anybody to keep up with the incredibly fast advances of the modern business world. My point is, every customer always needs every bit of time savings and/or knowledge you, your company, your products and your services can provide.

2) Customers have unknown problems and opportunities.

I don’t care how smart they are, all customers are oblivious to something. And they know it too. Anyone who truly believes their area of responsibility is totally under control and immune to circumstances lurking in the background or just around the corner, is either the most arrogant human in history or insane. My point is, every customer always needs every bit of relevant insight and perspective you, your company, your products and your services can provide.

3) Customer decision processes are not robust enough to deal with the complexity of their problems and opportunities.

The best business process in the world continuously becomes less able to deal with the changes thrown at it. Every day, it becomes just a bit more obsolete. That’s the best business process in the world. How many customers can even tell you what their decision process is? How many businesses have ever even thought through what their decision process should be? My point is, every customer always needs your spin on what to consider when evaluating the types of products and services you provide.

4) Few individuals consider their entire business when making a decision.

The functional “silo” has become a cliché for reason. It’s true! Most people don’t know about, much less care about or consider, people and processes outside of their direct responsibility. (Can you believe there’s an actual purchasing agent I know of who cares only about price? Who refuses to consider quality, durability, warranty, integration, service or support? I know, shocking!) The CEO, however, does consider and worries endlessly about how all the pieces of his or her organization integrate with one another as well as with pieces of supplier and customer organizations. You don’t get to be a CEO unless you’re really, really good at perceiving, understanding and managing all those connections over long time horizons. My point is, every customer always needs your ability and insight into how your products and services integrate with and help harmonize those connections. In fact, the better you get at “orchestrating” business processes, the more time you’ll be “forced” to spend meeting with top customer executives.

Notice how these four facts have little to do with your products and services. They have little to do with traditional sales skills. They have far more to do with your knowledge and skill as a creative business executive. Success in selling depends upon your prospects’ realization of how you can save them time; provide some of the knowledge and skills required to solve their problems and address their opportunities; point out the hidden problems and opportunities; constantly improve their decision process; and help them think big, broadly and long term. The customer is not always right. They know it. And they will embrace the sales rep who helps them get better with these four aspects of running a business.

Think about it…

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What’s the best way to make your verbal statements more compelling?

by Todd Youngblood

It’s January. It’s time to make (and stick to) another one of those “I know it makes sense and it’s good for me and I really need to make time for it” resolutions.

Have you ever had what seemed like a great idea pop into your head while taking a shower or driving into the office or doing “whatever” when you’re alone? Have you ever excitedly shared that insight with the first colleague, customer or co-worker you came across? Have you ever gotten that “I don’t know how you could possibly think this makes any sense” look?

For all of us, the answers are yes, yes and yes. It’s the third “yes” that’s humbling. But does the third “yes” mean it was a dumb idea? Not necessarily. In fact, probably not. More likely the key concepts were not well stated and/or some important facts were left out and/or extraneous information was included.

Next time this happens to you, drop everything and invest 15 minutes in writing it down.

Think and write in terms of who, what, when, where, why and how. Who will perceive value in this idea? In one sentence, what exactly is the essence of this idea? When will it be relevant? Where will it be relevant? Why will it be valuable? How will it deliver value?

Getting through that much will clarify your thinking and strengthen your ability to articulate the idea to an extent that will at least surprise, and maybe even amaze you. I’d also suggest that you take it one step further and develop a bulleted list. Jot down the 3 to 5 key points – in a logical sequence – that best illustrate the power and value of your thinking.

Around 10% or so of your ideas will deserve even more of the “writing treatment.” These elite, really good ones deserve to be laid out in prose. Think in terms of writing a compelling e-mail, blog post or online comment (…and then, of course, send the e-mail, make the blog posting or enter the comment.)

For anything that’s “going public,” apply the three golden rules of writing:

  • Revise and rewrite
  • Revise and rewrite
  • Revise and rewrite

A few other tips I find helpful include:

  • Omit needless words
  • Use everyday words, short sentences and personal pronouns
  • Always spell check (duh…)
  • Write the way you speak
  • Read – LOTS – and critique (Learn from the styles, strengths and mistakes of others.)

Writing things down improves your ability to think. It clarifies. It condenses. It reinforces your message. It spreads your message farther and wider. It enables others to articulate your message. It makes your verbal statements more compelling.

Albert Einstein was a pretty smart guy. He said, “If you can’t write it simply, you don’t understand it well enough.” I agree.

Think about it…

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Another Spin on Value Propositions

by Todd Youngblood

Quite often the inspiration for a great sales idea comes from a source way outside our industry or normal frame of reference. What follows is a story about a really creative value proposition. How can you use its message for your own business?

Rep after rep after rep tells me it’s much easier for other reps to articulate a compelling value proposition. That “my business is incredibly competitive.” That differentiation – standing out from the crowd – is “much more difficult for me than for just about anyone else.” OK, crafting a powerful value proposition is a challenge, but you think you have it rough?

Picture yourself as the lead sales rep for a charitable organization whose mission is to help the poor in the developing world. This is just about the toughest competitive landscape I can imagine. There are literally thousands of other groups asking for contributions to virtually identical causes. Many have been around for years and years. They all have bigger budgets, better visibility, etc., etc., etc. There’s no way to come up with a unique approach that hasn’t been tried before, right?

Well, sure there’s a way. You’d probably start by thinking about your audience’s perspective and core values. They already have a favorite charity or two, and that’s where they contribute their hard-earned money. They want to be sure that their gift goes as directly as possible to someone who could really use the help; to someone that will use the donation appropriately; to someone who will apply the help as a stepping stone to self-sufficiency; to someone they can identify with at some level.

You’d build your value proposition around those ideas. An “average” rep would say something like “Our organization is a leader in putting your hard-earned contribution to the best use possible.” Ho-hum… We’ve all heard that lame, empty “leader” claim before. You would package the thoughts something like, “Lend your hard-earned cash to specific entrepreneurs and empower them to lift themselves out of poverty.”

Now that’s a novel way to get people thinking about where to place donations. It’s not a handout to some anonymous someone. It’s “lend,” not “give.” It sounds more like a partnership arrangement than charity. It’s “specific entrepreneurs” who with a bit of help from me will “lift themselves.” I don’t know about you, but it reminded me of the help I got early in my career. Made me wonder if there really was a way to “help the poor in the developing world” in a manner similar to how I myself was helped. It prompted me to follow the link to Kiva (external link) to learn more. (…and for what it’s worth, I’m now partnering with a whole new group of entrepreneurs I met there.)

A trio of closing thoughts this month…

  • Always be on the hunt for examples of value propositions. You’ll find great ones in unexpected places that you can adapt and use.
  • Value propositions that focus on the customer’s core values work better (i.e., not just benefits, but the underlying reasons why those benefits are perceived as valuable)
  • Truly excellent value propositions keep the customer coming back for more. I find myself drawn back to Kiva (external link) at least once a month to see how my new partners are doing.

Think about it…

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Think and act like business manager

by Todd Youngblood

The traditional role of sales rep as provider of information is obsolete. That role got outsourced to Google because it’s a lot faster and easier that way.

If customers can find the information they want using a Google search, why would they ever contact a sales rep? If it’s accessible via Google, they don’t need you. In fact, if it’s accessible via Google or from your website or from a competitor’s website, they don’t want you. They’ll correctly assume that all you’ll do is burn more of their time, and there’s not enough of that to go around as it is.

Here’s a novel thought… put yourself in your customer’s shoes. In other words, think and act like a business manager and consider some common themes that appear among every business manager’s performance objectives:

  • Get more done
  • Consume fewer resources (people, equipment, time, money, etc.)
  • Increase quality
  • Improve the bottom line (save money, make money or both)

Given these common themes, we as sales professionals should package our personal value to match. Here’s an outline for the sales job that can help make that happen:

  • Research - Get good at finding what’s hard to find. Concentrate on understanding what the customer needs to know to solve their toughest problems, and then invest the time and effort with the search engines, in-depth industry publications, blogs, etc. to get the answers before the customer does. It really doesn’t matter if your products and services are or are not directly involved. In time, your ability to dig out answers to the tough questions will enhance your value, and you’ll get the orders.
  • Organize/Package – Since your research deals with complex issues and questions, your answers will also tend to be complex. Practice and get good at packaging your research such that it’s simple, concise and easy to understand. (The Elements of Style, Fourth Edition is an excellent starting point to improve your skills in this area.)
  • Orchestrate/Coordinate – Even after all your research and packaging, information is still useless until successfully applied. Get good at developing comprehensive implementation plans. Don’t force your customer to burn his or her time figuring out how to successfully apply the intelligence you provide.
  • Build a Business Case – Clearly document how the customer will save and/or make money, and how much money the customer will save and/or make. Whatever their SIC code, they’re all in the money-making business. Show ‘em the money.

If the above four items don’t look like they belong among a set of traditional sales rep objectives, that’s because they don’t. Many traditional sales professionals couldn’t or wouldn’t do that kind of work. It is the kind of work, however, that your customers expect you to do …and it’s what your competitors are doing.

Think about it…

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Any dolt can solve an easy problem

by Todd Youngblood

Sales reps tend to take great pride in the fact that they are problem-solvers. The ability to package and deliver a set of products and services to address customer issues is, in fact, a critical sales skill. The trouble sets in when you take a look at what kinds of problems you’re solving.

Everybody knows that solving the customer’s problem is the key to making the sale. That’s most certainly true. Remember though, that huge advances in technology, communications and knowledge management have made many types of problem-solving a whole lot easier. Issues that used to occupy a senior, highly paid engineer are now handled by a rookie armed with an internet connection and the ability to access information on a global scale.

Business people delegate. They get paid to delegate. They earn promotions and bonuses based on how much work they can get accomplished using fewer, less expensive resources. It follows then, that if a rep is addressing the same kinds of problems as five years ago, there’s big trouble brewing. That rep will be working more and more with people that are lower and lower in the customer hierarchy. The perceived value of what that rep is delivering will drift downward as well.

To prevent this from happening, it is essential to constantly monitor the kinds of problems you’re solving, who the customer owners of those problems are and that you’re talking to the right person about the right problem. The diagram above is good tool to guide this thought process.

A rep discussing pricing is a rep dealing with a shopping issue, probably with a low-level purchasing agent. A rep discussing features and benefits is helping a fairly low level professional evaluate the relative pluses and minuses of alternative solutions. Defining requirements for those solutions is a tougher job usually handled by a more senior professional. First and second line managers are primarily concerned with identifying, defining and prioritizing problems, that is constraints to getting the job done. Functional level executives are occupied with designing, executing, monitoring and modifying the business processes required to successfully implement the strategies developed by senior executives. At the top of the pile are business owners, represented by the board, responsible for setting the overall goals and objectives of the organization.

Keep three things in mind while using this tool:

  • Move up the food chain – Keep track of how much time is spent dealing with each of the 7 levels. Compare and contrast this data for all reps in the organization.
  • Focus on building strategy and business process management skills – How much sales training time is spent on developing product knowledge vs. invested in expanding business knowledge?
  • Match topic with level – Getting a meeting with a senior exec and then discussing features and benefits will eliminate any chance of getting another meeting. He or she won’t be the least bit interested. Discussing business process issues with a purchasing agent will at best be a waste of time

Are you qualified and knowledgeable enough to discuss business strategy with a senior executive and earn that executive’s respect? Are you qualified and knowledgeable enough to intelligently discuss process improvement, six sigma, lean concepts and the statistical tools necessary to effectively apply them? Are you qualified and knowledgeable enough to anticipate and define customer constraints before the customer does? Or do you spend your day discussing features, benefits, pricing and delivery?

Think about it…

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Try swimming in a blue ocean

by Todd Youngblood

Now and then a great idea re-emerges in new context and gets us thinking again. Blue Ocean Strategy by Kim & Mauborgne has one of those notions.

When I was eight, my little league baseball coach gave me a bit of advice. As a batter, I was making contact with the ball, but was still having trouble getting on base. Coach noticed my frustration, reminded me to keep my swing level and made what struck me at the time as a profound statement… “Hit it where they ain’t.”

Not that it’s easy, but it is possible to hit a baseball to a particular spot where nobody in the field can easily catch it. It is possible to learn techniques for doing so. It is possible to practice that skill. It is possible to get better at it and to become successful using it. Even with running speed more like molasses than greased lightning, I started getting on base more often, scoring more often and having more fun.

Interestingly though, very, very few of the other kids bothered with the “hit it where they ain’t” strategy. They had lots of reasons; too different, too hard, too boring, not the way baseball was supposed to be played, nobody around to teach them how to do it, etc.

Now a few years (…OK, a few decades) later, I came across the same advice in a totally different context and realize that old coach Siwak was really onto something. The fundamental premise of Blue Ocean Strategy is to get really good at something your competitors don’t even think about, and then use it to radically set yourself apart from them.

For example, in the wholesale distribution industry, price, delivery, features, service, product/application knowledge and reputation are the traditional, most often cited sources of differentiation. Sales reps in the industry focus on articulating how they are better providers of these types of value.

The graph shows the amount of value delivered for each of the key competitive factors. Note that the white “Industry” line as well as the blue line for the “ABC Company” track closely at the 80% level. In other words, ABC is swimming in a “red ocean” where all competitors are focused on delivering the same types of value. The bad news is that the quality & value of ABC is virtually indistinguishable from anybody else.

What if ABC took a “hit it where they ain’t” approach? What if they dramatically de-emphasized competition on price and delivery and re-invested the effort saved in improving customer business processes and financial performance? Now ABC can get away from the blood in the water and distinguish itself in a unique way. They could be all alone in talking about and delivering value on whole new dimensions. Like the other little leaguers, ABC’s competitors are likely to ignore the strategy for all the same reasons.

Not that getting good at finding new ways of delivering value is any easier than getting good at hitting a baseball where they ain’t… Implementing Blue Ocean Strategy will take work – real work and lots of it. Doesn’t it make sense though, to read and learn some more about this approach? It might be the difference maker between an industry average year and a break-out, banner year. Get a copy. Then…

Think about it…

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They don’t care about you. They don’t care about your products. They don’t care about your company.

by Todd Youngblood

Customers are a demanding bunch. They have to be because of the intensity of the competition they face and the fact that their customers are just as demanding. It puts a sales pro who genuinely cares about the customer in an odd situation because…

They only care about your ability to repeatedly generate pull on streams of value that facilitate achievement of their objectives. There are a lot of moving parts in that last sentence, so a closer look at the key words and phrases is in order.

  • Repeatedly – A one-shot deal is just that. It may not have been a simple matter of luck or good timing, but it looks that way to the customer. No matter how valuable that one shot was, the customer is far too busy for relationship-building with you unless you can quickly do it again. (and again, and again…) You’ve got to constantly rapidly and continuously discover, learn, create, develop, solve, advance and deliver.
  • Generate Pull - Pushing your products and services is an obsolete strategy. Oh sure, it still works. The vast majority of sales reps still use it, but make no mistake, it is obsolete. Technology has enabled customers to quickly locate and “pull” whatever they want, whenever they want it into their organizations, at a great price. You need to be able to deliver whatever “it” is and right now. That means you must get really good at anticipating requirements; which means you must know what they want before they know what they want and where they’ll look first to find it and be there when they do finally look; which means you must know their business and where it is and/or should be heading; which means you need to know the same about their customers… Sound difficult? Complicated? Different? It most certainly is. Better get started on discovering and inventing the best practices of this brave new world of “pull” selling right now!
  • Streams of Value - Think about the chain, not the links. Lets say your widget is a key link in your customer’s value chain. That’s why they have been buying widgets from you for twenty years. Lets also say that I sell a widget with similar specs. Not only that, I can provide the link that comes before the widget link and the link that comes after. I have partners that provide links 3, 4, 5… both up & down the value chain (i.e., the “value stream”) and will integrate all of them for you. Does my stream of value address and solve a much broader, deeper range of issues than your widget standing there all by itself? And then there’s our mutual competitor X. X is thinking in terms not only of the widget stream of value, but also of the related A stream of value and the B stream and C stream… and how all those streams connect to pull value streams into the customer’s customers.

No doubt about it, the world we’re selling into is getting vastly more complex at a faster rate than ever. You can remain a one-shot wonder; and get shut out by customers too busy building relationships with your rapid-fire competitors. You can keep pushing yourself into accounts and once there push your products and services into them; and really, really annoy the decision makers who genuinely can get whatever they want, whenever they want it. You can practice all day long and get quite good at articulating your “value add” only to find customers far more concerned with integrating a wide array of value streams and perceiving your pitch as painfully narrow-minded or even boring.

Think, think, think. Learn, learn, learn. Figure out how to repeatedly generate pull on streams of value that facilitate achievement of your customers’ objectives.

Think about it…

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Value add is dead

by Todd Youngblood

If ever there was a concept so over-used, over-hyped and worn-out to the point of uselessness, it’s the whole notion of value-add. At one time, pouring more value into your product or service and getting really good at articulating that value add was an advanced selling strategy. Are you still stuck in that obsolete rut?

Today – actually, no – it was long before today… Ten years ago, it was nearly impossible to find a sales rep who didn’t crow about the wonderful value add that his or her firm was capable of bringing to the table. “Not only are our widgets brighter, shinier and longer-lasting, we deliver them just-in-in-time, support them with the best customer service in the land, wash & wax them twice a year, etc., etc., etc.”

Take a close look at how your sales team articulates your differentiation. (Or should I say, alleged differentiation?) How different is your value add from the competition’s value add? From a customer perspective, do any of the sales pitches really sound any different?

You can kid yourself all you want, but all products and all services are moving rapidly toward commodity status all the time. Communications and knowledge-sharing have become so amazingly efficient, that sustaining an edge by injecting more and more value add has become a going-out-of-business strategy. You can stay on the value adding path and survive, but only if all your competitors are slow and lazy.

Shift gears for a second and think about rule number one in selling; Show the customer what’s in it for him. With a value add approach, I’m focused on explaining how I add value to my product, my set of services – it’s all about me and my so-called unique value add. I’m intent on explaining how my approach is better, cheaper, faster. I’m violating rule number one! Aghhhhhhhh!

As in any competitive endeavor, continued winning means continuously taking it up another notch. One way to do so is “Process-Linkage-Finance” selling.

The key to this approach is a relentless focus on adding value to the customer’s business processes. Your products and services are secondary at best. The sales rep needs to know and understand their customer’s overall business process, all the sub-processes, the sub-sub processes …all the way down to specific activities. Armed with that knowledge, the rep can clearly identify opportunities, problems and bottlenecks and articulate how to change things for the better. (Oh by the way, not that it’s all that important to the customer, but the rep can also facilitate procurement of the products and services needed to implement those changes.)

Studying and understanding linkages among customer business processes adds another layer of selling power. For example, changing an aspect of the manufacturing process will almost certainly have an effect on the maintenance process; changing the receiving process will have an effect on the inventory management process. There are dozens of significant linkages even within small organizations. There are many, many more inter-organizational linkages. A supplier’s sales with my purchasing, a customer’s purchasing with my sales, my service with a customer’s operations. Each and every one of these linkages provides the sales rep with yet another opportunity to enhance the value of the customer’s business processes.

Then there’s finance. This is and will become an ever more important selling skill. Follow the money! Reps need to understand how each customer department head prepares his or her budget; how those budgets get rolled up into pro-forma Income Statements and Balance Sheets; how performance is tracked over time using actual, after-the-fact Income Statements and Balance Sheets; how financial ratio analysis is used to make business decisions; how cash flow is managed; how the net present value of future cash flows makes or breaks an investment decision.

Process? Linkages? Financial Management? These are critical sales skills? You bet they are. The also-ran reps will conclude that learning and applying these skills is just too different, too difficult. They’ll stick with the traditional, tried, true and tired value add approach. The winners, just like all winners from time immemorial, will step up, raise the stakes and take the selling profession up to whole new level.

Think about it…

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Where do needs come from?

by Todd Youngblood

Nobody needs to be convinced that a pro-active selling style is preferable to a re-active one. The challenge lies in learning how to become more pro-active; in getting better at anticipating needs customers will have as opposed to reacting to the ones they already do have.

Customers buy the things they need. That’s why most sales reps focus most of their selling energy on finding out what their customers need. That’s why the most common sales questions are some form of “What do you need?” If that’s your mindset though, you have a big problem. If all you can do is ask about and fulfill customer needs, you’re doomed forever to the reactive world. (And by the way, that’s a world dominated by discussions about lowering your price.)

To be pro-active, your mind must be focused on understanding the three things that generate needs in the first place; Plans, Processes and Problems. Understand these drivers of needs and you’ll be able frame and articulate them in a context that favors the value of your own products and services. Not only that, assisting customers with the “Three Ps” positions you more like a member of their management team than as just another vendor.

Plans:

Everything in every organization begins with planning. For some it’s an ongoing, formal process. In others it’s more seat-of-the-pants. All, however, have some idea of their Vision, Mission, Goals, Objectives and SWOTs. (Strengths, Weaknesses, Opportunities and Threats) They all have an internal Culture and have to deal with External Factors over which they have no control. (Things like government regulation, hurricanes, competitors…) All of these things are considered while developing an overall Strategy and the supporting strategies for each major functional area.

Processes:

To implement the strategies, an organization has to design, implement and execute business processes. Each process is comprised of a series of actions taken by employees using an assortment of tools and knowledge. Each employee has a cost as does each tool and each bit of knowledge. It follows, therefore that each action has a total cost comprised of employee cost and/or tool cost and/or knowledge cost. (Thus we have Activity Based Costing or ABC, which is so loved by our friends in accounting.)

Finance, by the way, is the one process every organization has in common. Fundamentally, this process groups “ABCs” into budgets for each department, rolls them up into a total organizational budget, creates a forecasted Income Statement, Balance Sheet and Cash Flow Statement and then tracks actual financial performance with after-the-fact budgets, Balance Sheets, etc.

Linkages among processes are even more important than the processes themselves. Consider, for example, how the receiving process is linked to the manufacturing process which is in turn linked to the shipping process. Because they are linked, they affect one another, even when the linkage is indirect. When the delivery truck is late, the folks on the receiving dock have nothing to do, production is held up, shipping has nothing to ship and sales has to explain the hold-up to the customer who refuses to pay the bill and places an order with a competitor. Note that activities within any given process are linked, processes within your own organization are linked and those processes are linked to still other processes within suppliers, customers and competitors.

Problems:

Without fail, things go wrong with any and every process. Dealing with problems requires the execution of a problem-solving process, and addressing the root causes of problems requires planning. Lower and mid-level managers at your customers spend most of their day identifying, defining and solving problems.

The job of your customers’ upper management, the real decision makers, is working with all three “Ps” to produce profit. The more effectively they do so, the more profit they make. The more effectively you help them do so, the more profit you make.

So back to the original question, “Where do needs come from?” They come from and are driven by plans, processes and problems. To be pro-active, a sales rep must be intimately familiar with customer plans, processes and problems …and oh yes, with the needs created by them.

Pause… Re-read the last sentence in the previous paragraph and give it a minute to sink in.

The “Plans” section talked about eleven distinct aspects of planning. The pro-active rep knows the details of all eleven and how they inter-relate for each key account. That requires lots of hard, detailed, perhaps unfamiliar work.

The “Process” section talked about activities, their individual activity based cost factors, eight different kinds of financial statements and linkages among activities and processes that create an amazingly complex web of interactions that in turn create many equally complex cash flows. The pro-active rep is conversant with all those details and can clearly articulate both the process and financial impact of his or her products and services. That requires an even bigger batch of hard, detailed, perhaps unfamiliar work.

The “Problem” section was probably more familiar. Even most reactive reps look for problems, learn the details about them and sell solutions. (Note: “Solution Selling” is great, but it’s still reactive.)
Now be honest with yourself. Are you really pro-active? Do you really know enough about how customer plans, processes and problems drive their needs? Or do you have a boatload of new skills and knowledge to acquire?

Think about it…

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