If you really want to be consultative in your selling, you must be focused on one of four things…test your sales efforts against this short clip from a recent sales meeting!
© 2010, David Stelzl
Archive for the 'Value Proposition' Category
08
Dec
10
How do “They” Choose “You”?
How will the next sales person be chosen?
So how are sales people chosen in today’s market? It used to be that a friendly, enthusiastic person, who was able to find common ground through activities and interests had it made. Frank Bettger wrote a powerful book many years ago called, How I raised myself from failure to success in selling, focusing on these strengths; and they are still relevant today. However, there are millions of sales people with enthusiasm, so there has to be more. Here are the typical things I hear when I ask, “How were you chosen?”:
Word of Mouth. This requires a reputation for results in a market driven by demand. One or two opportunistic deals may come through word-of-mouth, but to rely on this method for new business requires a buzz in the market – meaning you are offering something in high demand and people are talking, and, you are fast becoming a leader in your space. People talk, so make sure your reputation is above reproach. Working higher up in the organization increases the effectiveness of this process as executives exchange ideas at social functions. Few IT people ever interact with peers from other companies so don’t count on business growth through this channel.
Direct Reference. Trusted advisors are chosen by the buyer. Gaining credibility in a crowded marketplace is not easy, but references can help. Sales people that do a good job of collecting and farming references are way ahead if they use this information correctly. When it comes to calling on clients, posting web content, or even sending a letter or datasheet, well placed quotes from recognizable companies can go a long way in establishing trust before work has been sold. Sales people would be wise to take this into consideration on the heels of every well executed engagement.
Vendor Affiliation. Established connections with other recognized organizations should not be underestimated. This is particularly true when it comes to aligning with manufacturers. I know many companies who live on leads from vendors they partner with. That said, don’t be deceived into thinking that being a “Cisco Reseller” or any other brand reseller will help you. It won’t unless the sales people on the street are aligned with you. Channel programs rarely produce any reasonable leads – rather it is the sales people who are encouraged to push business to the channel that feed the reseller. And they generally choose who they feed.
Personal contact. I generally steer away from selling to friends. This is the problem with multi-level marketing; these people have no friends once they sign up. They are encouraged to reach out to the neighborhood, selling to friends, church members, club members, and anyone in their immediate social circle. It won’t be long before everyone is wary of spending time with this sort of sales person, knowing that every invitation or phone call is an underhanded attempt to sell something. However, that said, personal contacts that are not used to overtly sell can be powerful, and establishing helpful relationships in the marketplace through LinkedIn and other business oriented networking tools or events can be powerful. The key here is to become a valued resource to those around you. One of the things that has worked well for me has been helping people who are actively seeking a new job or who have been displaced from a current position. Pro bono, I offer to help them with resumes, interview skill, and contacts. I don’t do this to overtly solicit their help in new business, but by being helpful. The favor is often returned. The idea is to become a valued contact rather than a leech, and as people observe your creativity and value, you’ll be remembered when they need help later in their efforts to succeed. One word of caution, don’t keep score, just be helpful.
Educational Marketing. One of the most effective means of winning new business in today’s market is education. Consumers want knowledge, and those who establish themselves as educational resources become the advisors of the future. Add trust to this equation and you may find yourself being chosen as the next “trusted adviser”. Blogs, articles, events, and even sales calls that center around education rather than widget sales go a long way in establishing value. They also create business where none existed. Become the best educator you can be. This is where your efforts should be spent…read, listen, learn,…teach.
* Advertisement. I’ve purposely placed these last two items, well,… last. Advertising in a crowded marketplace is generally a waste of time. By this I mean, high-involvement selling such as programming, designing, integration, security, etc. Print ads target masses of people who have no interest in hopes of finding that needle in the haystack. Years ago this worked, but junk mail has taken over the US Post Office and they are non-profit. No one looks forward to visiting their mail box any more. When was the last time you received a personal letter in your mail box? And email has followed. Spam is a problem, don’t add to it.
* RFP Response. Here’s another waste of time. Unless you are in the account, writing the RFP (Request for Proposal), chances are you’re wasting your time. Some companies are required to do this (for instance, Government offices), however, when commercial companies do it, they are wasting your time. The purpose of the RFP is to create a level playing ground. Is that what you want? Does it make sense to strip a company of their value, selling skills, creativity, etc. when looking for an advisor or solution provider? No! If you are making tons of money on RFPs, more power to you; feel free to keep going. If you are like most, this is a losing game, one you would be better off avoiding. If sales are lower than expected, choose to educate as stated above and build your pipeline accordingly. Don’t mistake busy work for opportunity.
© 2010, David Stelzl
01
Dec
10
Google Changes Everything
My educated started with school, ended with Google
I learned about Cobol programming, Fortran, 8-inch floppy drives, and outdated architectures at college. I also learned how to cram for tests, gain the teachers favor, and correctly fill in scantron test sheets with a #2 pencil. Eventually I graduated and needed a brain dump on relevant technology – at the time, Novell operating systems, ArcNet and Ethernet, PCs, and mainframe/PC connectivity. The first part of my education came from professors lacking any relevant field experience, the second from sales people. Sales people educated me, kept me up-to-date on product road maps, and even taught me how to address TCP/IP back when you did everything manually. There was value in product knowledge, and other than some outdated bulletins our company subscribed to (at a very high price), I had few resources to turn to. Even books were out of date by the time they hit the market; on demand publishing didn’t exist.
Google It
Enter Google. Need to know how to cook something, understand a math formula, fix an engine problem, find a verse in the Bible, or learn about a technology? Google it! I used to be a central resource of knowledge, teaching my kids at home. No more. Now I just have one answer…Google it. Just about every question that comes at me during the day can be answered on Google (well almost every answer). We’re almost at the point where I don’t have to ask my wife what’s for dinner! Chances are it’s on our family blog and all I have to do is Google the question.
They Can’t Google Your Expertise
So what is the sales person’s value? It was about product knowledge, coming features, and compatibility. Not any more. It’s all on Google. So where is your value? It comes back to “improving the client’s position”. What Google doesn’t have is your expertise and customer interaction. You can find a million articles addressing someone else’s situation, but not one that exactly fits your client’s current situation right now, with the current market conditions, partners, employees, plans, and current technology. This must become central to your value proposition and you must be able to communicate it with confidence.
They can’t Google Mine Either
In 2003 I was looking for something new. My wife sat me down and said, figure out what you really love about the work you’ve done in the past, what you don’t like, where your passion is, what won’t commoditize in the next year, and create the perfect job. Then, taking a note from Jim Collins, author of Good to Great, I added the economic engine concept. (Notice this type of decision process is not in Google). Speaking, writing, teaching, mentoring…these are the things I love. I do them at home in our homeschool program, I do them at Church,…why not do them for a living. So on December 17, 2003 Stelzl Visionary Learning Concepts was formed. I found my niche and have never looked back. In fact, in the early days whenever difficult times would come, I would simply call up one of my buddies in product sales and ask him how things were going. Their answers always validated my choice. Whether or not I sold a product didn’t matter. What did matter was that I offered something based on intellectual capital, something uniquely mine. I don’t sell hours, skews, or discounts. I sell IP (Intellectual Property).
Find your Niche and Sell it!
There are millions of things to specialize in, and for the engineer, products are included. In sales, you must pick something you believe in, are passionate about, and something you can be the best at. Then it must have an economic engine that works. Take inventory of your intellectual capital. What value can you provide which cannot be commoditized through Google or filled through your prospects everyday social contacts? Hopefully you can come up with something your company can offer or support you in. Then become the expert in it, and figure out how to take it to market. But don’t stop the learning process or the market will quickly pass you. In 2011, Find your niche and go out and sell it!
© 2010, David Stelzl
Twelve things that define a consultative sales person
1. They improve the client’s position – a business level improvement.
2. Product is never the business driver; it is simply a tool being used in the improvement process.
3. Money is not at the center of negotiations, likelihood of successful improvement is.
4. Discovery is an integral part of the selling process; fees are not quoted until the project is understood.
5. The discovery process involves both technical and business people, and the sales person is intimately involved with each business discovery meeting.
6. The primary targets involve people who have predictable needs, not those shopping for widgets.
7. The projects show specific improvements in operational efficiency, risk levels, competitive advantage, or return on investment. They are measureable and understood before the project is sold.
8. High-end consultants and engineers are part of the delivery process.
9. Projects are sold with a scope of work, not quoted as a line item with an associated discount.
10. They consider business people to be their peers, not IT.
11. They are continually learning, investing time in reading, and attending educational offerings.
12. They differentiate their offerings with intellectual capital, not discounts.
© 2010, David Stelzl
When the guy comes by to cut my lawn, he’s a vendor. If he suddenly becomes an expert on soil conditions, timing of treatments, pros and cons of various products (including organic options that build the soil over time), he’s on his way to a bigger payday; he’s becoming an advisor. A few years ago I contracted with a national lawn care company. My lawn was a disaster. Full of weeds, large patches of dirt, erosion on the hill beside my driveway, and generally out of control. Now, I don’t mind telling you, I am not big on outdoor landscaping projects. There are other things I’d rather spend my time on, and between homeschooling seven children alongside my wife and running a business, I don’t have much free time. But for some reason, the lawn care company wasn’t making the kinds of improvements I would expect. When I had questions, they were short on answers.
Then one day I received a call from a guy who used to work for a lawn care company, but now runs his own. He was familiar with my lawn and recommended I take a different course. He claimed the company I was using only uses chemicals and by continuing with my current program I would never actually improve my yard, I would just keep pouring in chemicals to make up for the bad soil conditions. Instead, he recommended a series of treatments that would over time, create looser soil, build nutrients back into the soil, and hold water so that the grass would have a chance to get established before the hot summer weather roles in. Lawn care companies that act like vendors are selling seed, fertilizer, weed killer, and other soil products. The advisor is selling me a green lawn. Which do you sell?
© 2010, David Stelzl
24
Nov
10
Death of a “Product” Salesman
Photo by Hannah Stelzl
Remember Arthur Miller’s 1949 play, Death of a Salesman? Loman’s downfall is directly tied to his continued misconception of himself…not so different from today’s product sales rep. The product sales rep who continually studies the features through the companies online training resources and Webex meetings, walks into sales situations confident that his product will do the job.
Little does he know that Google has already been there. For weeks or even months, the technical team has been pouring over data sheets, customer reviews, technical blog notes, and competitive solutions. With a few key search words, it’s all right there, at their finger tips. Lists of bugs, future release promises, user forums, and independent developers talking about what will come next and where this product fits best. In some cases that may kill the sale, in others, the product is named number one by some respectable e-zine.
In Jeff Jarvis’ book he rights, “Google has changed everything”, and he’s right. If your 2011 strategy is to be the go-to on some particular technology, expect two disastrous things to occur. First, expect your clients to be on Google, and likely ahead of you in product knowledge. Second, expect your product to be one of many commoditzed offerings. The misconception of being there to deliver inspiring slideware on product features will be the demise of next years sales team.
© 2010, David Stelzl
Photo by DStelzl
Everyone works to move the sale up the ladder – here are 10 things that will take you right back down (in no particular order):
1. Kicking off with your PPT slide show
2. Beginning the meeting with obvious open-ended sales questions
3. Allowing their IT person to become the focal point of the meeting
4. Pushing to close the deal this month – quota being your primary motive
5. Focusing on product features
6. High-Tech jargon
7. Asking, “What keeps you up at night?”
8. Not having researched their company prior to the call. “So, what does your company do?”…duh.
9. Lack of confidence in front of executives
10. Poor presentation skills
© 2010, David Stelzl
Illustrations by David Stelzl
Do you create business or just fulfill it? Look at your pipeline…where do your deals mostly come from? Referrals? Referrals are good, however, there just aren’t enough of them. When the economy is weak, companies cut back on expansion, decision making moves higher up the ladder, and sales cycles lengthen. Only those who are able to create business can experience long term success in this type of market.
The 5% Rule
Michael Bosworth, back in 1995, wrote, “Assume 5% of the people you might call on are in the market for some new thing (in our case, new technology), the remaining 95% don’t perceive they have a need” (Paraphrased of course). But they do have needs, they just don’t know what they are, or feel they are impossible to solve right now. The average sales person is going after that 5% group, and it’s crowded! The competition is fierce.
Creating business
Creating business means, going after the 95%. The creative sales person gains access to buyers who don’t know they have a need, and then demonstrates that need with compelling justification and a track record to prove they can fulfill what they’re talking about. Security is just one area that is predictably needed in every account. Most companies are doing the wrong things, and security issues are going unaddressed. But how do you find these people, and what does it take to move them forward?
The Value Proposition
We’ve been lied to. We’ve been lulled into thinking people want great technology features; the latest gadget (Unfortunately, the latest gadget sells for about $500 and is made by Apple, which you probably don’t sell). But they don’t. At least the economic buyers don’t (well, maybe they do want an iPad). They want strong businesses, profitable businesses, efficient businesses, and secure businesses. The “value proposition” must focus on real business value, and that means you’re addressing real business issues. As you’re planning for next year, start thinking through your message, your selling strategy, and what you say in your meetings, especially those early meetings while introducing your company. Is your message unique? Compelling? Interesting? And are you getting in front of people who can make a decision? Are you getting demoted back down to non-decision makers after a first meeting? Be honest with yourself. If you’re answers are, “Not very unique” and “Not associating with higher level managers”, your messaging and positing are likely central to the problem. From there, you need a way to reach the 95%. And that means getting the message out. Events, social networking, educational presentations,…there are numerous ways to do it. So, bottom line; first you must have a message built to stimulate action, then a means to take it to market. This is the foundation of your 2011 sales strategy.
© 2010, David Stelzl
Old School Selling
Product knowledge used to be a key part of the sales role. “Tell me what you have, how it works, features, benefits, etc.” Google has changed all of that. Today the purchase starts with Google. Since most high-tech sales are done by referral and lead follow-up, the prospects tend to be people who are already in the research process. They are Googling to learn what they can about technologies under consideration, and given the technical bent of the IT people doing the shopping, they likely spend more time reading and researching the bits and bytes than you do. Sales has become a commodity, and the basic sales person is no longer worth their wages. An electronic chat person online does almost as good, and the prices online can’t be beat. So what’s the answer?
Reaching back to the 70′s
In the 1970′s Mack Hanan wrote “Consultative Selling.” He describes a process of measuring return on investment over various clients, creating a database of norms from which the sales person can now draw justification based on ROI, and predict hurdle rates to sell the product. While I tend to steer away from ROI with most sales (given our inability to face CFOs with confidence), I do whole wholeheartedly embrace the idea of focusing on value (in this case, financial justification) to improve the client’s position. Every budget has business purposes behind it. The sales person must become enough of a consultant to figure out what these are and then demonstrate a connection between the proposed sale and the client’s business needs. If you want to beat the online e-tailors, you’ll have to change your value proposition; you’ll have to become a consultant.
So What is a Consultant?
The first thing people think of here is billing time, but that doesn’t do it for me. When I hear someone say, “I’m a doctor”, I get it, same for insurance rep, teacher, police officer, etc. But when I hear consultant, I have no idea what they really mean. They might be anything from a PWC partner to unemployed…I’d rather hear what they do than what they call themselves. “I work with manufacturing companies, helping them improve efficiencies in the widget manufacturing process.” This works for me. It’s an improvement in the client’s situation, taking them from current to future state, with improvement, cost reduction, efficiency gains, or risk reduction (you can fill in yours), in mind. They provide the analysis/discovery, make recommendations, and point them in the right direction with practical, specific information. In the end, it may be a product sale, but the real sale is in helping the client acheive something specific. Note: the later you are in the sales cycle, the less likely it is that you actually do this.
This doesn’t mean that every consultant bills time. Some make their money through the sale of products or other services. But they consult with the client to bring this value, delivering it through the product or people they then sell, others will do the follow-through work themselves with an associated fee. So in 2011, consider this; what problems do you specialize in solving, what business benefits or gains do you specialize in giving? Can the value you bring be provided through Google and e-tailors, or are you unique in some way that requires you be there? Is your value worth the additional price of the product or is the client better off buying it from a major distributor? This is the question we all need to be asking as Google grows.
© 2010, David Stelzl
What happens when the client can’t afford something? Naturally, the conversation turns to dollars and discounts. “We don’t want to short-cut the solution, yet we can’t afford the price.” In other words, “It’s not in our budget, but we still want it – what can you do?” We talked about establishing value prior to price several days ago, but now the price has been proposed, and the client can’t come up with the money. Or, in another scenario, you have a contract (perhaps recurring revenues through managed services) and the client can no longer afford the level of services originally contracted for. So what do you do? Here’s a simple way to get back on track.
“Price aside….” Money can never become the central issue. People don’t figure out how much they have to spend and then look for something / anything that will fit the budget. At least they shouldn’t. That’s how people end up with a lot of junk they just don’t need. Instead, set the price aside for a moment and figure out what really is needed. If money is tight, scrutinize what the client really does need. Great consulting means improving the client’s condition, not selling more stuff.
So I simply say, “Price aside, let’s look at what we are proposing and figure out if this is really what you need.” Let the client see the pros and cons, the value and risk, etc. Ask probing questions such as, “If we cut this out, people will be able to send any type of sensitive company information through email unchecked. Is that okay with you?” “If we cut this out your data won’t be backed up off site. So if someone forgets to run the back up, the tape fails, or the person who takes it home loses it or it gets stolen, your data will be unrecoverable and on the street. Is that okay?”
Force people to look at the solution, it’s value, the risks and opportunities. They may still not have the money, but if it’s clearly what they need, at least they will want it, may find the money, or start saving for it. Discounting is never the right answer.
© 2010, David Stelzl
