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death of a salesmanWhat’s Your Conversion on Cold Calling Prospects?

Ask your peers – the successful sales people are probably farming accounts they’ve had for years.  Others have a different strategy. No one wants to hear from a sales person they don’t know.

I’ve had several coaching calls this week with sales people who are either new with their company, or new in their role. Some are large company sales people calling on enterprise accounts, others are SMB resellers selling managed services. The story is the same. They’re making 100s of cold calls, with about a 1% return – converting to meetings.  Note, this is not a sale, just a meeting.

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They’re wasting their time.

Not only are cold-callers wasting time – their managers will soon give up on them. Even though they are the ones that assigned the task of cold calling. The misconception is, if you make enough calls and your message is good enough, you’ll get a meeting. From there you can show them value through the amazing features of your product, and make the sale. It’s wrong thinking – 90s thinking.

Death of the Salesman

I wrote an article years ago called, “Death of a Salesman” where I explained many of these concepts. Of course, I stole the title from Arthur Miller, but I did give him credit. Sales as we know it are over. You might still be making some headway, but don’t expect it to last. 80% of purchases today are made based on Google research. Most sales calls come after the product research. The research has been done, the shopper knows the street prices, and now they want a deal.  Google is taking over the function of presales consulting.  Google knows more than you or your presales engineer will ever know.

How do you know if I’m right? Look at your conversion rates. Are you converting more than 10% of your calls to meetings? I would be surprised if more than 20% of your calls lead to anything more than voice mail. I spoke to one guy this week who is reaching 30% of his audience, but still, only about 2% are converting to meetings. Another rep in the enterprise space can’t reach anyone meaningful.  Several of my calls were with people who have recently been handed lists – they know their primary contact is too low in the food chain, and they need a way to move up. But how?

A Radical Approach to Selling

Over the past 12 months I’ve been conducting workshops on a radical approach to sales. If you look at my sales concepts in detail, you’ll see they have a lot more to do with marketing than sales. David Merman Scott recently published an article supporting this idea – sales and marketing must merge. He’s right. That doesn’t mean the marketing department goes away. We still need meeting planners, data sheets produced, and marketing graphics.  But the marketing concepts are what drive new logo business. And sales people will need to master them, essentially becoming their own marketing department.Blog Subscribe Ad

Look at the big 4 – they are consultants…but behind it all, everyone is still in sales. They create business. No one wants to meet with another sales person. And no one wants to see your corporate presentation. But there are things you can do.

Marketing is a science. The science of how we think and what we respond to. Conversion depends on great marketing. Consulting is the art of helping one move from point A to point B – where Point B is the preferred state to be in.  Can you do that?  If you think the engineers are responsible for this and your job is to set appointments – you’re wrong.  You need both. You need the ability to attract new business through marketing, and the ability to help them solve a problem at the business level. This is consulting. This is why PWC wil continue to prosper long after the technology sales person is out of work.

Can you become this person?

The answer is yes. The university system would have us think we need to go back to school, get a new degree, and start over. The truth is you can make the jump by applying the concepts given in Napoleon Hill’s well known book, Think and Grow Rich. There are 17 things to do, but the bottom line is a passion to get there. From there it’s working hard to get there. Reading the right books, working with the right coach, and being willing to invest in the right tools.  Your company may not allow you to expense these things – what should you do? Look for the ROI. If you don’t you’ll lose. Spend your money wisely, but make the investment where you’ll get a strong return.  I spend my own money on coaching, books, and marketing tools every month. It’s paid off – it’s multiplied. I’ll continue to invest.

That’s right – there are tools. Learning to use LinkedIn as a marketing platform. Learning to write great copy. And then putting your new marketing brain to work – what would attract a new logo buyer?

One of my clients actually took my advice and wrote a book!  I have it right here – he sent it to me last week and I was amazed as I held it. There’s nothing more powerful than sending your book to a VP, and then following up with an email to…not sell them something, but talk about the book. From there the sale is easy.  But you don’t have to write the book. You could send someone else’s, but it must be profound, and you must have studied it in a way that brings new applications to benefit you new prospect. Writing a special report can be almost as powerful….from there, its a matter of finding ways to get your book or report to the right people. This is a whole lot easier than cold calling.

Marketing events are still the number one way to get business. The problem is, most are doing them wrong. This won’t lead to business, and will often leave you wondering if it’s worth the investment. You’ll need to spend more to do it right. You’ll need a great speaker – which you will have to pay for. But if you can land 20 new logos, as I did a week ago, your return will be obvious.

You will also find yourself needing auto-responders, your own personal blog, hard-copy sales letters, and landing pages. These are all marketing tools, and they work. But chances are, your marketing department won’t use them in a way that creates new leads for you. It’s up to you to figure out how to use them, and how to bring in new business.   I’ll give you more in the upcoming Ingram event – What I Learned About Sales While Working on Multi-Million Dollar Projects with PWC.

© 2015, David Stelzl

P.S. One thing I learned from PWC is how to price…resellers are losing margin every day simply by how they go about pricing….I’ll show you some strategies that are easy to apply later this month. Don’t forget to sign up.

Not only are they wasting time; their employers will soon give up on them.

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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 allows a company or individual to command higher fees?  I’ve written various posts over the past few weeks on fees, and yesterday, I commented on setting higher fixed fees vs. totaling your projected hours and presenting a fixed amount (this generally leads to underestimating and a decrease in project GP).  But what allows a company to propose higher fees without the competition coming in to win the deal on lower pricing?  Commodity sales compete on price…high-value sales don’t.  Here is a list of category offerings I use when considering how to go to market.

1. Product

2. Staffing

3. Projects

4. Strategy

5. Vision

The order builds from pure commodity to greater intellectual capital.  On the low end, companies like Dell are selling low priced desktop systems online.  Nothing unique here, but they are fulfilling a market demand; consumers want inexpensive computers, in fact they demand them.  Dell can fulfill this market demand by finding more efficient ways in manufacturing and distribution.  What was once a $5000 entry point in the early 80’s (and 5K back then was something to talk about), is now a few hundred dollars.  Netbooks and IPads may further change the game here.

Staffing follows with various skills that set apart individuals.  Projects help companies move forward with initiatives that change the business.  This is where value pricing really starts to make sense.

An interesting question arises with my model at this point.  What about a utility such as SaaS like Salesforce.com?  Cloud computing should fit in here somewhere…but we’ll come back to that another day.

As we move up, start thinking about Accenture or PWC.  Strategy commands big dollars.  In a prior life I referred to our growing company as, The Andersen Alternative (Back before the days of the Accenture brand).  The message was clear; we were consultants, working up the model toward higher value consulting, while selling the technology to implement those things we recommended doing.

Finally we have people who create vision.  People like Geoffrey Moore (Author of Inside the Tornado) come to mind.  Consultants working at the top with large high-tech companies, helping them figure out where to go next.

Most resellers are not built to reach vision creation; their sweet spot is probably in the project area.  Larger integrators are beginning to build business process, ITIL consulting, and other forms of business consulting into their model to offset the commoditization of product.  If you don’t start thinking about this now, you may find yourself without profits next year, and perhaps out of business in the near future.  But let me point out, the problem is not with the area you play in, rather it is in the model you’ve built.  Resellers are built to sell projects, Dell was built to sell hardware.  Both have high profit potential…but building one model and selling another is destined for failure.

© 2010, David Stelzl