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Illustrated By David Stelzl

One of my first experiences with selling cars came early in my marriage when we decided to sell our Dodge van.  The vehicle was in great shape, no major problems, and well taken care of.  I listed it in the newspaper, and a few days later  received a call from a potential buyer.  He was a business owner, running a restaurant, and thought he might be able to use this van for his work.  After driving the van, he agreed it was in good shape, but then started complaining about modifications he would have to make before this van would really meet his need.

There’s an old Proverb that says, “It is good for nothing, cries the buyer.  But when he has gone his way, he boasts”.

The Strategy

In this case, the buyer gives hope that the sale is done, but then starts picking apart the product in an effort to bring the price down.  My car buyer had me believing I had made the sale.  Once he saw me mentally counting the money, he knew he had me.  Instead of paying me, he was looking for sympathy, adding up the costs of modifying the product to meet his needs. In the end, I gave in and sold him the vehicle for much less than it was worth. I felt taken once he left, and I am sure he was boasting on the way home.   I see this in business today.  Buyers will waver back and forth, moaning about changes or features that aren’t just right, looking for sympathy and price cuts.  The seller then feels bad and caves in.  Even the best sellers are taken by these tactics when the buyer plays his part well.

The Counter Strategy

1. First, it’s important that you know what your product is worth.  I knew the blue book values of my van…so I had this one covered.

2. Don’t try to shoe-horn your product or service into situations where it isn’t really a good fit.  In my case, I was not doing this – it was the buyer who called me, yet  I do see sales people trying to make their expensive products play in the SMB, while smaller companies accept projects that they are just unqualified to do.  In both cases, the pricing is often inconsistent with the real value of the project.

3. Don’t mark your close probability at 100% until the deal is done.  When I get a verbal commitment, it’s 90% – if an economic buyer gives the verbal. A verbal from an IT person, representing a new client, should be considered 20%.  In the case of my van, I was thinking 100% when he said he liked it.  I became emotionally involved in the transaction and gave into his tactics.   Looking back I realize this buyer was a shrewd businessman.  He knew what he was doing.

4. Stand firm.  If the buyer starts whining, go back to success stories, or offer to provide additional consulting with additional fees.  Nothing really works out of the box in the IT world, so assume there is work to be done.  If he can’t afford it, offer some less expensive options.  Chances are he is just working you on price.

© 2011, David Stelzl

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At the Buffalo US Airways Club

This morning I had the honor of presenting to a group of business owners and sales professionals at Ingram Micro’s Technology Solutions Conference in Buffalo.   I covered material from my, soon to be released book, From Vendor to Adviser…how do sales people move from point product selling to high-involvement selling; how do they reposition themselves as an adviser.  People have been talking and writing about this for decades, yet it still seems to be a hurdle companies have yet to overcome.  In a sidebar conversation I was asked, how long should it take a rep to ramp up?  This business owner was asking, “If I hire someone to sell, how long should I give them to start producing?”  This is a great question, and one more people need to be asking.  Whether you yourself are that new rep, or you oversea a team or company, hiring and getting started with a new company in sales is no easy task.  Some thoughts are worth considering:

1. Watch out for Retreads.  I use this term when referring to sales people who were, at one time, big hitters.  They may have managed large accounts, worked for global companies, and earned significant commissions and awards; but for some reason they failed to keep pace with the industry.  For the past decade (perhaps) they have been hopping from one company to the next, or maybe the company they work for continues to employ them, but they can’t seem to close.  Don’t become one, and don’t hire one.  The technology industry moves fast, and old experience is just that; old.  I doesn’t matter how old you are, it matters that you are a learner – innovative, creative, hard working, and a student of this industry.

2. Forget the Rolodex.    If you’ve worked in sales long enough you may have actually used a Rolodex.  Does anyone know what this is anymore?  The point here is, don’t expect to find a rep that has numerous contacts who are ready to buy as soon as you hire.  It happens occasionally, but don’t count on it.  Instead, your company must be prepared to help with lead generation at some level.

3. Lead generation requires marketing.  If you run or work for a smaller reseller, like many in today’s session, you can’t expect to hire someone who will go out and generate new leads, with enough GP to make it big in the first few months.  I recommend companies hire with a marketing program in force.  Paying base salaries, benefits, and guarantees to someone who is going to start from scratch using the Yellow Pages, is a slow way to start in this business.  Plan events, webinars, and other marketing campaigns, and hire people while in process.  Having a list of qualified leads is the best way to help someone ramp up their territory.

4. The Mentoring Process is important.  Michael Gerber in his book, EMyth Revisited, does a great job of explaining what happens when managers hire in new people without any formal ramp up process.  While it may seem expensive to ride around with your new rep, send them to some training, or hire a sales coach to work with them (one who understands your business already), the cost of not doing this is higher.  Hiring people who take a year to ramp up is far more expensive, and if they don’t make it, you’ve spent a lot of time and money on nothing.

5. Careful who you hire.  Learning to interview is one of those things few have gone to school on.  It seems like hiring is supposed to just come naturally to those who manage, but this is far from the truth.  Years ago, when I was running a large consulting and sales team, I spent a significant amount of time training people to hire great people.  This was one of the best investments I have every made.

© 2011, David Stelzl

 

The Importance of a Plan

Recently I have been working with a couple of different companies on marketing and business plans.  This morning, while preparing for a two day meeting with a security software company in Florida, it occurred to me how important it is for every sales person to have a plan in place if they aim to grow their business.  Hopefully this will help you put some structure to your next two quarters as we finish out 2011.

You plan should contain some or all of the following:

1. You strategic aim or vision.  This is where you are personally headed with your business –  your long term goal should be to run an account team (including dedicated presales, inside sales, and admin).  You may think this is impossible with the company you work for, however, it’s always a question of return on investment – your management thought you would quadruple sales, they would dedicate some people to you.  Even if you are a hunter, you still want to be running a hunting team.  To do otherwise is to set yourself up for starting at zero every quarter for the rest of your life.

2. Your niche – what will you be the adviser in.  I have written much about this topic, but here you want to identify it.  So stop and write something down, edit it later.  Where is your focus, and where do you specialize?

3. Your people group – again, stop and write this down.  Who do you love calling on, and where will you focus your growth.  You may not have complete control over this right now, but put it down and work toward it.

4. Identify your key competition.  Often when I ask, I hear, “We don’t really have any competition,” or “IT is out primary competition.”  While that may be what seems right, it really isn’t.  Know who is out there, and what they say is their value proposition.

5. Pricing – study and understand fee setting and write down some guidelines for yourself on how you will set fees, where you will discount, and under what circumstances.  Also, have a plan to learn negotiating skills and work through it in the coming months.

6. Identify key partners; if you resell, include vendor sales people in your region that you can help, understanding that they will often bring you into deals and promote you as the go to channel partner once you establish loyalty.  If you are on the product side, the same is true with channel partners.  Plan to make this model work.

7. Plan out campaigns and events.  Encourage your company and partners to join you in setting up events, speak at local business meetings, write articles, do press releases, and set up webinars.  Have a marketing strategy to take this program forward.  Also, get a strategy on how to leverage social media – everyone is doing, few understand how.

8.  Put a plan in place to build your pipeline.  This should include time with existing customers, past customers, and new prospects.  Each should be approached differently, but a plan is needed to balance your time and think through your approach.

Print it, update it, use it.

© 2011, David Stelzl

(You might have to turn up your volume on this – the audio is weak)…Why do some deals look good, then stall out?  In this short clip I explain what it is that makes deal justification strong, and where things fall apart.  I invite you to share your comments and experiences.

© 2011, David Stelzl

Photo Taken By Hannah Stelzl

I was talking with one of my clients this morning about Demand Generation follow-up.  After inviting and presenting to over 40 potential buyers – executives who have both risk and liability, he is in the process of calling them to schedule next steps.  A quarter of the way through his list and so far, everyone he has called has agreed he should come in to review their security…why is it so hard to get sponsorship for these events with this kind of results?  A few tips on funding…

1. First, my client is doing something most don’t do – that is, following up immediately.  In his case there were multiple solution providers involved. The sponsor made the mistake of assuming they needed more attendees.  In this event, my client invited most of the attendees and his results would have been even greater for the the sponsor if he had been there alone.  You must convince your sponsor that the number of attendees is less important than the number and quality of attendees who agree to a follow up assessment.  This is where impact and likelihood will be demonstrated!  This is where the deal will close.

2. Sponsors are not seeing the ROI on these events.  Why?  Two reasons; if there is a strong response, solution providers may not be keeping the sponsor informed.  But more likely, the hosting solution provider is not inviting the right people to the event.  More often than not, sales invite their IT level clients and the sponsor is invited to be the speaker.  This does not make for an effective event in most cases.  In the above case, we did reach out to Asset Owners – making the follow up meetings much more likely to produce business.

3. The presentation, or presentations are not geared to driving business.  That’s right, the presentation must be crafted to drive people to buy.  Purely informational presentations are generally technical in nature and do not lead to emotional response.  On the other hand, product pitches are often hour-long commercials geared to technical audiences with no money.  Interesting, informative, but not built to drive new sales.  The above meeting was focused on cybercrime trends – my client will follow up with details on why security strategies are failing, showing his prospects how to make sure they don’t have unwanted intruders hiding in the bowels of their network.

How do you get funding?  It’s a bit like getting angel investors to fund a new venture…JMF used to be there, just waiting for you to announce a date.  Those days are over.   Both large a small companies have to justify the use of JMF;  here is how to approach it:

Use a letter:

  1. Have a plan; dates, venue, speaker, target audience (which should be buyers), a current hot topic (like a security briefing), and a great speaker with a message that will both attract high level attendees and drive toward the need for follow up.
  2. Choose your sponsor list – select and prioritize your vendor partners who seem most likely to contribute or Invest in this opportunity.  Think of this as an opportunity – one that will land your sponsor a strong return on investment.
  3. Agree to work on this as if you have angel money – meaning you really do intend for there to be a return on investment, and you are committed to there being one.
  4. Send a personal letter to each sponsor – with some customization to each, sharing your plan, your expected outcome, and how it will contribute to their sales incrementally.  If you are not aware of your local channel manager’s quotas, you should be.  Sell this program as a way of helping them hit their numbers.
  5. Offer them sponsorship levels.  For different investment levels, offer different levels of involvement.  This might include an opportunity to say something, have a table, have logos displayed, etc.  Like a trade show, different sponsors will pay for different levels of advertising.
  6. Agree to keep them informed as to your progress.  Share with them something from past events to let them know you understand your program and demonstrate you have a track record of success.
  7. Follow up with a phone call to review and sell them on the idea.
  8. Like sales – don’t take no for an answer…

Not every company you resell for will sponsor you.  There are some vendors who are focused on driving higher level business and invest only in their top producers (you may of may not be one of them).  Some are focused on small and medium markets, others on enterprise business  (where do you fit and is this a good partnership to be in?).  Going through this process should clarify who will sponsor you in the future.  If they say no, find out why.  Is there a performance issue on your part from past events or sales?  Make sure you understand who is going to sponsor you in the future, who is helping you grow your business, and who is truly interested in helping you serve the market you work in.  These are the companies you want to wrap your services and intellectual capital around going forward.  If they claim there is no JMF – remember, its like any sale; budget doesn’t really matter when the ROI likelihood is strong.

© 2011, David Stelzl

 

Where’s’ the ROI for Lunch & Learns?  The biggest problem is getting the right people there, closely followed by effective follow up.  I recently worked with one client as he was preparing to host such an event. The challenge here – there were three solution providers involved, not just one.  The others made some calls I guess, but we worked out a script that focused on business leaders and the threats that target their most critical assets.  We positioned this, not as a lunch & learn, but rather a briefing – an urgent briefing for business leaders in the community.  A forum to get influential leaders in a room to review the situation.  My client made the calls personally, using this messaging – the results speak for themselves…

  • 70 some people signed up
  • 58 of them signed up because of my client’s calls – the other solution providers jointly contributed about 25!
  • 47 of the 70 signed up through my client’s efforts, and 43 of his invites actually showed up. In other words, 43 out of 58 came for the business leader meeting…
  • My client was prepared to work the room.  He made contact with everyone there (while his competitors sat as spectators)…his next step is to take a follow up message, which we have already prepared, out to their offices.  His competitors are probably trying to figure out what to do next – he’s on the phone right now, just one day after the event, setting up qualified meetings with decision makers.

The ROI comes in understanding how to make a meeting like this work.  I just got off the phone with a major manufacturer who has often contributed to these types of events.  His comment…He doesn’t see the ROI.  It’s hard to track results from these types of events. He’s right, but the problem isn’t the event…it’s a misunderstanding of how to make the event work…learn this and you’ll be way ahead of the competition.

© 2011, David Stelzl

 

Visiting Cisco in Mumbai

In a recent sales opportunity we (the seller and myself acting as a sales coach) were charged with providing a competitive quote on unified communications (UC) products.  The company already uses UC, so the quote is simply an upgrade.  The seller assembled the quote, listing all of the necessary hardware, software, and services to move their client to the latest version.  The problem here is, the proposal has no differentiation!  It’s commodity product, necessary services, and a price.  You might say your uniqueness is in your people or your certifications, or perhaps you are the go-to provider for that brand of UC.  But in this case, you don’t have a platform to demonstrate value, so no one is going to see it.  What do you do?

The answer is in the discovery process.  Most of these deals are assigned to a presales technical person.  The sales rep has simply become a relationship manager, adding no value to the deal.  The technical person is generally too technical to effectively interact with the decision maker.  So the sales person and decision maker wait on opposite sides of the deal, the sales person hoping for a “yes”, and the decision maker checking against budget and competitive quotes.  Instead of sitting on the side lines, my client and I put some business level questions together to help us uncover the business needs surrounding this upgrade.

  • How does this prospect use their current unified communications platform?
  • What applications are they using with their phones
  • How do they use collaboration technology – how could they be more efficient if they knew more about it?
  • What are they not using, that would really add to their current business process?

This list goes on, but the point is, IT can’t answers these questions.  They may have an opinion, but it won’t be accurate.  These questions are asset owner questions.  Behind them is the understanding that someone is running a department that would benefit if they knew more about the power of UC.  With this in hand, the seller now has the opportunity to compare their findings with the technical findings their engineer will come up with.  With both in hand, the seller can now advise the client on how to change the way they do business.  Chances are, if the seller spends enough time with the top producers in this company, they will discover some of the secrets behind high performing employees, tie some of this success back to technology, and find ways to improve the current process with the latest upgrades, features, and add-ons available on a UC platform.  This is what it means to provide value – an effective value proposition.

Stay tuned for next month’s Free webinar – mark you calendar for June 8, Leveraging the Discovery Process to Justify New Business.

© 2011, David Stelzl