Web Site: http:www//esresearch.com
Bio: Dave Stein is founder and CEO of ES Research Group, Inc., a service that objectively evaluates sales methods, training providers and tools. Through Stein's past work as a sales consultant, coach and trainer, he has a unique view of sales methodologies, sales training approaches and the cultural as well as business changes required for corporations to excel at the sales function. Author of the business best-seller How Winners Sell, Stein is quoted and recognized in leading business magazines and websites, including Fast Company, The New York Times, Business Week, Inc., Fortune, and Forbes. He writes a monthly column for Sales & Marketing Management magazine. Contact info: 1 (508) 313-9585 Ext 706 dave @ esresearch.com
Posts by :
- Buying preferences?
- Buying tendencies?
- Alternatives they may have other than you?
- The money
- The customer achieving their business goals and objectives
- Understanding what those business goals and objectives are
- Positioning your product and service so that the customer can see without a question of doubt how your product and service will help them achieve their business goals and objectives in financial terms
- The shininess of their product
- The reputation of their best lead consultant
- The fact that their CEO appeared on the cover of Forbes magazine …
- How do you put that in financial terms?
One of the many things I learned from years of flying my plane is the concept of “staying ahead of the plan
Picture this: It’s 11:00 at night, raining heavily, ceilings at 200 feet, wind gusting to 25 knots. You’re flying a single-engine Cessna into Martha’s Vineyard airport. You can’t see anything outside the airplane.
Great teams of any sort are rarely great without great leadership. When I think of great team leaders, I thi
nk of Kristi Fox, Second Vice President of Group Client Relationships, at Minnesota Life, a Securian Company.
Marketing automation, especially in the B2B space, has come a long way in the last decade. During that time we have seen sales force automation offered in an SaaS (software-as-a-service, a great example of which is Salesforce.com) environment experience tremendous adoption across verticals. Best-in-class sales teams are managing their process automation and pipeline reporting through these tools to the great benefit of their companies. Marketing organizations have not been as lucky.
Dave Stein is the author of “How Winners Sell,” and has been a long-time contributor to Expert Access. “How Winners Sell” is a step-by-step book on how to win in the complex sale.
In 2005, Dave founded the ES Research Group, which is the “Consumer Reports” of sales training and sales-training approaches and programs.
Dave is often quoted and recognized in leading magazines including: The New York Times, Business Week, Fortune and Forbes. He writes the feature monthly column for Sales and Marketing Management Magazine, and his “Commentary on Sales Leadership” blog has been featured on the website of Fox News, Reuters, Nielsen and Hoover’s.
HAS THE COMPLEX SALES PROCESS CHANGED?
Yes, a lot. The complex sale, five, eight, 10 years ago was complex and difficult enough. But now that buyers have a new tool from their perspective—a new weapon from our perspective (sales)—that is a significantly improved, enhanced and deeper internet to find out about us (vendors)—our successes, our failures, our competitors, our capabilities, our strengths, our weaknesses and our challenges—they have so much at hand.
THEY DON’T REALLY NEED US AS MUCH ANYMORE—GET OVER IT
They need less of us than they’ve ever needed before.
By the time they call us in, they are well-educated and have a good idea of who their buying preferences are. That’s important. Ten years ago, they’d have to call us to get information, speeds, feeds, features, functions, performance specifications, colors and delivery dates. But now, just a few quick touches of the keyboard and a lot of that is already available.
Things have changed a lot. Great salespeople adapt. They win. Others don’t.
THE NUMBER-ONE COMPLEX-SALE CHANGE—YOU ARE NOT IN CHARGE
The number-one change in the Complex Sales Process is that buyers are in more control now than they’ve ever been before. This all accelerated with Walmart years ago with their focus on low cost and lowest price. I’m not in anyway judging Walmart, they’re obviously very successful. They decided that when they were in control of the sales cycle—and their suppliers and vendors were not—they were in a much better position to serve their customers.
THE SQUEEZE IS ON
So they learned very early on how to squeeze providers, how to squeeze vendors and make them abide by Walmart’s rules of purchasing and procurement.
This whole approach and concept was well-studied amongst senior executives and corporate boards in America. It evolved into, and a whole new intent and approach on strategic procurement and strategic purchasing began. When the economy tanked and Boards of Directors looked at ways that they could save money if they weren’t able to increase revenues—because there wasn’t as much money being spent—the only way to do it was to reduce expenses.
THEY NEGOTIATE FOR A LIVING
The way they decided to do that, in many cases, if it wasn’t a direct modeling of what Walmart had done, it was at least a derivative of it. We wound up with very, very strong procurement organizations within many mid-to-large-sized companies. When you think about it, these are people who have had the best consultants in the world; there are scores, if not hundreds, of programs that they take. They spend 40, 50, 60, 70 hours a week negotiating with suppliers and vendors.
AND GET PAID FOR IT
Their bonuses are based upon how much they can squeeze a vendor, even one with whom they’ve been loyal for 10 or 15 years. They also take incumbents out to bid and will do whatever is required in order to be able to squeeze that extra dollar out of a supplier.
This has put us all (all of us on that sales side) in a much, much more challenging position. Why? The average salesperson might spend 2% to 5% of their time negotiating on an average sale, but the people that they’re up against spend 100% of their time negotiating.
There are some pretty sharp firms out there now that have very effective approaches to what they’re calling strategic negotiation. So it’s not put a salesperson through a two-hour or even a half-a-day or even a full-day negotiation class once every 10 years. They build the negotiation process into the sales process so that the very first interaction that a salesperson has with his customer is a negotiation.
By the time the salesperson, on behalf of his or her selling company, reaches what would have been previously recognized as the time for negotiation—when a contract is about to be signed—that company is in a much more advantageous position than they would’ve been if they had waited until that last moment.
That’s a steep challenge for sales professionals, and it’s just one example of the way things have changed in the past decade.
HOW TO SELL IN THIS ENVIRONMENT?
How do you sell in this new, flattened, highly fluid, educated environment? Some of this is Sales 101, but either it never gets taught or it never really sinks in. It’s understanding how your customers buy. What are their:
It may not be buying from your competitor. It may be, in the case of software (I come out of the software space myself) the biggest competitor is building it in-house.
We in sales have to understand how our buyers buy and then adapt our selling process, our messaging, our tools, everything that we do to a great extent, to match how our customers buy.
Some salespeople from the old school say:
“Well, you’re giving up, Dave. You have to assert control. You’re the one who has to tell them. You have to hold things back from them and make them come to you and all that.”
To the extent that you have any control over how your customer buys, it’s only going to be when you prove that you understand what it is they’re looking for and how they’re going to procure it. Once you build a sense of trust, then they will listen to you, but not until then. I think that’s a big point that a lot of sellers are missing these days.
HOW SHOULD SALESPEOPLE EDUCATE THEMSELVES TO COMPETE?
A salesperson, especially a beginning salesperson, if they can understand it’s all about:
That’s when the real sale begins in earnest. Not until then.
But if a salesperson is trying to sell based upon:
… that may get them some attention, which is incredibly important, but it’s going to be very difficult to actually get the sale.
When the salesperson makes the transition to proactive business person, that’s when they start to win business in the complex sale.
Remember, you’re not selling things to companies because they want to buy things—because they like things. We do that as consumers. We want a new barbecue grill. I’m buying my first motorcycle in a couple of weeks, and I’m excited about it. We as consumers like to buy things for the emotional kick of it very often. But businesses don’t buy things just for the sake of buying; they buy products or services from vendors or suppliers because they want to improve their business. They want to either increase revenues, decrease expenses, both, or somehow mitigate risks.
HOW DO WINNERS SELL?
The number-one thing great salespeople and sales teams do is sell value. To do that, you have to be able to quantify value for the prospective customer.
If you subscribe to the approach I suggest, and that it’s about salespeople being businesspeople and companies buying from you when you can clearly and compellingly explain how your product or service will impact their business, the obvious hurdle is:
This is a little bit like the chicken and the egg. The reason is that many companies will not share with you their internals about how an inventory department is running—or a logistics organization, or a marketing organization or whoever you’re selling into. They will certainly not do that early on.
If you have not sold, installed and implemented your product or service in other companies, if this is the first company your firm has ever gone to, you don’t have anything to fall back upon and use as a proof-of-value statement. But assuming that you’re not new, most organizations can go back to existing customers and benchmark in reverse a retroactive or retrograde benchmark.
That is …
“Can we get some idea of where you guys were before we arrived on the scene? Let’s take a look at where you are now. Let’s measure the improvement in X different functional areas and put some numerical dollars, hopefully, but if not, a relative percent value on it. By the way, can I use your company’s name and your name, Mr. or Ms. CFO, in my marketing efforts?”
Now, it may be one out of 10 companies that will let you do that—maybe three out of 10. We’ve been very lucky at ESR. Most everybody we have ever done a project for is willing to share that information. So now I benchmark our performance within different industries. If I’m selling into different industries like transportation, technology, professional services or medical equipment, then for each of those industries, I can either communicate it in a very clear, concise and compelling way or document in writing the kind of improvement that our customers have enjoyed with the use or implementation of our products.
If I say:
“Joe Kayser at MegaMind Company used our product for five years. When he first used it, he was able to achieve pitifully poor results that he thought at the time were great. But after using it for five years, he’s at this new, vastly improved level. You can talk to Joe if you would like to, and once you’ve done that, I would like to sit down with you and talk about the potential improvement your organization may get from my product or service.”
It’s gathering that information and having it at your fingertips and in your back pocket that often opens up the doors to allow your customer to share information with you.
It’s also the way that this quantified business-value sale is modeled.
Is it easy?
If it were, it wouldn’t be sales.
And the Complex Sale is sales on steroids.
You can find top-performing sales teams in every industry. And just as many, if not more, that are so dysfunctional, their results hinge largely on lucky breaks. What separates the two? The most important factors that determine sales-function success are the degree of formality, organization and discipline in the sales organization.
When Sales operates the same way Finance, Production or Engineering runs, very often sales teams excel. But most sales departments don’t run like other departments. They don’t have the same discipline, order and process. They don’t have the same measurement mechanisms, or the same degree of experienced, focused leadership. That’s why something like 40 percent of salespeople in the U.S. didn’t make quota last year, and the average tenure of a Sales vice president in 2006 was only 21 months.
That’s not a big surprise when you consider that most sales executives and managers rise through the ranks. Take your typical right-brained, gut-feel, talk-my-way-out-of-anything salesperson, who’s surpassed quota for many years, and the next logical step is to promote him or her to sales manager.
Sales managers who fit this profile may be very intelligent, but because they are right-brained, they aren’t very comfortable with methods, process, order or discipline. What’s more, they may not come to the party with management experience or a solid grounding in management methods. And now they are running your sales force.
Guess what happens: They continue to sell, negotiate and close deals for their teams, but their organizations can’t scale, because the sales managers become the bottleneck. They have to negotiate every deal, because their ego is involved, and they don’t know how to delegate. And only so many deals can happen on a monthly or quarterly basis – because they shoehorn themselves one way or another into every sales opportunity.
And that’s the best case! In the worst case, the best salespeople see that they’re not getting the support they need, that the sales function is being run in a seat-of-the-pants manner, and nothing is optimized. They don’t get the help they need from elsewhere in the organization — Engineering, Finance, or especially Marketing — and vote with their feet.
There is a better way. If you want to optimize your company’s sales organization, here are three ways to strengthen your team.
1. Hire people with the right genes
Responsibility for the bottleneck manager really goes one level higher. CEOs, COOs and general managers seem to repeat the same pattern, year after year: hiring one ineffective sales vice president after another. You need to break out of that cycle, and resist the temptation to hire that bright, personable individual because they are so darn good at selling themselves. I know it’s hard, because top-notch salespeople usually come on strong and have great interview skills.
That means Step one is to have a very strong understanding of the skills and traits a sales vice president or sales manager needs to bring to the table. If you hire someone who doesn’t have a sense of discipline, and an innate tendency to stick to the process, you are asking for trouble. Think twice before you hire or promote people with great sales track records whose previous five jobs lasted 21 months each. That usually means their ability to sell the CEO on hiring them is much better than their ability to actually get the job done.
The real trick is finding someone who has the right stuff as a salesperson, along with the skills and traits required to be a top sales executive or team leader. You need a whole skill set beyond great presentation skills or competitive drive. As a manager, you need conflict-resolution skills, management skills and the ability to motivate.
One CEO I am working with just had the kind of “Aha!” moment I am talking about. He said, “I will not hire another salesperson that doesn’t plan things out in detail. I don’t want someone who decides to go to California and jumps in the car and heads toward the sunset because that’s west. I want someone who will stop to figure out how far it is, what stops to make, and whether the oil needs to be changed. Someone whose brain is wired to think about it and put a plan together.”
2. Focus on planning and process
To get a feeling for whether or not your sales function “needs work,” seek out the person responsible for an important new deal. Then ask, “Show me your plan. How are you going to win this piece of business for the company?”
If that person can’t produce a single sheet of paper, or even verbalize a plan designed to be communicated to the other people on their team, then that person is selling by the seat of their pants — and being managed by the same type of person.
In sharp contrast, if you have an institutionalized, well-founded set of processes in place, and a set of tools salespeople have been trained to use every day to get their jobs done, the company is likely to be successful at selling. Questions to ask:
* Do salespeople know their roles, and what they should be doing at every step along the way in a sales campaign to land an important piece of business?
* Can they predict in advance when they will need resources, such as Engineering or R&D support?
* Do they know, based on internal processes you have in place, what kind of customers buy, and in what way?
* Do they know what your competitors are up to?
Of course, the more complex a sale is, the more essential organization and discipline become. I’ve worked with sales teams running $200 million deals that take 18 to 24 months to close, with two-dozen influencers or approvers to keep track of. You cannot keep all of this in your head, Willy Loman style. People move around and resign, and the needs of companies change. You need to count on others and have people who stay on top of things and communicate what’s going on.
Order, process and discipline make all the difference. Here’s an example: One of the most rewarding experiences I’ve had was working with a group of engineers who had never sold anything before. As part of a company restructuring, they became responsible for bringing in business. As it turned out, their sales results were unbelievable — off the charts.
These engineers didn’t have much charisma, or the personality-plus you find in the classic right-brained salesperson. But we gave them a 20-step process to follow, and they followed it to the letter, in a disciplined way — and became successful. They’re never going to get as good at people skills as someone who’s purely right-brained, but that left-brain ability is a critical piece of success. Step two is all about focusing on planning and process. You need people with the ability to imagine a critical path or think like a chess player. What’s going to happen five moves out?
3. Consider the way your customers buy
After reading this, you might be tempted to kick your entire sales force to the curb and start over. That’s not terribly realistic. But as part of an overall operational and behavioral “makeover,” it may be appropriate to rethink your approach from the customer’s point of view.
The latest best practice, especially when it comes to such complex sales situations as high technology or capital equipment, is to assemble sales teams with different — but complementary — roles and responsibilities. Typically, a lead person responsible for the engagement gets either the credit (or the blame). That team leader acts like a “virtual CEO” with technical advisors, a customer-service specialist and even a finance person on the team. The leader, like a project manager, brings all those resources together to apply maximum leverage to that sales opportunity.
Such teams work best when tailored to the way customers in your industry buy or behave and the relationship they are used to having with vendors. In some industries, a team-based approach, with multiple client touch-points, may not work. But it can pay off handsomely in terms of increasing the overall book of business.
For example, if customers in your industry have a reputation for very tough negotiations, with negotiators “in the trenches” 40 hours a week, you cannot send in a lone salesperson who only spends five hours a month negotiating. Similarly, if your customers expect fast answers to technical questions, they won’t want to wait while you “touch base with the home office.” Having technical advisors who respond quickly can win business.
Of course, this adds a whole other dimension to the management and organization of your sales force, including staffing. I can visualize a CEO objecting to the idea of hiring four specialists to replace one, but those four people may sell eight times the business, because they focus on what they do best. What’s more, that success will feed on itself — especially when you have people in place who are comfortable with the process, and get part of the classic sales “rush” from seeing a plan come together.