Leveraging Price Ratio To Win The Right Deals1

By Tibor Shanto - tibor.shanto@sellbetter.ca

Rpl round

Pricing continues to be a key factor in winning or losing sales opportunities, and while few vendors take pride in being the low cost provider, at times it seems they set out to be just that, or they take few steps to avoid it being forced on them. There are times when companies consciously use price as a temporary strategy to gain market share, or directly impact a competitor. Rarely have I met a VP of Sales who says:

“We’ve decided to be the cheapest on the block, so long as we don’t go broke, I want you to teach my guys how to get to the price discussion quickly, demonstrate just enough value to justify that price, and then let our ops team manage diminished expectations.”

I say rarely, because I have met leaders who seem to work like that, but don’t articulate that way. I have met consultants who suggest “win the business on price, and then keep it on service.” The challenge is that few can recoup the concessions and get the price back up to where it should be and are stuck at that lower price band, and corresponding margins. Of course during the next vendor selection round they may have to lower the cost just to keep the account, or replace it, when someone undercuts them. Either way expectations have been set.

No matter what many will tell you, it is more often about buyer’s perception about the relationship (as in relative to, not relationship as in the soft-sell mantra) between price and expectations, and not price and deliverables. Promise great – but then deliver only good, and you could suffer; promise good and deliver good, you meet expectations. This is why “under promise – over deliver”, still works.

The fact that it is more about expectations rather than deliverables is actually a good thing for those sellers willing to sell value rather than price. In the past I have shared the ”Actionable Definition” of Value; it centers the conversation, the sale, on the buyer’s objectives, which gives one the opportunity to leverage the give and take between price, value and expectations.

One of the first things we need to understand and establish during the Discovery stage of the sale, is the buyer’s specific ratio of value/expectations to price; think of it as their level of conviction. Here is how it works, buyers are looking for maximum price concessions while giving up the least amount of value. If they can get the seller to give up one unit of price, while at the same time they give up less than a unit of value in return, then they perceive themselves to be ahead, and the ratio is less than one. Based on experience, this tends to be the case the majority of time. If the reduction of value is equal to the price reduction then it is one-to-one.

What’s interesting is that it is this same ratio that has led some value driven vendors lose deals they feel they should win against lower cost providers, the ratio works in the lower cost provider’s favour. They are willing to give up “the right little bit” of service for a greater savings. The key for you is to understand not only what those element are, but where they rank for the buyer. This will vary for each buyer, which why focusing on objective is a must, and not taking a cookie cutter “solutions” or the usual consultative approach, which will leave them short and disappointed every time.

If all that wasn’t enough to manage and deal with, you also need to clearly understand your competitors, their offering and cost structure. Incremental improvements in process and technology, can change the landscape, competitors may be in a position to deliver the same level of service as before but a reduced cost, and when that occurs, they can leverage the ratio in a way that creates a win-win with buyer, and a lose-lose for you.
As with most things in sales, once you incorporate this line of thinking into your repertoire, you can also use it to disqualify buyers who are purely price driven and will suck every concession out of you without reciprocating in any way. While everyone is trying to economize, smart companies and worthy partners understand that a weakened supplier is not good for anyone in the long run. Without profits, R&D, innovation and other value elements will suffer and by extension so will the buyer’s business.

The price dance is not going away anytime soon, but understanding core blocks of price, and how it relates to the buyer’s expectations and more importantly their objectives will help you build value based relationships that will last long enough for you to get a good payback on what it cost you to acquire the client, and work with buyers who understand that profits are important throughout the ecosystem.

What’s in Your Pipeline?
Tibor Shanto 

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Sales Come Flooding If You Let Them – Sales eXchange 2240

By Tibor Shanto - tibor.shanto@sellbetter.ca

Truth

No one argues the need to listen in sales, as I have written about here before what you listen for is key. Sometimes it comes down to the question you ask; other time to how well you listen, eliminating distractions and not just listening to the client, but hearing what they are saying.

And while many talk about Active listening, they practice Selective listening; looking for cues to pitch and push their agenda over the buyer’s. Don’t get me wrong, the seller’s primary function is to sell, drive revenue for their company, while delivering value for both the buyer and their company. Key here being mutual value, not ours over the buyer’s, but that’s exactly where many sellers seem to end up.

There is just bad skills and manners, which can be corrected. Where it is really fatal is when the problem is rooted in the intent.

I have been working with a rep who needs help in being a better listener, I have been on a few meetings with the rep over the last couple of weeks, and I swear the rep would make more money if they got $10 for every time they didn’t let the buyer finish a sentence, then the actual commission that may result from the sale (which may not happen because they didn’t shut up long enough to let it happen).

The funny thing is that if you ask the right question, which this rep often did, a lot of truth and selling opportunities will present themselves, but you have to let. Back to intent, if you want to hear how you may maximize your opportunity with buyers, you have to let them tell you, and they will. But if your intent is to sell them something, a very specific something, there is no room for the truth or the buyer’s reality, it may interfere with what you want to sell. So many reps, like the one in question prevent thing from flowing.

The other way this rep and others prevent the truth from flooding, and creating sales, is by failing to get to the root of issues buyers put on the table. Many are good at asking initial questions, but then take the buyer’s initial response at face value and move on. The reality is that people, all of us, “say things”, especially if we have been asked similar questions by a number of sellers in a short span of time. Many responses are a lot like sound bites, and reps settle for that, others take the time to examine the issue from different angles, looking for ways to a) understand what the buyer is really saying; b) to see how they may educate the buyer to better address the buyer’s objectives. Of course the risk is that they may not have the depth for that discussion; their intent is to sell product, not to help clients achieve objectives. And it takes a bit more work than they are willing to do, again, intent; it is easier to cut the prospect off and limit the discussion to those selective facts that you feel you need to make the sale.

Asking the type of questions that get the facts to come flooding, and using that to create clients not only differentiates us from other sellers, but leads to more sales and longer client life cycles than any form of selective listening.

What’s in Your Pipeline?
Tibor Shanto

Yield Per Call – Best Measure (#video)0

By Tibor Shanto - tibor.shanto@sellbetter.ca

TV Head

We are all familiar with the concept of yield per call, based on revenue targets, how much do we need to generate per hour of selling, this assumes you are productively selling every available hour.

The real test however is the perceived value your prospect got from the call, was it time well spent, will it yield a return for them, without a resounding yes, you risk not realising your yield per call.

The question you need to answer is would the buyer pay for the hour with you, or how much would they pay for that hour with you, based on that, it needs to meet their yield per call, which is likely measured and based on an entirely different value scale. Take a look:

What’s in Your Pipeline?
Tibor Shanto

Two Webinars This Week You Don’t Want To Miss0

Webinar

Coming up tomorrow and Thursday I will be presenting two webinars dealing with two critical aspects of prospecting.

Tomorrow, Wednesday October 23Time – Prospecting – And Getting the Jump On BothI’ll be talking to the importance of sourcing the right leads, information about the individual and their companies, and securing the right and accurate contact information so you can engage with the right person for the right conversation.  Along with the good folks at eGrabber, I will present on: “Time – Prospecting – And Getting the Jump On Both“, looking at the combination of cutting edge tools available from eGrabber to help you make prospecting more time efficient and productive.  Time is the only unrenewable resource you have, the better you use it the more success you will have.  Improve your rate of connecting with the right decision makers, and you will increase prospects, sales and profits.  We will be sharing best practices and everyday techniques for improved prospecting.

Click here for more detail and registration

 

Then on Thursday, October 24 at 2:00 pm Eastern time - Cold Calling: How to Handle the Objectionworking again with the DiscoverOrg team, I will be presenting the follow up to the highly successful webinar last month on the fundamentals of effective Cold Calling, this time we will go deeper on how to handle and manage the most common objections faced while prospecting.  The goal is to provide attendees with common sense and proven practices for handling objections and initiating more conversations with buyers, and help them become customers.  Most sellers tell me: “Get me infront of the right buyer, and I will close them”.  Problem is overcoming those early awkward objection to you call, and move to selling.

Click here for more detail and registration

See You On-Line!

Are you a Persuader or Mediator? – Sales eXchange 2220

By Tibor Shanto - tibor.shanto@sellbetter.ca

Mediate

I don’t see why anyone in sales should take offence to being called a persuader, it is after all our job, to persuade people that yes it is time to buy, and buy from us. I wear the label of persuader much more proudly than one of being a mediator, a label many in sales would rather wear.

Based on a discussion I had recently with two experienced sales people who were trying to persuade me (sell me), on the fact that what they do is much more “mediate” between the buyer and their company. Mediate, really? Not sure that is what sales people are supposed to do, and as I asked I got the usual, intellectually trap-laden, politically correct snippet about relationships, and how it is the role of the sales person to look after the needs of the “client in the mix”. Hmm!?!

I know it may just be semantics, but words count for a lot in sales, especially in setting mind set and attitudes, as those two things go straight to how you behave, and it is the resulting action that counts in sales. And because of that you will get very different results if you set out to persuade or if you set out to mediate.

When we look at the Merriam-Webster definition of mediate we find it defined as:

: to work with opposing sides in an argument or dispute in order to get an agreement (US)
: to get (something, such as a settlement or agreement) by working with opposing sides in a dispute
: to have an effect or influence in causing (something) to happen

And mediator as:

: one that mediates; especially : one that mediates between parties at variance

Right off the top there is a disconnect, on the one hand we hear about “relationships” and “trust”, yet we see our role as that of the UN in the negotiations between North and South Korea.

Further I am not sure why there is a negative perception of “persuading”, it does not have to imply that you are pulling something over the buyer, it just means:

: to cause (someone) to do something by asking, arguing, or giving reasons
: to cause (someone) to believe something

You can do that, and still maintain or strengthen a relationship, especially if the buyer gains by taking action you persuaded them to take. If the strength of you belief in your product is so strong and compelling, that the buyer is moved to act, how is that worse than mediating, where there is an assumption of adversaries, one being your employer.

The same people who seem to lean towards any word other than persuasion for what they do a s sales people, are the same who are happy to interchange the word negotiate with appease, and in the process of appeasing, mediate away the last bit of margin left in the deal, and subsequent purchases that buyer makes.

The sad reality is that if these same sales people only put as much effort into persuading their buyers, as they do me in labeling their role, they would mediate less, and sell more. Besides, if you are dealing with buyer who require mediation, and see your company as the “opposing” side, you should fire those prospects, and prospect for new ones that see you as much as a partner as you see them.

What’s in Your Pipeline?
Tibor Shanto

After and Before2

By Tibor Shanto - tibor.shanto@sellbetter.ca

Note pad

In a business that emphasizes relationship as much as sales does, it is sometimes interesting to see the degree to which sales people, and buyers, tend to ignore, overlook and at times avoid some basic components of human interactions, and way to enhance those interactions and the impact of that on business and sales outcomes.

Michael Jordan once said:

“…You have to monitor your fundamentals constantly, because the only thing that changes will be your attention to them”

This statement is as true in sales as it is in basketball. Sometime those fundamentals seem simple and inconsequential, but in the end it is often those little things that make the difference. Remember that your product is often indistinguishable from those of your competitor’s, so the way YOU sell may often be the differentiator that clinches the deal. So let’s focus on two seemingly small things, that when executed consistently and well, after and before meetings with buyers, will win you deals, no matter other factors. And while these may seem small, do them and then judge the results.

After:

After every meeting you should send a note, what most will call a thank you note, but done right it can be so much more.

Few send thank you notes anymore, I know that when I am the prospect, if I get a thank you note, it is so rare, I take notice, and mentally give the sender bonus points, points that may take them ahead of the other vendors. A hand written note, will just blow their mind. But more than a thank you note, it is an opportunity for you to recap what you took away from the meeting, action items everyone agreed to, and most important, what you propose the Next Step to be.

If you and the buyer synch on all of these points, then the note will just cement things in their mind, along with you being the vendor who helped them do that. If you took away different understandings, it is to your advantage to find that out now, and make any course adjustments you need to make. Better to correct things now than go into the next meeting with different ideas; if you can’t correct them, better to find out now than after investing more time and resources.

As well by introducing what you think the next step should be, you get them thinking about it, and again, if they don’t disagree, you are on the right path, but if not, you can deal with it now, not later.

Before:

About a business day ahead of the next meeting, send in a n agenda, nothing deep or heavy, three or five points (odd numbered lists are better), AND, what you would propose as the Next Step, if things unfold according to the agenda. As above, if things are on track, you can go in with some sense of confidence that you are on the right path. If not, better to know well in advance of the meeting than at the end when it may be too late to do anything about it. Same goes for the Next Step, if they can’t live with your suggestion they’ll speak up, and while it may not be what you had planned, better again to know early than after the fact.

While neither may appear to be all that and more, when you first read them, execute them consistently and it won’t be long before you attribute deals directly to executing these steps.

What’s in Your Pipeline?
Tibor Shanto  

It's time to get Bricked!

Thanksgiving Eh? – Sales eXchange 2210

By Tibor Shanto - tibor.shanto@sellbetter.ca

Thanksgiving

Short and sweet today, being Thanksgiving in Canada, need to focus on some non-sales things, but felt it was worth extending that in to the post today. As sales people, we really do have a lot to give thanks for, not the least of which is the options presented when the job is done right.

Unlike some professions, sales does deliver that unique combination of unlimited financial rewards, personal growth and development, but most importantly, the opportunity to be almost completely in control of your day, and your destiny. Of course with that freedom and control to do as we see fit based on the specifics of each sale, comes accountability. Some are thankful for this, others see it as a burden, a necessary evil that comes with the ability to the master of your destiny and financial state.

Of course if you do not see sales as a profession for realising a creative outlet that delivers more financial rewards as you get more creative, then maybe you don’t like the accountability. And that’s OK, there are plenty of positions in the corporate world where one can thrive, even contribute, without having to be accountable.

What other profession delivers different challenges every day, often variations on previous themes, but different in the way they unfold, requiring us to look at something familiar in different ways every time a new chapter unfolds. While it may not be unique, but what other profession rewards you to the degree sales does when you choose to learn from the past while embracing the future, rather than rewarding you for living in the past, and avoiding the future.

I often speak to sales people stuck with the outlook of someone imprisoned in a job defined by routine and repletion. Some are seeking to break out and grow, they are a pleasure to work with, because they challenge you to help them improve, as much as they challenge themselves to change and improve. But there those that resist change, and with every effort offered to help them change, they dig and entrench themselves further in the status quo. Just like some buyers. There is a clue.

Well which ever camp you are in, I trust you are thankful for what you have, your station in life, and your evolution in the never-ending journey of sales improvement and success; here is to a happy Thanksgiving!

BTW, for my American friends, just bookmark this piece and read it again on November 28.

What’s in Your Pipeline?
Tibor Shanto 

Metrics and Numbers – Sales eXchange 2201

By Tibor Shanto - tibor.shanto@sellbetter.ca

Increased sales

I have the pleasure and opportunity to “sales” with a lot of people, some in sales themselves, some management, and some who don’t sell but have firm unfounded opinions they like to share or yell. One area they all seem to have opinions on is whether sales is a numbers game or not. The familiar and popular line is that it is not a numbers game, this is quickly followed by something along the lines that “it is about quality, not quantity”; while I get the sentiment, I am not sure that the two are that linked.

What’s interesting is that many in leadership positions, be they executives or pundits, who in an effort to be ultra-modern adopt the “sales is not a numbers game” posture, are at the same time big proponents of “Metrics” and some form of KPI’s, both of which are good when applied the right way. But the question remains, are metrics not numbers?

While there are many similar definitions of business metrics, I like this one:

A business metric is a raw measurement of a business process. It’s important to remember that metrics are a means to an end, not an end unto themselves. Measuring a metric is not always enough – you need to use that metric to guide business decisions and to ensure your business is on the right track. (Klipfolio.com)

I like it because it does root things in numbers, how else can you measure. It ties to process, and having a sales process is a clear way to bring the numbers to life in the form of action and execution, and the use of metrics in guiding performance and decisions. By extension, this drives accountability, and bundled together these elements dictate and shape you sales culture. In the end, it allows for the use of numbers as a core component of strategy and execution, but not at the exclusion of other important elements that make for a winning and evolving sales culture.

The dark side of taking the sales is a numbers game stance to far can often be found in KPI’s and how they impact sales. Many organizations will have KPI’s for key activities their reps have to execute. For example eight meeting a week, with at least three being with new prospects. Without a qualitative layer to the KPI, it will serve little in helping the company achieve it intent. What you often get is exactly what you asked for, eight meetings, three with new people, and not one worth the time it took one to secure the meetings.

KPI’s should be rounded out in ways that ties the indicator to results, not the activity alone. This will allow for coaching opportunities that are directly tied to daily activities and results. If a rep has difficulty hitting wither side of that, it is a great opportunity to coach and focus on the qualitative aspect of the KPI. And here is where both camps can converge, quality of execution, tied to the numbers and results involved.

In the end, even the qualitative aspect of things will be measured in some empirical way, and most importantly, the result, be that sales, clients acquired or most importantly profits, are all measured in numbers or tied to metrics in a direct way.

What’s in Your Pipeline?
Tibor Shanto  

Exceeding Your Sales Expectations0

By Tibor Shanto - tibor.shanto@sellbetter.ca

Solar Scape

Many adhere to the saying that goes “perception is reality”, no arguing that, but for sales professionals the mantra needs to be “Expectations are reality”. Regular sales people let their perceptions dictate their reality, and are often limited by their own perceptions, those of their buyers’, and of course the perceptions they glean from the pundits’. As a result they often settle for things they perceive, rather than achieving the things they can do given the right expectations.

I was working with a reps last week, helping him be more effective on the phone in the process of setting appointments. While he got the words and the flow of the approach and talk track down quickly, he was still not getting traction, especially when compared to others. What he was lacking was conviction and the dynamics that come with that.

Those dynamics, nuances in attitude and delivery, can make the difference between another prospecting call, and an appointment. The better the call, the more appointments; the more choice you have in your pipeline and your success. One specific is the attitude you have about the outcome, which directly influenced by what you expect to happen on and as a result of the call.

His expectations were all focused on the negative less than fun side of the call. He expected to get voice mail rather than a live person, he expected to be greeted by the admin or what sales people like to call gate keepers, (talk about setting the battle lines with labels). If those hurdles didn’t pop up, he expected the target to be irritated, not interested, and almost pissed for getting the call. If he got past that, he expected objections by the boat load, and finally he expected that there was little he could say to take away the objections and get the appointment.

I felt for him, he was piling up all these limiting obstacles, and he hadn’t even looked at the phone, no wonder it seemed like a five ton dumbbell. I suggested he had reset his expectations. “To what” he asked, “what are your expectations when you make calls?”

“I expect to get the appointment”

Those words are not magic, I still need to deliver an effective introduction, and while I get objections like the rest, I expect to deal with them and get past them. My expectations are focused on the outcome, the appointment, the opportunity in the pipeline, the sales, the commission and the meal at my favourite restaurant, I can taste that vindaloo now. If you expect to meet and be defeated by obstacles, then that is what you’ll get, and that will dictate your perception, and the reality of your effort.

Sure perception is reality, and if your perception is that you can’t do it, prospecting doesn’t work, then that will be your reality. If you expect to get the appointment, expect to get the next step, expect to win the deal, then that will inform your preparation, actions, reactions and outcomes. Those who set expectations, and settle for nothing less than what they expect can go further and overcome more hurdles more effectively than those guided by perceptions. What are your expectations today?

What’s in Your Pipeline?
Tibor Shanto 

How Do You Know You’ve Had a Good Week?0

By Tibor Shanto - tibor.shanto@sellbetter.ca

Ahhhhh

The other day I was coaching a rep who was not buying into any sort of planning at all. More than fly by the seat of his pants, you could call this guy a “spiritual seller”, it seem to be his only guide and benchmark. No matter what he was presented with by his manager or I that in any way related to structure, he quickly set aside with a counter argument; an argument which usually impressing him more than me.

I finally asked a question for which he did not have an instant answer, one that seemed to make him think: “How do you know if you have had a good week?” Other than feeling good about himself, how would he know? There was little he could point to, and I guess he did want to have “good weeks”, because he became open to ideas.

As a first step we broke it down to three things:

Planning – Since “good” in the context of what we were looking at was a relative thing, without a clear plan there was no “relative” scale. Planning allows you to draw that line in the sand that goes from Point A, where you are now, and Point B, where you want to be at the end of the week. To ensure the exercise has merit, the plan needs to be directly tied to a specific objective, in this case sales goals. Specific results, and specific activities that move you towards near term and long term objectives. By making planning a constant rather than an event, you can accomplish a lot, in small steps, and continue to make improvements along the way.

Time – A plan is just a first step, it then has to be actualized, even with a simple activity based plan tied to goals, you need to commit to a time when you will actually complete key activities required to successfully achieve your plan. As they say hope is not a plan, but you have no hope if you run out of time before you complete those key activities. It’s all well and good to say that you will do this that and the other, but to avoid it just being talk, or just another thought swirling around in “the canyons of your mind”, you need to schedule it. Put specific activities in your calendar, and then ensure that you manage those activities within the allotted time.

Execution – Now that you have a plan, set time aside to do the activities required by the plan, you need to do it, sometimes the hardest but most rewarding part. As the saying goes, deciding to do something and doing it are two different things. You know that in sales it is all about Execution – Everything else is just Talk!

Taking these three simple steps, perhaps small steps at first, then building on the success will help you have one good week after another, the good quarters, and years to follow.

Have a good week!

What’s in Your Pipeline?
Tibor Shanto

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