Home / Posts tagged "Value"

Dude, You’re Gonna Need More Than 15 Minutes3

By Tibor Shanto – tibor.shanto@sellbetter.ca

Sales people are constantly working at communicating value to their buyers, especially in the early stages of the cycle, lead gen to prospecting and engaging the buyer to where they could complete an effective Discovery process. After sellers have done all the work involved in getting to the point where they can engage with a buyer, I am always surprised at how easily they are willing to undermine it, and risk their opportunity by saying something completely unnecessary, and serves only to sooth their nerves.

The expression that does this most is “I just need 15 minutes of your time” or “A quick 15 minutes”. Both are stupid and useless, the second is one I never did get, how is a “quick 15 minutes” different than 15 minutes, don’t all minutes have 60 seconds, it is just the quality of the content that seems to make some minutes last a lifetime.

I know why it is used, generally comes down to two things, both can be dealt with more intelligently and effectively. First is the popular notion that if you can get 15 minutes, and do well, they’ll give you an encore and you can stretch it out; I guess we all think we can do a good job. On the other hand I used to work for a VP of Sales who managed his calendar down to the minute, busy guy. He would ask you how long you needed, and would book you in for that time, if you said 15 minutes, he would end the meeting right at 15 minutes. He wasn’t rude, he had to get to his next scheduled meeting, if you couldn’t live up to the expectation I set, it was your issue, not his, you had to deal with it, not him.

Which brings us to the first contradiction, most decision makers have more than what to do in a day, how realistic is that they don’t have other meetings behind your, or other things that require their time and attention. Yes, no doubt we have all had instances where we were able to extend 15 minutes in to 45 or even 60 minutes, but an occasional anomaly does not make for a sound strategy.

The other issue with this approach is that you are in fact misleading the prospect before you have even met them. Think about it, do you really want to start things off by lying to the prospective buyer? Any way you rationalize it, that is exactly what you are doing, not a good foundation for a trust based relationship.

The second reason sales people do this is linked to the first, and just as weak. Specifically they are trying to minimize the apparent impact on the buyer, trying to make it “easy” on them, “Your time will not be wasted”, is the implication. But unless you are selling a coffee service or window cleaning, how much real or tangible value can you effectively communicate. More so, when you are selling what you would call a “solution”, where information has to be exchanged, 15 minutes is not going to get you there, you can pretend all you want, you are going to pitch, worse, you are going to ‘speed pitch’.

Some will tell me, “I can at least get things started”, sure then comeback and continue, with a bit of recapping, you are costing you and the buyer more time. By asking for 15 minutes you are undermining your so called “value proposition”. What the prospect hears is that this is so basic and unimportant, what they are asking themselves is as follows: “we’re going to make real progress in 15, can’t be that important or unique, maybe it can wait, or I can delegate it to someone who deals with unimportant things.”

Think about it, assuming things get started, small talk, while you assume they checked out your web site, you have to validate; if they did, you still need to create context, if they didn’t you have to do a bit more than that. From here, you need to at least go through the motions of gather information or executing a Discovery of facts and objective. Ah, look at that time is up! I remember someone trying to sell me an ad in local board of trade directory, they said they just need 15 minutes, I pointed out to him that he will need to ask me some questions, I will certainly have some for him, so let’s get real, how much time will we really need, he was honest enough to come across with a real time frame.

What’s worse, it is usually the seller who brings time in to the equation, not the prospect, again communicating a lack of confidence in their offering, or their ability to sell, or both. Just stop this juvenile practice, and sell.

Now I know that there times when you will be asked by a prospect how much time you need; in my case I gear my first meetings to about an hour, I am the one that gets antsy after 50 minutes. But rather than saying “one hour”, I pause, and ask, “how long can you give me?” They usually come back and say “is an hour enough?” Touch down!

But assuming they ask again, I just say “I usually need about 30 minutes for Discovery, I assume you’ll have some questions, so 40 minutes is safe.” If I feel they have a sense of humor, I add “any longer than that I take as interest on your part.”

I do have people who say “I can give you 30 minutes.” Great I can work with that; if they offer 15 minutes, I say no, I know what is going to happen, it is not a good use of my time, my most important resource. Either we can find a mutually better time, or on to the next one. If you have lots of prospects, this is not an issue, if you only have one or two, you may have to settle for the scraps that a quick 15 minutes represent.

What’s in Your Pipeline?
Tibor Shanto

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The Customer is Not Always Right2

By Tibor Shanto – tibor.shanto@sellbetter.ca

“A lot of times, people don’t know what they want until you show it to them.” ~ Steve Jobs, Business Week, May 12, 1998 (thanks to Karri Flatla)

Some myths in sales need to be retired, at or near the top of the list is the commonly accepted notion that the customer is always right. If they were, we as sales professionals would have no value beyond that of an order taker. I know there are a lot of order takers out there pretending to be sales people, but that does not make it right. I am not joking, about the order takers, or the fact all to often, customers are not right, especially when it comes to specific solutions or means to achieving their objectives; and the only thing that is worse is the fact that some sales professionals do not push back against this myth.

Yes it is true that it is their decision, and they can buy what they like, but in the end most buyers do want to buy the right thing for their company, at times they just don’t know any better. I have always maintained that one of the core values a good (great) sales person bring to a deal is their vast knowledge of a specific areas of practice. We are if nothing else, conduits to the best practices out there. I regularly meet sales leaders in companies both big and small, from Fortune 100 companies to the most innovative start ups. I see more things that work, and more that don’t than any single one of my customers. That is not a value judgment, but the reality of what I do, a key component of my value. Just as you see all kinds of companies using your service or product, some using it in the most brilliant ways, ways you never conceived, getting more out of it than you may have imagined before; while others use with less spark than it take to light a match.

As a sales professional it is your job to point out where the buyer’s thinking is wrong, and will likely lead to a bad or inefficient outcome. Sometimes this easy, buyers genuinely open to suggestions, but just as often they may not appear to be at first, especially when the buyer has done minimal research and comes with preconceptions. This is potential trap for sellers have in a “be found” environment, where sellers are told that the buyer is some 60% through the cycle, and are informed, before they engage with a seller. Well who is to say that the information they gathered is accurate, complete or really applicable. A successful sales professional has first hand knowledge of what works, what doesn’t and more importantly why. It is still true, even in our peer sourcing social selling age that information is not knowledge.

Now how you counter the buyer’s view is key, there is no need to be heavy handed, pompous or impatient; you can have, and should, demonstrate conviction, especially when you do bring real knowledge to play. Some talk a lot and worry about trust and relationship, I would argue challenging the buyer’s view for legitimate reasons you can back with experience, and will deliver better results based on their objectives, will in fact build trust and enhance a relationship when the client comes out ahead as a result of your challenge and input.

Executed with skill, the buyer will feel and be right with the proper purchase, even if they were wrong at the outset.

What’s in Your Pipeline
Tibor Shanto

A couple of weeks ago I lost an opportunity I feel I should have won, and as you have read here in the past, you need to invest the time to understand why deals turn out the way they do. To do that I asked a couple of people I know, also involved in sales training to sit down to conduct the review, in essence to play the role of the manager, and keep me honest. The goal is to learn if the deal was winnable, if so what could I have done differently. If not winnable, are there any trends we can glean that we need to incorporate into future sales; or what can we learn that will help us recognize deals that are not going to happen earlier, so we can move on faster.

I was taken aback when the first question one of my peers asked was: “do you think you would have won had you priced it lower?”

Wow, what an uninspiring start. I guess if I gave it away free I would be busy five days a week, but my kids would starve. I looked at her hoping she would continue, and asked her why she started there, especially when I had shared with her and the other fellow involved the form/tool I use of our reviews, exploring many factors beyond price. What worried me even more is that this person was involved in working with sales teams, and this was top of mind here, what is top of mind when they are out in field.

The importance of reviewing both deals you win and lose, is understanding the trends behind the decisions. Every time a buyer does not buy from you is not a failure on your part, and the reviews will help you delineate between the two. There are buyers who will not pay for the value of your offering regardless of how well you communicated. It is important to understand which end of the communication failed. If it was you, then you need to work to change how you do things, and reviews will help. But if it was the buyer’s failure to understand/appreciate the value when you did everything you had to, it is better to know that and why, and how to recognize it moving forward. Communication is two directional, and it could well be that the buyer does not see the value or does not want to pay for it, yes they are cheap. And none of want cheap customers. The quicker you can spot one vs. the other, the quicker you can decide who is worth your time and resources, or which opportunities you can abandon early.*

Fine Print – the above is predicated on having a healthy pipeline of real opportunities, it is a lot easier to walk away from a bad thing knowing there are other opportunities to work on, than to walk away from the only thing left in your pipe.

Price is easy, in fact it is addictive; sellers need to be value competitive, not price competitive. Much better to get your clients addicted to your value/quality, then you becoming addicted to discounting. As with anything addictive, you run the risk of not just selling at a lower price, but for the wrong reasons. At first you figure you hey what’s a 3% discount. Once that is comfortable, you need a bigger fix. When you come up to the next resistance, you hesitantly try one more point, then another, and you are at 5%. You figure on $100,000 deal, say 8% commission, going to $95,000 will only impact you by $400, but could be the margin for your company. Remember that next time you wonder about investment in product development, marketing, resources, and all the things the $5,000 you gave away could buy.

What’s in Your Pipeline?
Tibor Shanto

Two heated discussions this week put focus on an interesting question for sales organizations; based on where you land the issue, and where you are in the sales organization, the topics could have profound implications.

First was a rep trying to answer a simple question, “why do people buy from your company?” His response was “me, they buy because of me”. I couldn’t resist asking, if he were to leave, how much of his base would follow him? After rolling his eyes, he offered up “about half”, I ignored his VP’s suppressed laughter, and suggested that half his base was not buying because of him.

Later his VP told me that their experience to date, which has been that even the most aggressive reps only managed to pinch 15% -20% of their account base in the three months after departing, and about a third of that was back by the end of the year. Further, he told me that he has made the mistake in the past of hiring reps from the competition in the hope that they would bring their “book” with them, and found that they realized about the same rate of success, about 20% of the reps base followed, while 80% stayed where they were. This is very much in line with what I see in the market.

While there is no doubt that contractual obligations make up for some of this, the reality is that most customers deal with the organization not with the individual rep. The invoice, product and service are delivered by the entire company not the superman rep.

This very much brings into question the need for some sales people to have do everything for their clients, rather than letting those in their company tasked and usually more qualified and trained to do those things, usually doing better. I remember reading some time ago that a survey of the purchasing manager professionals, showing that they would rather deal with reps who can demonstrate their ability to marshal the full resources of their companies, over a superman sales rep; a deep bench is worth more than a rock star rep to those with the money, authority and decision power.

The same question could be put to many sales manager, what would the impact on their team and their sales be if they were fired tomorrow, or let’s be more genteel, if they won the lottery and left. If the answer is not much, than what is your worth or value to the organization.

The goal here is not to minimize the value a rep or manager can bring, in fact the opposite. Think about how YOU can drive specific value for your customers if you are a rep or a manager? As always, we need to take value out of the abstract and define it with teeth: here is my working definition of value, and specific steps you can take to deliver them for your client and your organization!

Couple that with a complete approach to client coverage, what I call the 4D – Four Deep approach, and you are well on your way to delivering tangible value to both your customer and organization.

In the end, if you are delivering value to your clients, you will realize revenue and value for your organization, and a healthy commission for yourself, and there won’t be a need for you to leave or risk whether your base will follow, or not.

What’s in Your Pipeline?
Tibor Shanto

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My course is GAP Selling – Leveraging Process and Execution, is coming up next Thursday, August 2, at 4:00 pm Eastern. GAP Selling – Looks at hoe to deliver value. Almost every sales conversation starts or ends with the concept of value; at the same time there are as many different understandings and definitions of value as there are sellers and buyers. Without a clear and actionable definition of value, many conversations between buyers and sellers are less than effective, and do not help create a buy. Starting with that definition of value, participants will then learn the five step process to leveraging that value right through the sale, from the initial engagement to winning the client. The overarching goal of the process is to focus on the buyer’s objectives, and delivering specific means of helping the achieve those objectives. Steps include: 1) Identifying and validating buyer’s objectives 2) Understanding why buyers really buy 3) Why Buyers buy and don’t buy from you and your company 4) Converting the above to impact questions and quality conversation 5) A structured follow-through approach to maximize impact and progress Participants will learn how to use the above to create alignment with the buyer, their objectives and buying process.

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What’s in Your Pipeline?
Tibor Shanto

We all know the challenge price presents in today’s B2B selling environment. We all love to talk ‘value’, but often fail to define to ourselves before we engage with a buyer; then fail to define it with/for our buyers, and leave them wanting once “we’ve delivered our value proposition”. Our job as sales people is not to propose value, but to deliver it, and ensure that we and our companies are fully compensated for that value, which once again takes us back price.

While we would all prefer not to deal with price, it seems almost unavoidable, almost a cultural must when it comes to buying/selling, and hey we do it when we are spending the cash. This leaves you only with the option of how to mitigate or minimize the negotiation dance; and you have a couple of choices as to how to do that best.

The first, and most popular, is a method I call Build Up and Defend. This is where you pack your offering, pitch, and proposal with “tons of value”, and throw it at the client with everything you got, and then defend that “value”. We’ve seen this in different formats, but the goal is to wow the buyer, and persuade them that they are getting everything they had defined as being required, and more. While this works, and there is nothing wrong or dishonest about it, it just seems like so much redundant overkill, which draws on unnecessary resources on the part of the seller, and usually overwhelms the buyer, thus introducing risk to the sale. This usually ends with the buyer looking for the “real value” in the form of price concessions, and the seller either conceding because they need to make quota, or better sellers taking things out of the mix in order to balance to make concessions equitable.

An alternative to the above is to be more methodical, and leverage the Discovery stage, and the information exchange to build value with the buyer. You do this by a) Building Better Questions, focusing in on only the most important and relevant factors for the buyer, rather than every “potential” irrelevant data point, whether it has value or not. With the base value points identified, you then use that foundation to drill down, and further establishing where the buyer will find value in our deliverable based on their specific requirements, a process called GAP Selling.

From a pricing standpoint, this allows you to build from that base and bid the price up with every element of value you and the buyer mutually establish and agree on. There is no rule that states price discussion has to start at a point and then be ratcheted down. Done right, you can build value with the buyer, on their terms, and at the same time bid up the price, not down.

What’s in Your Pipeline?
Tibor Shanto

A couple of weeks back, I was asked about value, and provided a firm definition for value. The definition is step one, it provides the direction for the seller, next sellers need to learn how to surface it and leverage it for the mutual benefit of the buyer and the seller. As a follow up I was asked:

So working with that definition of value, that is removing obstacles that stand between the buyer and their objectives, how does a sales person know or determine the buyers’ objectives?

It takes a bit of practice but here we go:

httpvh://youtu.be/7FISRA6Wuxw

Next Step

Develop a process for capturing specific client attributes
Learn to key issues that have driven clients to engage and buy
Develop questions, after all, based on the above you know the answers

What’s in Your Pipeline?
Tibor Shanto

Sales like other groups have certain common words, reference points and symbols. They use them to communicate facts and concepts both to the tribe and to their buyers. The challenge is that often these words or symbols are often quiet subjective and open to broad interpretation, unless the seller defines the term. If they don’t which is usually the case, it opens the door to miscommunications, and missed sales.

Take the word value, I challenge you read one brochure or sit through a sales meeting where “value” is not a central theme. The problem is that unless you have a clear definition of value, clear to both you and the buyer, and more importantly means the same to both of you, you could end up talking about something other than what the buyer considers to be of value.

The solution, defining value, mutually agreeing to it, and moving you and the buyer towards attaining it.

Here is a clear and universally working definition of value:

httpvh://youtu.be/uS9SVrR0CHA

Next Step

Spend time understanding buyers’ objectives
Build the sale around those objectives
Demonstrate value, don’t just talk about it

What’s in Your Pipeline?
Tibor Shanto

On Monday I posted about assumptions and the pitfalls of assuming that the buyer has the same understanding of a subject you do, or that they mean the same thing you do when they use a specific word.

One word that is used a lot in sales, probably over used, is Value. As with many things that are relative and open to interpretation, you need to manage the situation to ensure the right outcome.

httpvh://youtu.be/6eiiu1CZThI

Let us know if you saw value in that, know what I mean!

What’s in Your Pipeline?
Tibor Shanto

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Price, the eternal boogieman for sales people is and always will be an issue in sales. It is up to the sales professional to manage and deal with it, their ability to do that will not only determine their own personal success, but by extension that of their company.

Let’s state up front that we are not trying to make light of the issue, price is a critical factor in any purchase, even more the case in uncertain economic times accentuated by shrinking budgets, delayed decisions, and competitors resorting to discounting to win deals.

As we all know discounting is a cancer, especially when everyone “one downs” the other and while the customers win at first blush, everyone loses at the end. Now you may ask why and how customers lose with a lower price point? Well contrary to a popular view pushed by some sales pundits, companies do not fail due to lack of revenues, but more accurately due to a lack of profits. Discounted deals result in revenues, but often show little or no profits or worse at times a loss on specific deals. That impacts sellers in the immediate sense, and as profits are reduced across a sector due to discounting, things such as R&D, service, quality, reinvestment decline with it to maintain profits. This eventually trickles down to the customer and impacts them over time. It may be easy to blame the customers for this type situation, but that simple view may help sellers rationalize their actions, but it is the seller’s job to manage the sale, which includes price.

Consider two facts; first, while price is a big factor, it can be over come. A few years ago I attended a workshop on negotiating; they showed that decisions generally break down as follows:

Price – 40%
Product quality and fit – 20%
Relationship/Rapport between buyer and seller - 20%
Internal Factors (politics, priorities, etc.) - 20%

While price is the largest component, it can be trumped. Even if your product is at the high end of the price range, you can still over come the discounters. If you score 10 points on the Internal Factors; 15 points for Relationship; 18 points for Product Quality: and 20 points for Price, still puts you ahead of those who come up short on everything but price.

Second, buyers are sensitivity to “realistic” prices. People understand when something is too cheap to be real and will pass on buying below that level. The same is true for the high end, when something may be great, score top marks for all factors but is just priced way too high, and again no buy.

Now I know you are sitting there, and rightly so, saying “this is all well and good but my clients are still demanding price concessions, so how do I stop the pounding?” I would be. Well to start, and on a very tactical level, concessions are a step up from discounting, concession implies the client acknowledges the value and fit, the question becomes what each party can do, give or give up to get the deal done.

On a strategic level, you have a lot more options, especially if you are willing to work. One of the most important aspects of sales is that you as the seller need to set and control the flow, this is a must, period. Now before you pop a vein or go puritan on me, I said control the FLOW not the prospect or the client. Someone has to drive. Someone has to lead. This may as well be you.

With that, you can begin to frame the discussion around value and returns, rather than price or outlay. Here we are not talking about some abstract notion of value, but specific elements with teeth.

Having said that there is not an absolute method, but there are several models and methodologies that can be applied. At Renbor we look to the financial world, specifically to value oriented investors. When you look at some of the factors they consider, many can be repurposed for communicating and selling value. Based on the buyer’s reality you would accentuate different elements, be they break even time, inherent risks, total cost of ownership or ROI, and more.

Presented in context ROI is a much better foundation for a sales than price. A 10% return on $10,000 product is still better than a 5% loss on a comparable product priced at $6,500.

As is often the case in sales, it really comes down to understanding the market, the client, having a plan, the questions to execute the plan, and then doing it.

What’s in Your Pipeline?

Tibor Shanto, Principal with Renbor Sales Solutions Inc., and find out how he has helped dozens of organization to fill their pipeline with real prospects – - driving real revenue.

For more information on helping your team sell better, write to: info@sellbetter.ca, or call 416 671-3555. You can also follow Renbor on Twitter http://twitter.com/renbor.

Sep 15th, 2009 Attitude, General, Interactive Selling, Price, Proactivity, Questions, Sales Technique, Value

execution, how to sell better, Planning, Price, Value

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