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Sales Lessons From The Hot Tub

by Karen Jackson | on Apr 12, 2016 | 12 Comments

Our hot tub died in late February. An untimely death given we were still in the clutches of winter, but my family enjoyed 20 soothing years from it so I couldn’t be terribly annoyed.

“Karen, why are you telling me this story?” you ask. Because of what happened when I went to replace it! There are important sales lessons to be learned. Take a few moments to consider the buyer journey….

I immediately called the store that sold us the tub 20 years ago and that has been servicing it all along. After determining that the repair cost was 50% of the original price, it seemed prudent to purchase a new one, so I asked for a quote to replace it. The sales person emailed me a quote and brochure for the model that was effectively the 20 years later version of the original tub. Then there was silence – no follow up call or email.

Without a conversation or email exchange, he’d left me alone to ruminate…. “Do I really want the same thing? If I’m going to fork out the cash, ought I think a bit grander in terms of features and functions? Yes, this brand was reliable for 20 years. But it was pretty basic in terms of features, with a minimal number of jets and few customizable settings. Surely other options exist.”

But the salesperson hadn’t asked me any questions about my needs or desires, didn’t probe about my priorities or my budget parameters. He already “knew” me and offered a solution based on my need profile of 20 years ago. He also took literally my request for a “replacement” hot tub.

Like a watching a B-quality horror movie, I hope you’re already recognizing the signs of disaster for the salesperson.

Much had changed about me as a buyer in 20 years: My body aches more after skiing – hell, after sitting; I have more discretionary income; I now spend more on services and products that bring me peace, joy or time. Equally important, when I bought my first hot tub, I’d just finished building the house it resides at. I was financially stretched after the investment and went for basic, basic, basic on the hot tub. My needs and desires today are entirely different.

Left alone, I decided to research alternatives, and walked into another local provider. Hot tubs are a luxury item and this salesperson understood that completely. (That’s why 20 years later, they’re referred to as “spas.”) “Tell me about….” He said. And then he began to explore my pain points, desires, ideal outcome. He asked me questions, offered product choices that mapped to what he’d heard from me, and relayed a couple of purchase stories about clients similar to my profile. An hour later I walked out with a purchase order and he held my deposit.

It’s a B2C story but it applies to B2B purchasing decisions. In B2B, while the “B” represents business, business buyers are real people with emotional needs and personal agendas. Did you spot the mistakes made by the sales person? These are the important takeaways for your sales people:

• Beware of making assumptions about current customers, especially when selling products / services that are not high frequency transactions. You may think you know them, but things change and they won’t always share.
• Always probe for what has changed in the buyer’s universe since their last purchase.
• Don’t assume their request is what they really need or want; probe for pain points, desires and ideal outcomes just as one would for a new customer.
• Cost is rarely the leading decision factor, unless one is competing in a hyper commoditized space.
• Use closing questions to clearly understand concerns or objections, potential new competition, and the vision match between your solution and the customer’s desired result.
• Gain commitments for next steps. Always.
• Never leave a customer alone with a proposal for an extended period of time. There’s no firm rule on timeline, as scenarios differ based on complexity of solution, but anything longer than 1 week is a mistake.
• Follow up is an important element of the sales cycle, both to retain control of the process and make the buyer feel cared for. If you don’t pay appropriate attention to the customer, another vendor will.

If this seems basic to you, reevaluate. I witness sales people for multi-million dollar companies make these mistakes regularly. The good news is that there’s a solution. The development of sales process and play-books that leverage best practices, combined with training and coaching of the sales team, ensures that your company won’t lose the next hot tub – sorry, “spa” – sale.

P.S. I love my new spa. 🙂

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Investment or Expense?

by Karen Jackson | on Aug 07, 2012 | No Comments

It’s a tough smallbiz climate right now. The economy is sputtering; the media is stoking recession fears; uncertainty about the impact of the presidential election is giving everyone dyspepsia; and accessing capital is as hard as ever. So, many CEO’s are clenching their fists around the cash on their balance sheets and not spending money. One might argue that hunkering down with cash is the only prudent behavior under these circumstances.

I’d argue it’s not. The trouble is, when we get tight-fisted with our cash, we stop making investments. When we stop making investments, our companies stop growing. The old adage “it takes money to make money” is as relevant as ever. Investing in people, processes, and systems is both essential to growth and to not being left in the dust by the competition. And the reality is many of those investments can’t be afforded through monthly cash flow.

So how does a CEO decide whether s/he can really afford to let go of some of that cash on the balance sheet? I’ve found it revealing to run both big and small financial decisions through this 2 question test:

1)      Is the expenditure truly an expense or is it actually an investment?

2)      Can we afford NOT to spend the money?

Here are a few examples, with my answers were I sitting in the CEO’s seat.

Example 1:  The company’s marketing materials are junk and it will cost real dollars to hire a marketing consultant to rehabilitate.

1)  It’s an investment 2) We can’t NOT spend the money

Example 2: The sales force is on the road a lot but can’t easily access their corporate systems because they don’t have wireless cards for their computers. The cost to purchase card / plan is out of budget.

1)      It’s an investment  2) We can’t NOT spend the money

Example 3: There’s an opportunity to purchase furniture at a good price from the company down the hall that’s moving. It’s in great shape, clearly an upgrade, and would make our office more attractive.

1)      It’s an expense  2) We CAN not spend the money.

See where I’m headed? I’m suggesting that CEO’s upend their view of expenses – a very now-based way of thinking – and reconsider them relative to the future.  It takes some practice, and sometimes the answers seem counterintuitive, as in Example #2. Clearly wireless cards are an expense, yes? For me, no. They’re investments  – investments in efficiency, real-time information, and employee morale. We can’t NOT have any of those things, so I would write the check.

The tendency to over-scrutinize the P & L for money saving opportunities is fear based rather than growth based. By reframing an expenditure as an investment vs. an expense, and questioning not whether the businesses can afford something but whether it can afford NOT to have / do something, the answers become focused on a future of growth.  By all means, keep a leash on expenses – get downright stingy if you want – but routinely make investments. After all, if you don’t believe enough in your business to take those risks, why should your customers believe in you?

How do you make sure you’re not too tight fisted with your cash? What litmus tests do you use when deciding how to spend?  We’d like to hear your ideas.

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B2B Sales Management Mistakes That Might Prove Fatal

by Karen Jackson | on Jul 10, 2012 | 4 Comments

Small business B2B sales management is a tough, tough task. (It’s not so easy in big business either.  According to consulting firm Sales Benchmark Index, the average tenure of a new sales leader is just 19 months.) In part, it’s tough because small businesses don’t typically have an experienced sales manager. Often that task is left to the CEO, whose expertise lies in their product or service subject matter, not in sales.

Whether you’re the sales manager or the CEO wearing that hat reluctantly, the challenge is surmountable. Get outside help, subscribe to sales management blogs, and don’t make any of these 9 mistakes:

1.    Hire The Wrong Title.  This may seem obvious but it’s a common set-up for failure. Desiring to lure a big producer, you hire someone with the title “VP of Sales” even though it’s a direct sales role. I’ve yet to see a VP of Sales worth their salt go back to carrying a bag – unless they’re getting a big equity position. (Even then, they may no longer have the stomach for it.) They’ll collect their check from you and wait for permission to hire, you guessed it, a sales person. Instead, get clear about your needs, what makes your opportunity compelling, and go find a compatible person for your organization. He or she is out there; you don’t have to settle.

2.    Fail to Define a Go-to-Market Sales Plan.  “Go sell something” is a poor directive but it’s a pretty standard marching order. Writing a clear sales plan is hard, but essential, work. How else will your reps clearly understand their target markets, ideal customer profile, value proposition, positioning? How can they create smart tactics when they don’t clearly understand the goal? How will you decide where their energy is best spent, which opportunities to seize and which to pass on? Without a clearly defined plan, you’re guaranteed inconsistency at best; chaos at worst.

3.    Ignore Sales Process.  Without process companies fail to capitalize on best practices or manage their resources in the most productive way. By understanding the customer’s buying cycles and creating a related sales cycle with stage specific activities and milestones, you’re able to analyze sales activities and outcomes, take actions that influence buyer behavior, and uncover where sales people need additional support and training. Without process, forget about a realistic forecast; you’re left with lots of wishing and hoping.

4.    Neglect Metrics or Accountability Structures.  The adage “what gets measured gets managed” couldn’t be more true in sales. First identify key performance indicators, then create sales metrics that better influence outcomes, motivate individuals, and make forecasting more predictable. Include your team in developing these to gain buy-in. They’ll understand that by managing to those metrics their success is far more likely than without them. It’s not baby-sitting, it’s management. Big difference.

5.    Treat Your Reps The Same.  The sales manager is a coach. Like any team, the players need different levels and type of attention. Does s/he need help with skills, mind-set, time-management?  You won’t know unless you meet them where they are as individuals, and respond accordingly. Applying the same management techniques to everyone will not create equality; it will create frustration and missed opportunities to grow your team members. Keith Rosen’s book Coaching Salepeople Into Sales Champions offers some excellent guidance.

6.    Substitute Your Comp Plan for Management.  Slashing pay for a poor performer doesn’t solve your performance problem. It simply lures you into a false sense that the individual isn’t costing you too much. You’re kidding yourself. They’re costing you dearly through unexploited territory, wasted energy by support staff, and team morale. If you can’t manage a rep to better performance, release them. Quickly.

7.    Saddle Your Reps with Non-Sales Activities.  Every position has a certain amount of administrative work, but it’s mind-boggling how much non-sales activity small business reps get saddled with. If you want reps to sell, give them time to do so. Look at your processes and identify what activities could be off-loaded to a less skilled, lower paid headcount.

8.    Skimp on Tools.  Are your reps on the road but they’ve no access to your servers through their mobile devices? Are they travelling regularly but don’t have a wireless card to access 3G networks when no wi-fi is available? Are Post-Its, lists, and disconnected spreadsheets substituting for a CRM tool? Don’t think of these items as nice-to-haves. They are keys to productivity, sanity and morale, which make them investments, not expenses.

9.    Undervalue Continuous Recruiting.  It’s really hard to hire good sales reps, and it doesn’t get easier when the pressure is on to fill a spot. When territory is open there’s a tendency for management to settle on a sub-optimal candidate. Be disciplined to continually interview and recruit for the role. Put the word out with business partners and maintain an on-going search through LinkedIn and other social media platforms. Target individuals who work in your industry and court them. They may not be ready to move today, but when something changes, they’ll call you first. Equally important, you’ll learn tons about what the competition is doing and what others perceive as risks / opportunities in the market.

B2B sales management is hard, but essential in an organization’s ability to drive revenue. Without customers, there’s no reason for a company to exist. I can’t think of a better motivation to improve sales management skills.

Please share mistakes you’ve made, suffered, or witnessed so we all can learn.

 

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Keys to Hiring Great Sales Talent

by Karen Jackson | on Mar 21, 2012 | 6 Comments

Small business owners frequently lament about their difficulty in hiring great sales talent. It’s not easy to do, in part because a sales person is likeable, easy to be with, and their interview is probably their best sales job. Most small business CEO’s don’t have sales roots themselves, making it harder to know what they’re looking for and how to probe. continue reading »

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It’s About The Experience

by Karen Jackson | on Mar 05, 2012 | 4 Comments

These four words from Howard Schultz of Starbuck’s [SBUX] fame should keep CEO’s up at night. OK, leaders of those rare companies with a one-of-a-kind product and a significant barrier to entry can go back to sleep. Everyone else better stay up until they understand how important those words are to the health of their company. continue reading »

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6 Places To Look When Your Business is Stuck

by Karen Jackson | on Feb 21, 2012 | 8 Comments

Each day I have the privilege of working with business owners who’ve decided they want something more. Something more than that feeling like they’re running on a treadmill, expending a ton of energy, muscling their way through the hard parts, but not exactly arriving at the destination in mind. And it really is a privilege, because it’s not easy for CEO’s to ask for help, to set aside ego, to reveal that perhaps we don’t have all the answers, or have gotten too close to the issues to see them objectively. I know. I’ve been there myself, and confess that there were days I’d gladly swap jobs with the UPS guy. continue reading »

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What Top Sales Producers Know (And So Should You)

by Karen Jackson | on Feb 02, 2012 | No Comments

In January I wrote a blog about the Secrets of Successful Sales Leaders. Lots of people liked it, but several asked if I’d follow up and identify the traits of successful sales people. Some wanted to know so they could improve themselves or their teams. Many others said, after failed attempts at hiring quality sales people, they’d like to start getting it right. continue reading »

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