Sales Archives | Page 2 of 2

04 Mar 2015

Sticky Post By Matt Hottle Posted in Sales, Strategy With No Comments Permalink

Now We’re Hacking Customers?

Sticky Post By Matt Hottle On March 4, 2015 With No Comments

“Disruption”

“Game-changer”

“Hack”

“Bleeding edge”

“Thought leaders”

These are some of the currently ubiquitous terms revolving through business intelligentsia. Much like “synergy” in the 1990’s, it amuses me when words are invented or adapted to define something that was well-defined long ago. For the sake of brevity, I’m only going to pick on one of these terms.

“Hack.”

More specifically, I loath the addition of this word in front of actual business processes or endeavors to suggest a work-around or short-cut. Google any of the terms “Marketing Hacks” or “Sales Hacks,” or even “Life Hacks” and you will see pages of competing theories on the best way to get customers or people to behave in a certain way. Admittedly, those few theories rooted in actual science contain some pearls on how to engage audiences with ever-decreasing attention spans and who consume a wider variety of information sources than ever before.

The evolution of the “hacking” movement is devolving into something more unseemly. Take this quote from a website you can easily find through any search engine. This company, who uses the term “hack” in their business name, sells a service to find email addresses of people that are otherwise hidden in their social web profiles:

“Save time and sell more! Uncover your sales prospect’s previously hidden email addresses while searching Social Profiles.”

So you should invade a potential customer’s perceived privacy so you can make your quota? Genius. I’m sure your prospective customer wants to get unsolicited sales email on their “wholelottafun123” Facebook email address.

If you have to trick someone into interacting with you, how long is it going to be before that reputation is synonymous with your brand? Are you able to build a long term and meaningful relationship with your customers or are you are hoping to fool them into doing business with you?

I know this makes me seem like a dinosaur in today’s digital marketing universe and there are plenty of folks using the term “hack” that have noble intentions. I do celebrate the push to innovate how businesses prospect and find connections but I caution this slippery slope where the term “hack” is being co-opted.

What’s worse is this really often hides a more serious problem- your product or salespeople (or both) are terrible. Just pumping more and more unwitting prospects into a bad sales process or to incompetent salespeople is a quick route to failure.

It is interesting, at least to me, there aren’t any relevant search results for “Value Hacking.” After all, its value we should be creating for and promoting to our customers- not deceptive ways of getting them to engage with us. Maybe there aren’t any relevant posts because value is something that can’t be hacked. Your customers determine what value you are bringing through their experience with you and your product. Those customer who get real value from you and your product will come back for more and they will help bring you more customers.

05 Feb 2015

Sticky Post By Matt Hottle Posted in Sales With No Comments Permalink

Sales is Not a Dirty Word

Sticky Post By Matt Hottle On February 5, 2015 With No Comments

Over the last 10 years “Sales” has been renamed “Marketing” or “Business Development.” I recently heard about an organization calling their salespeople “Revenue Engineers.”

Baloney…

It is true that “sales” as a function has changed and some organizations have not recognized that yet. They are still sending their salespeople on what I call “Pitch and Prays” where the sales process is still just a numbers game and anything that moves gets pitched. Or even worse, they are asking their sales folks to makes hundreds of contacts through email or phone calls which is the equivalent of driving at night without lights. That leaves sales pros and customers describing those experiences in dirty words that would make George Carlin blush.

While we spend significant mental energy renaming sales functions, we aren’t supporting or developing sales leadership like we should. According the Harvard Business Review:

“To put a finer point on it, of the 479 U.S. business programs accredited by the Association to Advance Collegiate Schools of Business, only 101 have a sales curriculum, and a mere 15 offer either an MBA in sales or some sort of sales-oriented graduate curriculum. Sales may be vital to businesses, but of the 350,000 students a year who earn bachelor’s degrees in business from American universities, and the 170,000 who earn MBAs, only a tiny fraction have been taught anything about it.”

But, there are organizations that are starting to realign the value of salespeople with their customers. This is demonstrated when sales people focus on facilitating the purchase for a customer. Every organization has a different process for purchasing products or services and many of those processes can be difficult or time intensive. Successful salespeople are realizing this and creating value by navigating those processes with or even for potential customers by preparing documentation, gathering required information or even writing RFPs for prospective clients.

If you want to see this practice in action, visit an Ethan Allen retail location. Those folks are tremendous at facilitating customers’ purchases.

Most customers already have the relevant information about your product, your competitors’ products, pricing differences and has probably called a colleague or two before you get to actually engage them. You need to add real value to your sales process by thinking about how you can facilitate purchases more than selling something.

The difference in winning new business can be as much about “how” the sales process works and the customer’s experience buying from your salespeople. This is especially true in highly competitive markets or in commoditized products.

When an organization does not recognize and act on this shift in a sales function’s value to their customers, there may be a very dirty word used to describe their performance- failing.

Teaching Sales– Harvard Business Review

25 Nov 2014

Sticky Post By Matt Hottle Posted in Sales With No Comments Permalink

The Poor Economics of “Numbers Game” Selling

Sticky Post By Matt Hottle On November 25, 2014 With No Comments

For almost any growing business, the pursuit of top line revenue is a constant and everlasting pressure on the entire business. While your salespeople feel that pressure acutely, the entire business understands and appreciates the need to always have money coming in the door. This pressure can create behaviors that are productive and behaviors that are detrimental.

Productive behaviors can include increased teamwork in the face of a customer deliverable while detrimental behaviors can lead to heavy discounting at the end of a measurement period to hit a sales goal.

The pressure to generate revenue can also lead to economically irrational behavior. One of the most common examples of this irrational behavior is the propensity to chase every opportunity regardless of its quality or potential to actually turn into revenue. The phrase “sales is a numbers game” has been repeated by so many sales “experts” that people tend to believe it. That phrase isn’t completely wrong- only 90% wrong.

You do need to make contacts and that is a “numbers game.” When dealing with commodity products or transactional selling, numbers play a huge role in success but to distill effective selling down to nothing more than a dial-a-thon is both simplistic and costly. If a prospective lead isn’t qualified, you can waste significant time and resources and generate little revenue in return.

Historically, managers have measured salespeople on two main data points; the actual revenue generated (sold) and the top of their pipeline (how many contacts they have made). They should be obsessing over conversion percentage- how many sales they generate from a set number of potential customers.

Every prospective customer carries a cost to your organization. Those costs can be in travel, entertainment, company resources and opportunity cost. To create a simple illustration, let’s assume every prospective customer costs $1,000 to get to the point of making a decision whether or not to buy. Also, each customer is worth $10,000 if they actually buy. If your sales department makes 10 sales presentations per month and converts three of them into actual sales. The cost to the organization for these overtures is $10,000 and the sales are worth $30,000.

What if you were able to make the same three sales but only conduct seven sales presentations? The cost of the presentations to the company would by $7,000 but the sales would still be worth $30,000. The effective profitability of the closed sales increases from $20,000 to $23,000- or 15%. If this pattern repeated itself for the entire year, the total profitability advantage would be $36,000.

That improved profitability can be the difference in needing 5 salespeople instead of 6 and all the associated resources to support that extra full-time position. It can also help you rationalize your sales effectiveness and capacity.

Despite this economic reality, company managers continue to push the “numbers game,” without thinking about how conversion percentages drive increased profitability.

10 Nov 2014

Sticky Post By Matt Hottle Posted in Sales With No Comments Permalink

Kick the RFP Habit

Sticky Post By Matt Hottle On November 10, 2014 With No Comments

People are often shocked to hear I stopped participating in electronic RFPs for new business about two years ago. If it is unsolicited or where I don’t have access to the human beings making the decisions, I won’t participate. Occasionally, I’m forced to participate in one because of an existing business relationship.

It took a pretty direct conversation with Frank Visgatis, Co-Founder of CustomerCentric Selling, to realize how much time I had wasted chasing unsolicited RFPs.

I may represent the most qualified firm for the work but in the effort companies have made to rationalize vendors with electronic procurement, forced stack rankings and onerous vendor qualifications, they have also eliminated your ability to inject specific and meaningful expertise into the buying process.

Consider your own procurement process or one you have just participated in as a vendor.

What percentage of the questions were around “facts” about the business; number of employees, total revenue, sustainability efforts, OSHA compliance, etc? Based on the last few I participated in, this was more than 90% of the information requested. Who is checking all these facts for validity anyway?

How many questions revolved around “proof?” Proving expertise, capability and consistency are key to selecting partners. Proof is usually demonstrated or experienced. I have yet to see a software program or standardized form glean “proof” effectively.

Secondly, what is your win percentage in these RFPs? No padding… no excuses… what is the real number? Chances are your batting average is pretty poor. Now ask yourself how much time each RFP consumes of your organization’s time. In my own case, it was around 12 hours of sales, 2 hours of operations and 1 hour of accounting/ legal for an average and efficient RFP.

Lastly, what was your opportunity cost- the cost of chasing an unqualified RFP instead of opportunities where you could actually interact with your potential client?

I actually spent a layover figuring this out on the back of an envelope. Once I totaled it all up, it came out to $2,200 per hour.

Assuming 12 hours per RFP, that translates into $26,400. If you really want to give yourself the cold sweats, multiply that by the number of RFPs you “participated” in last year. Chances are that grand total is a gut-wrenching number.

Take heart though, there are ways to qualify your opportunities and improve your conversion percentage. At Redhawk Consulting, we work with clients that have successful sales operations but are straining their organizations to hit their numbers. In future posts, I will discuss some ways to qualify opportunities. If you have some of your own techniques to share, send them to me at matt.hottle@redhawkresults.com.