How to Find the Value Gap

TwitterGoogle+LinkedInShare

The formula for calculating value is quite simply the benefit minus the cost of achieving or acquiring the benefit i.e. value + benefit – cost. So it is important that we always use rigorous questioning techniques to uncover as many needs as possible, for which we can offer benefit oriented solutions.

The more needs we can uncover, the more benefits we can deliver, the more benefits the greater the pay back, the greater the pay back the higher the value, the higher the value the better the chance to up sell and cross sell.

Questions will uncover needs – if they are there to be uncovered – however, it is one thing to uncover the need, it is another thing to prove that there is adequate pay back and value in fulfilling the needs.

Having uncovered the needs we must probe and find out as much as we can about those needs and the implications to the customer if they are not met or fulfilled.

What we are trying to establish is the difference between what the customer used to do and how he does it now. If we can establish this then the comparison between what they are presently doing and what they may be able to do based on our solution, will be easier to grasp. This is important, because the difference between them doing something and not doing it is the “value gap. We need to find value gaps that we can attach a price to, so that we can justify the benefit in terms of added value.

Let’s take an example:

Your support customer used to have a manual stock and inventory system. Using your database for an automated system has enabled them to increase shipments by 20% per day. With the shipments of goods totalling $10,000 per day, the value gap i.e. system or no system, is $2000 per day. If the system is down it would cost $200 to $400 in lost or delayed shipments per hour. Staying as they are or going for a support agreement that would reduce down time is the value gap opportunity. That gap is worth $200 to $400 per hour..

The best product at the best price does not always win the order; we have all been outsold by a competitive salesperson probably offering less of a solution and sometimes even at a higher price.

I do hope that we no longer think about features and benefits, buy rather value.

I can only repeat that the only five words that time-constrained key decision makers want to hear today are: “Save” “Gain” “Increase” Improve” and “Reduce” – these are, or should be, high value statements, but they must be proved!

The Don Quixote Approach To Opportunity Assessment

Emerging salespeople typically believe that all business is good business and to an extent, I can understand this viewpoint. If you are trying to make a name for yourself, being put under pressure by your sales manager to get “runs on the board” and earn the respect of the more experienced and successful members of the team, it is difficult to walk away from any opportunity if you believe you have the remotest chance of winning it.

However, it is essential that more seasoned professionals fully understand both the value and importance of rigorous objective qualification – not just at the front end, but right the way through the sales cycle. Qualification is a process, not a single event, and even internal and reactive salespeople should be fully skilled in asking a small number of basic questions regarding precise requirements, time scales, budget, competition, etc. before they are prepared to reveal their price and delivery.

As the value of the product, service or solution increases, the depth of the qualification should increase proportionally.

External salespeople have the opportunity to meet with prospective customers and it is far easier to extract information face to face than it is via the telephone. However, it is vital that some initial answers are elicited prior the that first exploratory meeting in order to ensure that the meeting will be worthwhile to both parties. With sales costs spiraling upwards and sales time becoming limited, considerable prudence is required on the part of the salesperson.

During that first meeting, a considerable amount of detail can and should be uncovered – e.g. background and history of the company, the key individuals, the composition of the DMU (Decision Making Unit) if there is one, timescales, budget, competition, current suppliers, buying criteria, etc.

Only by rigorous questioning will the salesperson be able to answer the following questions when they get back to the office:

  • Is there a requirement/need that my company can satisfy?
  • Is it winnable?
  • Do I want it?

The very best sales professionals will not pursue the opportunity, after proper objective analysis, if the answer to any of those questions is ‘No’. They will rather invest their precious selling time seeking out and closing opportunities that will provide a profitable return on that investment.

At the very highest selling levels – i.e. strategic “big-ticket” selling and marketing, clearly the sales cycle is much more protracted, complex and typically moves through four stages:

  • Rigorous opportunity assessment
  • Develop a strategy
  • Present the solution and re-assess the opportunity
  • Gain formal commitment, sign the order and develop

In Summary

Having a tilt at every windmill that presents itself is neither practical, nor profitable.

Qualification is a core competency that every professional salesperson should take on board as quickly as possible. Working to the maxim that “All business is good business” is unrealistic and totally erroneous. It takes just as long to work an unprofitable opportunity through the pipeline, only to lose it at the death, as it does a profitable one. The ability to determine which is which can have a huge impact on your ultimate success in a front-line sales role.

So What Exactly What Makes a Great Sales Coach?

For managers, developing others’ abilities is critical indeed, it’s the emotional competence most frequently found among those at the top of the field. This is a person-to-person art, and the effectiveness of counselling hinges on empathy and the ability to focus on our own feelings and share them.

Research suggests the best ‘coaches’ show a genuine personal interest in those they guide, and have empathy for and an understanding of their employees. Trust is crucial – when there is little trust in the coach, advice goes unheeded. This also happens when the coach is impersonal and cold, or the relationship seems too one-sided or self-serving. Coaches who show respect, trustworthiness, and empathy are the best.

One way to encourage people to perform better is to let others take the lead in setting their own goals rather than dictating the terms and manner of their development. This communicates the belief that employees have the capacity to be the pilot of their own destiny.

Another technique is to point to the problems without offering a solution: this implies the employees can find the solution themselves. And people hunger for feedback, yet too many managers, supervisors and executives are inept at giving it or are simply disinclined to provide any. Virtually everyone who has a superior is part of at least one vertical ‘couple’ in the workplace; every boss forms such a bond with each subordinate. Such vertical couples are a basic unit of organisational life.

Therein lays the blessing or the curse: This interdependence ties a subordinate and superior together in a way that can become highly charged. If both do well emotionally – if they form a relationship of trust and rapport, understanding and inspired effort – their performance will shine. But if things go emotionally awry, the relationship can become a nightmare and their performance a series of minor and major disasters. While vertical couples have the entire emotional overlay that power and compliance bring to a relationship, peer couples – our relationships with co-workers – have a parallel emotional component, something akin to the pleasures, jealousies and rivalries of siblings.

If there is anywhere emotional intelligence needs to enter an organization, it is at this most basic level. Building collaborative and fruitful relationships begins with the couples we are a part of at work.

Bringing emotional intelligence to a working relationship can pitch it towards the evolving, creative, mutually engaging end of the continuum; failing to do so heightens the risk of a downward drift towards rigidity, stalemate, and failure.

So How Do You Develop A First Class Sales Team?

Pick up a typical annual sales report and what words do you find? Verbs like analyze, forecast, plan, assess and schedule, are used in pursuit of organizations that are efficient, productive and predictable. What set of people are required? Obviously, people who are efficient, effective, proficient, competent, productive and co-operative.

But I believe we need to go beyond; we need to be inspired, motivated, creators, who are enthusiastic and able to consistently deliver against our key objectives. We should be developing individuals who are not afraid to challenge paradigms, who are prepared to go that extra yard in search of excellence and who understand that success is 80% attitude and only 20% aptitude.

For a group of people to remain consciously competent at optimum performance levels, they require frequent injections of stimulation, motivational guidance, prompting and directing, otherwise they can easily lapse into becoming unconsciously competent or worse, unconsciously incompetent.

The primary objective of a professional Sales Manager has to be:

To achieve consistently superior results through the performance of every key individual.”

Here is a quick “sanity check” for you as we head into Q2:

When thinking about your own sales force …

  • Do you understand their motivators – what is driving each one of them?
  • Do you have visibility of their numbers – year to date, forecast vs. required performance?
  • Activity levels – are they working hard and smart enough?
  • Engagement – are they talking to the right level in their prospects/accounts?
  • Messaging – are they capable of delivering an appropriate message at the right level?
  • Qualification – are they only spending time on deals where they can compete and ultimately that they can win?
  • Closing – are they constructing successful campaigns and closing business?

Good luck for Q2!

The Golden Egg(s) Nestling in Your Basket

From quite early on in our sales careers, we are encouraged to explore every sales opportunity that presents itself – in fact in some companies, they are brainwashed into believing that “all business is good business.” And of course, we/they do not challenge this fallacy, simply because we/they don’t know any better. We/they are on the first rung of the ladder.

We/they are anxious to make our mark, get “runs on the board” and impress our manager – even our colleagues. At this point in our careers, our naivety sustains us, and in some perverse way, insulates us from the harsh realities of the sales environment – but only momentarily.

Maybe all new sales professionals should memorize this statement: “Selling is the most exciting, the most invigorating and the most rewarding career in the world – if you are selling well

Gradually, as we ascend that sales success ladder, we experience a life-changing epiphany – well those of us that become successful do – and it dawns on us that actually, it takes just as long to progress an opportunity that has no chance of closing through the various funnels and pipelines, as it does a profitable and closable one. We even manage to work out that whilst we are spending so much time on unwinnable business, we are letting winnable business slip through our fingers, due to a lack of time and attention.

It isn’t rocket science, but our ability to determine which is which early in the sales/buying cycle, could ultimately decide just how far we progress up that aforementioned sales ladder, because be assured, the very best frontline sales professionals – the top 5% – always position themselves with the real decision-makers and avoid those without “approval power.” They are able to first identify and then access the formal decision making unit.

They are also able to readily identify and know how to deal with the four different buying influences present in every sale and they understand how to prevent sales from being sabotaged by an internal enemy. They insulate themselves by developing strong allies within.

Finally, they are able to recognize fail-safe signals that indicate when a sale is in jeopardy. This comes from experience, but also information supplied by their allies.

But, most important of all, they are rigorous in tracking account progress and are able to accurately forecast future sales because they use proven methodology, which allows them to realistically weight every opportunity in the pipeline.

So, do you think if you re-examined your pipeline today, and you had to wager your house on those opportunities that will really happen, you could do so? Or are you happy to continue playing the numbers game?

Do try to spot the “golden eggs” in your basket – and encourage them to hatch – it will be worth it, I promise you.

What Makes a Successful Sales Team?

An organization’s vision is a guiding image of success formed in terms of a huge goal. It is a description in words that conjures up a picture of the organization’s destination. A compelling vision will stretch expectations, aspirations, and performance. Without that powerful, attractive, valuable vision, why bother?

A mission statement communicates the essence of an organization to its stakeholders and customers, and failure to clearly state and communicate an organization’s mission can have harmful consequences around its purpose.

As Lewis Caroll, through the words of the Cheshire Cat in Alice in Wonderland says, “If you don’t know where you’re going, it doesn’t matter which way you go.”

Guiding principles are the consequence of a mission statement that are intended to inform or shape all subsequent decision-making, which also provides normative criteria allowing policy-makers to accept, reject or modify policy interventions and activities. They are a guiding set of ideas that are articulated, understood and supported by the organization’s workforce.

Values are beliefs which the organization’s workforce hold in common and endeavor to put into practice. The values guide their performance and the decisions that are taken. Ideally, an individual’s personal values will align with the spoken and unspoken values of the organization. By developing a written statement of the values of the organization, individuals have a chance to contribute to the articulation of these values, as well as to evaluate how well their personal values and motivation match those of the organization.

The “Human Capital Development Model,” created by Krauthammer International, is a logical process that can take top management concepts, and translate them into a context that has real meaning for staff at all levels.

The key to bringing this model to life is to answer the following questions:

  • Do my team understand the organization’s vision and how their role moves the organization closer to achieving it?
  • How can my sales team translate the organization’s mission into one that is relevant to them?
  • How does the organization’s guiding principles impact on the day-to-day responsibilities of sales people?
  • Which of the organization’s values does my sales team relate to?
  • How can we interpret these values so they become compelling for each sales person?

An effective sales team understands the big picture and the context of their team’s work to the greatest degree possible. That includes understanding the relevance of their job and how it impacts the effectiveness of others and the overall team effort.

Too often, sales people are asked to work on an activity without being told how their role contributes to organization’s vision, much less how their efforts are impacting the ability of others to do their work. Understanding the organization’s vision promotes collaboration, increases commitment and improves quality.

An effective team works collaboratively and with a keen awareness of interdependency.

Collaboration and a solid sense of interdependency in a team will defuse blaming behavior and stimulate opportunities for learning and improvement.

Without this sense of interdependency in responsibility and reward, blaming behaviors can occur which will quickly erode team effectiveness and morale.

The Importance of Building a Shared Mental Model

One of the most important responsibilities of a sales leader is to translate the organization’s vision, mission and values into a meaningful context that sales teams can relate to and feel excited by. If this is achieved then the leader will have created a sales team with a shared mental model. This transforms an ordinary sales team into a high performing one.

For clarity, here is a brief description of the following terms:

An organization’s vision is a guiding image of success formed in terms of a huge goal. It is a description in words that conjures up a picture of that organization’s destination. A compelling vision will stretch expectations, aspirations, and performance. Without that powerful, attractive, valuable vision, why bother?

mission statement communicates the essence of an organization to its stakeholders and customers, and failure to clearly state and communicate an organization’s mission can have harmful consequences around its purpose. As Lewis Caroll, through the words of the Cheshire cat in Alice in Wonderland says, “If you don’t know where you’re going, it doesn’t matter which way you go.”

Guiding principles are the consequence of a mission statement that are intended to inform or shape all subsequent decision-making, which also provides normative criteria allowing policy-makers to accept, reject or modify policy interventions and activities. They are a guiding set of ideas that are articulated, understood and supported by the organisation’s workforce.

Values are beliefs which the organization’s workforce hold in common and endeavor to put into practice. The values guide their performance and the decisions that are taken. Ideally, an individual’s personal values will align with the spoken and unspoken values of the organization. By developing a written statement of the values of the organization, individuals have a chance to contribute to the articulation of these values, as well as to evaluate how well their personal values and motivation match those of the organization.

The Human Capital Development Model, created by Krauthammer International, is a logical process that can take top management concepts, and translate them into a context that has real meaning for staff at all levels.

The key to bringing this model to life is to answer the following questions:

  • Do my team understand the organization’s vision and how their role moves the organization closer to achieving it?
  • How can my sales team translate the organization’s mission into one that is relevant to them?
  • How does the organization’s guiding principles impact on the day-to-day responsibilities of sales people?
  • Which of the organization’s values does my sales team relate to?
  • How can we interpret these values so they become compelling for each sales person?

An effective sales team understands the big picture and the context of their team’s work to the greatest degree possible. That includes understanding the relevance of their job and how it impacts the effectiveness of others and the overall team effort.

Too often, sales people are asked to work on an activity without being told how their role contributes to organization’s vision, much less how their efforts are impacting the ability of others to do their work. Understanding the organization’s vision promotes collaboration, increases commitment and improves quality.

An effective team works collaboratively and with a keen awareness of interdependency.

Collaboration and a solid sense of interdependency in a team will defuse blaming behaviour and stimulate opportunities for learning and improvement. Without this sense of interdependency in responsibility and reward, blaming behaviours can occur which will quickly erode team effectiveness and morale.

 NB: If you are going to be anywhere near London this coming Thursday, you really must come and meet me. I am just one of the keynote speakers at the MHI Global Sales Leadership Forum. You will find all the details HERE

What or Who Are “People Developers?”

Motivating is that leadership skill of developing other people to do a better job. Within every business, there are recognized criteria for people development.

What are those criteria for developing others (let’s call them “People Developers”)?

  • Achievement
  • Recognition
  • Participation
  • Growth

These four factors are inter-related and overlap. One factor may be more important to one individual than another and it is your job, as a leader, to ascertain what others require in their development.

Let’s look at these motivators as they relate to the development of your team and your leadership.

Achievement

Satisfaction – a sense of personal accomplishment that a challenge has been met and the job has been well done. For most people, achievement is a reward in itself. It is the basic thing, which spurs people to go and do a better job.

How do you, as a leader, use achievement as a developer? If someone knows that they have achieved something, they must first know what is expected of them – a set goal – if they are to realize later they have achieved it or exceeded it. Thus, if you intend to use achievement as a developer, you must be sure you clearly outline goals for your people to strive for.

Recognition

Closely related to achievement, it is meaningless unless earned. Recognition is an expression of approval, or appreciation, by others whose opinion and judgment is valued. Within the business world, you have many ways to show recognition.

Recognition and praise will show many unknown facets, like a diamond.

Recognition polishes it and allows latent talent to shine out.

Participation

People are more strongly motivated if they feel they have helped in the planning of their objectives, rather than being told. They should feel as part of not only their own work, but of the total group and Company.

Remember, inactivity is often caused by feelings of inadequacy. Participation can overcome this feeling of inadequacy.

Growth

The person who feels as if they are at a dead end, probably is. They must feel that there are the opportunities available for them to grow and that they are growing in experience, knowledge, skill and understanding. If we can help them start growing, the person will, in fact, exert more effort. Even the rewarding of others can achieve motivation, because it shows that opportunity is available for growth.

Remember, confidence is built by achievement levels set along the way to one’s goals.

Leadership development starts at the top.

A true leader learns all facets of the business they are involved in.

Don’t Ever Lose Your Uniqueness

I was recently asked that if I believed that all customers and clients – and presumably prospects – are unique, would I agree that all front-line sales professionals are unique?

Both the short answer and the long answer to that question is an unequivocal YES, most certainly they (we) are.

This is precisely why I rally against those who would have us all divided into boxes or categories. When someone tells us to try and sell in a certain way, and that way is alien to us, our approach is immediately identified by our prospect/client/customer as being “manufactured” and unauthentic.

The fact that we have chosen sales as a career would suggest that we have an outgoing and gregarious nature – but be assured, “outgoing” comes in various different flavors, and isn’t always accompanied by self-confidence. We all have a comfort zone, and when we are forced to venture out of it, we are, well … uncomfortable.

When we become uncomfortable, we become anxious, and that anxiety is transmitted to our prospects, so now everyone is … uncomfortable, you know where I am going with this.

One of the first issues I address during my workshops is the fact that nobody has the right to tell anybody else how to sell: I have always seen my role as one where I share my knowledge and experience, illustrate techniques, discuss concepts and new ideas, and then allow my students to take away what they feel comfortable (yes, there’s that word again) with, to integrate within their own selling style.

When you think about it, isn’t this rather like parenting? We do this with our children: We teach them core values, and then allow them to make their way in the world, whilst we retreat into a “supporting” role.

So my message today is a simple one – don’t allow anyone to tell you how to sell: The one unique feature that we have in a sales environment, where the playing fields have never been so flat, is ourselves – our unique selling style, unique personality, unique selling ability.

Say “Yes” to Confidence, and “No” to Arrogance

During a recent keynote, I made a case for confidence being one of the defining factors of all successful people we know, and I said….

It is their inner belief that they can achieve anything they want to achieve, and enjoy as much success as they wish – however they personally define success.”

The speech prompted several questions at the end including this one …

“I am wondering how best to test for the confidence level you discuss when interviewing prospective sales personnel. (If it has not been clearly demonstrated in past performance records). I believe over-confidence displays itself in cockiness and conceit and that amount of confidence is harmful (to me, my company and the salesperson himself) in the long run. Any thoughts on how to test for the “right” confidence level?”

My response  …

“There is a huge difference between confidence and arrogance (cockiness). Confident people understand the need to continually learn and expand their commercial bandwidth. They understand what they know, but equally recognize what they don’t know. Conversely, arrogant people think they know it all, and as a consequence, don’t know what they don’t know!”

And that really is the point: Crossing that line from confidence to arrogance is so, so easy.

Humility is, in my view, one of the most admirable and rare traits of the truly successful.

The underlying message of this post is this: It really doesn’t matter how good you think you are, there will always be people who are better, and your ambition should be to emulate them.

Even if you think you know everything there is to know about your chosen topic, respect others who know everything there is to know about their chosen topic – being myopic is a very unattractive trait.

Everyone you meet in this world will know something you don’t know – do not be misled by his or her status, because status has no relevance when it comes to wisdom. Some of the most interesting and mind-expanding conversations I have ever had have been with people in very humble situations – they probably couldn’t spell “arrogance” let alone describe it!