Why you should say no if you don’t match 100% of your prospect’s need

In the good old days, sales people were able to fill their portfolio with stock items and hit the road selling those, without much preferences if customers’ needs fit to that product. But now, customers are demanding 100% solution of their problems.

Some time ago, in a world of never ending market growth, goods had to be produced cheaper and cheaper, driving competition harder and harder. All eyes were focused on how to source and produce to the lowest cost as possible, not what customer really needed.

Customers thought they were needed the offered goods – and for sure, they couldn’t find anything else. And customers were right, not much were changing from year to year or even from decade to decade. Globalization – as we now it today – driven by the internet revolution hadn’t started yet. Companies were pretty happy to source their business with goods available.

Then something happened. A great paradigm shift, from producers’ point of view to customers’.

The introduction of internet started a customer education process. First at slow pace, but soon accelerating. Customers started to get informed using available information and with social media introduction, they were also able to discuss within their networks about their problems and needs, just to get as informed they could before they engaged with a salesman.

Today, this paradigm shift is fully completed. The customer has made himself comfortable in the driver’s seat and decisions are made fully informed. But they still need help to match products with their needs, in detail.

On the selling side, we meet with fully informed customers, so it shouldn’t be any problem – if you are informed at the same level about your products. In my blog post Why Expertise Outperforms Process , I explain why being an expert on your own products or services is mandatory these days.

But my point is, if the salesman’s offer don’t fit 100%, the customer don’t solve 100% of their problems. The result on your customer’s side is not reaching their fully potentials and goals, leading to decreased competiveness. On the selling side, you may lose the deal to a competitor meeting 100% of the needs. Or, have a lot more work to get it. Work including persuasion, product customizations, discussions, motivations an much more hassle to eventually end up with the signed contract.

My advice is simple. Only go for opportunities you know you will solve 100% of your customer’s needs.

puzzle

In an efficient sales process, the first stage – qualification – secures no deal is allowed to pass if not a couple of qualification questions are having positive answers. Common questions are such as if customer has budget, if you talk to the decision makers, if investment is intended in reasonable time frame, if competition is not too overwhelmingly and so on.

“If your product fit” sometimes is one of these questions, but not too often the most important and never the only one. Why? It should be.

Think about the “good old days” when everything you produced could be sold, no matter what. The salesman was king and customers were trusted him as The Voice from the world outside.

Those days could be revived once again, if your product is solving 100% of your customers’ needs and most of your time is spent on helping your customer understand and trust that.

Doing so before you qualify your opportunity in your sales process, will save tremendous amount of hassle and time. But to afford to spend all your time on fit matching, you need to say NO to opportunities that not have any potential to pass the “Fit Test”.

Good luck!

Stefan

 

 

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What is Lean sales? – Create a plan of execution!

Finaly I have managed to continue from my last post

As a recap, take a look at the Pictochart.

As you are creating your sales plan you need to look at how your organization can support your ambitions. Let’s say you want 100% delivery performance to be your lead argument in sales and you believe you can boost sales by 20%. Even if your company has a track record of 100%  on time delivery, a 20% increase could disrupt your current supply setup and you could potentially lose customers long term due to lack of living up to your promise.

To ensure that you have captured the capability of your company in the future and initializing necessary change you can use some of the following tools:

  • Value Chain Analysis
  • SIPOC
  • Competence Analysis
  • WorkshopsDefine how to work with Systems/Tools
  • Define Documents/Workmethods

Value Chain Analysis

Value Chain Analysis is a three-step process:

  • First, you identify the activities you undertake to deliver your product or service;
  • Second, for each activity, you think through what you would do to add the greatest value for your customer; and
  • Thirdly, you evaluate whether it is worth making changes, and then plan for action.

Step 1 – Activity Analysis

The first step to take is to brainstorm the activities that you, your team or your company undertakes that in some way contribute towards your customer’s experience.

At an organizational level, this will include the step-by-step business processes that you use to serve the customer. These will include marketing of your products or services; sales and order-taking; operational processes; delivery; support; and so on (this may also involve many other steps or processes specific to your industry).

At a personal or team level, it will involve the step-by-step flow of work that you carry out.

But this will also involve other things as well. For example:

  • How you recruit people with the skills to give the best service.
  • How you motivate yourself or your team to perform well.
  • How you keep up-to-date with the most efficient and effective techniques.
  • How you select and develop the technologies that give you the edge.
  • How you get feedback from your customer on how you’re doing, and how you can improve further.

Step 2 – Value Analysis

Now, for each activity you’ve identified, list the “Value Factors” – the things that your customers’ value in the way that each activity is conducted.

For example, if you’re thinking about a telephone order-taking process, your customer will value a quick answer to his or her call; a polite manner; efficient taking of order details; fast and knowledgeable answering of questions; and an efficient and quick resolution to any problems that arise.

If you’re thinking about delivery of a professional service, your customer will most likely value an accurate and correct solution; a solution based on completely up-to-date information; a solution that is clearly expressed and easily actionable; and so on.

Next to each activity you’ve identified, write down these Value Factors.

And next to these, write down what needs to be done or changed to provide great value for each Value Factor.

Step 3 – Evaluate Changes and Plan for Action

By the time you’ve completed your Value Analysis, you’ll probably be fired up for action: you’ll have generated plenty of ideas for increasing the value you deliver to customers. And if you could deliver all of these, your service could be fabulous!

Now be a bit careful at this stage: you could easily fritter your energy away on a hundred different jobs, and never really complete any of them.

So firstly, pick out the quick, easy, cheap wins – go for some of these, as this will improve your team’s spirits no end.

Then screen the more difficult changes. Some may be impractical. Others will deliver only marginal improvements, but at great cost. Drop these.

And then prioritize the remaining tasks and plan to tackle them in an achievable, step-by-step way that delivers steady improvement at the same time that it keeps your team’s enthusiasm going.

SIPOC

SIPOC is a way to map your processes, use it to break down your value chain.

S (supplier): Entity that provides input(s) to a process

I (input): All that is used (mostly as variables) to produce one or more outputs from a process. It is worthwhile to note that infrastructure may not be considered as inputs to a steady-state process since any variability induced by such elements remains fixed over longer periods of time. (Exceptions include new infrastructure being introduced or a greenfield project.)

P (process): Steps or activities carried out to convert inputs to one or more outputs. In a SIPOC, the process steps are shown at a high level.

O (output): One or more outcomes or physical products emerging from a process.

C (customer): Entity that uses the output(s) of a process.

To explain SIPOC in good way will add too many pages to my blog. I found this site helpful in explaining how to use the model. It may seem complicated, but you do not have to follow it too 100%. Find a levelel that gives you an overviewof the process you want to define.

Competence Analysis

To be able to execute your sales plan what competence do you need. Not only in your sales force, but in the entire value chain. From a value chain perspective, you may demand change in competence from product development to new transportation methods.

Understand and identify opportunities (and limitations) in competence and companay capabilities end-to-end, that will impact your business’ development. Define what is needed to deliver to the wished position, growth and change drivers.

If you have structured your Value Chains (Customer processes), created SIPOC charts for each process, you now need to connect the competence you need and compare it to the competence you have.

  • What are our strengths to build on?
  • What necessary competence do we lack that have significant impact on our business forward? Competence gaps linked to business risks?
  • How do we create learning in the Business?
  • How to organize and lead for success?
  • Example of areas: competence needs end to end and competence needs both for generalist and specialist competence.

Workshops

These first tools work really well as workshop material.  Don’t do this on your own! Lean is about empowering the people performing the work, and involving them is crucial for your success! This can also be used when creating your sales plan…

Remember to have a clear goal with your workshops!

Workshops without clear goals is a coffee break. Nice to sit there chit chatting, but it is not productive.

Have you got the right scope of the workshop?

It is also important not to take on too big a topic. The group needs to be able to get a handle on the subject.

Be clear in the invitation!

If the people attending need to prepare, you need to tell them and you need to give them time to do so. This will also set how people prioritize your workshop. If the invitation is fuzzy, the turnout will probably not be that good.

Invite the right people!

If you have done your homework you will secure that the right competences, organizational levels and types of personalities are present.

Meet at place that suits your workshop/group!

Staying at the office is a great way to kill creativity and focus. Find a place where you have the amount of rooms you need, if you for instance plan to split the group in small groups

Create an Agenda!

Now that you know your primary objective and who will attend, you can start to develop an outline of how you’ll achieve the workshop’s goal.

  • Main points– Create a list of main points to discuss, and then break down each larger point into details that you want to communicate to your audience.
  • Visual aids– List the visual aids, if any, you’ll use for each point. If you need technical support, this helps the people providing it to determine where they need to focus their efforts.
  • Discussions and activities– Take time to list exactly which group discussions and activities you’ll have at which point in the workshop. How much time will you allow for each exercise?

Remember, the more detailed your plan, the more you’ll ensure that your workshop will run to schedule – and be successful

Make sure you have a Follow-up Plan

The only way to find out if your workshop was a success is to have an effective follow-up plan. Create a questionnaire to give to all participants at the end of the event, and give them plenty of opportunity to share their opinions on how well it went. Although this can be a bit scary, it’s the only way to learn – and improve – for the next time.

It’s also important to have a plan to communicate the decisions that were reached during the workshop. Will you send out a mass email to everyone with the details? Will you put it on your company’s intranet? People need to know that their hard work actually resulted in a decision or action, so keep them informed about what’s happening after the workshop has ended.

Define how to work with Systems/Tools

If you are making changes to your Sales Plan, or if there are effects on the organization, make sure your system users are up to date on how they enter or use system information.

Make sure you involve are your super users and system owners in the process of changing the way the organization works, the products you are selling and or the services you intend to introduce.

Remember that systems have limited flexibility and that though you may find a change insignificant, it can be close to impossible to do without changes to the system environment. Also remember that these changes can take a long time to implement and failing to bring the systems in early in the process is a sure way of failing before you even got started.

Define Documents / Work methods

If you are changing the way you work, make sure you have defined how you want the people in your organization should work in order to make the work easier, reduce errors and make the task repeatable with the same results every time. It may seem obvious when you just agreed that something should be done in a certain way, but down the line you will be glad you took the time to make the task clear.

The same goes for documents. Make sure templates are ready, certificates prepared, legal documents written and approved and agreements made with external parties.

The Plan of Execution

So I have listed all these tools, what are you supposed to do now? You need to look at what you want to do and what you can and write down what you will do. It is about finding the easy executions, the necissary and painful challenges and the ambitions you will need to put off for the future because they are just to damn difficult to pull off…this year. Remember that it does not end here, it begins here! Knowing your organizations limitations and possibilities is the only way to move forward. It is just a matter of putting a plan together and to set it in motion…

Lead profiling – here’s a thought…

Continuing from my last blog..

I was at a lecture on content management and how to drive traffic and I got a concrete tip how to make content into context. You need to create profiles of all the types of people you are trying to communicate to and test the content on them. So the speaker presented Bill (45 year old male who is conservative and believes things when he sees it), Susan (30 year old female who is a straight arrow and calls things on the spot), and so on. Extensive personalities where presented, a total of 10 I think. Every new content was then run against each profile and scored. Based on the scores the company could decide if the where to publish, or change the content. It was very efficient.

This exists in companies that work with internet based sales. Here I find a lot of models, and it is quite clear that this is common here because these clients have made it easy by surrendering their information by beeing on the web and logging on to the company sites sharing age, gender, geographic intel, and so on. So much has happened in internet based sales in such a short time and “traditional” sales need to learn a thing or two…

Sales should have a good idea of what the ideal prospect looks like, what is the best case? By putting together a profile of these prospects, sales can break down what characterizes of the different prospects. What are their pains? How far are they from taking a decision? What level of awareness do they have? What industry segment do they belong to? Did they contact your company? Have they purchased the product/service before? Do they have a contract with a competitor? How price sensitive are they? And the list goes on…the trick is to collect intel.

I found a site with a great example of a way of profiling that makes the profiles feel real and how to present relavent information at the zuyderblog

Then there needs to be a discussion with Marketing around the profiles on how these different profiles will be reached thru different Marketing activities. There might be a profile that your market analysts can see that Sales have never worked with, then Sales need to bring this into their strategy and find a way to sell towards this profile.

Matrix view

The red figures are the profiles created by Sales/marketing and they are placed to show the areas they cover on the market.

Segments with lead profile spread

Each market activity  (A1-A4 in the example below) needs to be matched against the profiles, the score converted into how many % of the profile match the campaign goals and content, and if there is gap the group (Sales and Marketing) can decide that this activity does not have to reach this profile, or the plan might need to be changed to include this profile. I have talked about Demand Shaping before and this will definitely give you means to attempt to shape your demand.

Campaigns mapped against segments and Lead Profiles, pies

Profile diagrams

Another way to do this is to focus on the profiles, set the market asside, breaking them down to 10 key factors:

  1. Buyer maturity, how close are they from taking a descision
  2. Buyer knowledge, from expert to inexperienced
  3. Buyer influence, does the person you are in contact with have the authority to take the descision, from top executive to agents
  4. Company size, is this a big or small company
  5. Product complexity, are the requesting a simple or complicated product/soloution
  6. Level of interest, is the buyers communication frequent, do they respond prompltly
  7. Availability, is the buer easy to reach
  8. Price sencitivty, two what degree is this client pricesensitive
  9. Level of Competition, likelyhood we can land the deal over our competitors
  10. Purchase history, times we got won vs lost opportunities for this company.

The optimal score is 1 on all of these. To describe the perfect prospect: A buyer who is ready to make a purchase and who can take this descision. The buyer has a high level of knowledge and works for a large company, price is not the main issue. This buyer is interested, has reached out and is available to discuss buisness. This deal is not subject to competition, the specifications are standard and the buyer is already a client.

Probably not that common…

By creating profiles with specific target scores you can set  a score on a campaign on what areas it is supposed to target and get a comparison between the profile and the campaign. In this example I have two profiles compared to a campaign:

Campaign Webgraph

In this example I would draw the conclusion that the campaign will be good for Profile 1 in improving knowledge, bringing the descision makers into the purchase process and raise the importance  of our item to ensure good responce rates, For Profile 2 it will bring the small companies  and raise the level of importance of the item. The element in the campaign that intends to raise the interest in the companies is waisten on these profiles as the already have this quality, but there may be some effect.

Collaborate with Operations

This collaboration can easily stretch to include Operations. If there is chaos here, there is a high cost in both Sales and Operations.

Getting companies to see the entire picture is my calling, I hope this can lead to a productive discussion. Looking forward to your opinion.

Leadcycle, improved

Starting in the right end – marketing and sales collaboration

As usual I have been reading up on what is going on and I came across this blog post: Marketing Bingo – You Might Be Playing And Not Even Know It. I have never been part of working within Marketing, so there might be something I’m missing, but for me Kyle makes a good point. Work from the outside in…

I started to think about how I percieve marketing, wich is more inside out: Who are we selling to? Is this changing? Can we see any trends? What precision can we expect in the conversion from Lead to Opportunity? How do we segment the market? How do we process the leads when they come in (different approaches based on segmentation)?

From a B2B sales perspective, the marketing actions need to create leads or make the lead creation possible. In order to give the sales organization a fair chance to sell, the leads need to be half decent or the customers need to be interested. There needs to be a common approach on the pipeline effeciency, in my view this is Gross Margin, taking all costs in account.

I made a model (probably exists but I could not find it anywhere) I would like to get some feedback on:

Sales, Marketing, Market mix

If Sales and Marketing create a plan that does not reach the intended market they have an “Ineffective Strategy”. If Marketing reaches the market, but these recipients never come in contact with sales, then we get “Uncaptured Lead”. If Sales work the Market in order to reach the quota and land prospects without the support of the Marketing we have a “Lead Deficit”. When Sales and market work the market in the same area we hit the “Sweet spot”.

Companies need to find a way increase the collaboration between sales and marketing to get better at targeting the sweet spot. First of all you need to have a common picture of what market looks like, what you want to achieve and how this transforms into customers.

An example

If we look at how this can be done, let’s start with a segmentation of our customer:

Segments

Let’s say that S1 is Low price/Low complexity, S2 is Low Price/High Complexity, S3 is High price/Low complexity and S4 is High price/ High complexity.

If we study our customers purchase behavior the last 12 months we find that we have a strong tendency to land in the S4 segment:

Segments with customer spread

Looking the Marketing we are targeting the following area:

Segments with customer and marketing spread

Looking at this picture it is easy to see that there is untapped potential. What needs to be cleared out is if Marketing I over reaching / targeting the wrong market, or if Sales are missing out on Prospects because they have the wrong approach to the market. Wouldn’t you like to know why and correct the situation?

My thought is to try and move the circles by increasing the collaboration and  achieving a higher efficiency in the sweet spot = more results with less work:

Changing the Sales, Marketing strategy

Stay tuned…a blog comming up on the topic of “Lead Profiling”, how to increase the “sweet spot”…

KPI:s before the sales process starts

In my last Blog post The Death of the Cold Call I described a trend that has become more obvious the recent year; the customer buying process has been ongoing for quite a while before the sales process starts. The consequense is that you cannot influence that much you could before, because of much more informed customers. The customers put you on their short list, not you. The phases Lead and Qualification are becoming obsolete very quickly having no registered sales activities.

SInce we cannot control it anymore, should Sales then hand-over this part of the process to Marketing? Well, it depends. The discussions in the forums are there and people’s opinions deviates which is the most suitable. Marketing is good at communication of the brand and what it stands for. Promoting the brand in these phases is really important, but could you just exchange Lead or Qualification activities with more marketing?

I’m not sure. I think it’s still Sales responsibility to refine and qualify a Lead, even if there are no obvious sales activities. But if ordinary sales activities are gone, what comes instead?

Let’s suppose the definition of Lead and Qualification are like “sort of need any of the companies in our target segments have and the activities to clear out if it’s something for us”. Typical sales activities to create (or catch) and Qualify such Lead would have been:

  • Prospect calls in
  • You call the prospect (cold call)
  • Prospect leave interest on your website
  • A trade show
  • Timeframe within …
  • Budget allocated
  • Decision maker identified
  • Product fit

Now. If most of these activities aren’t visible anymore, how and what can you do instead to survive the early phases so you will be one of the short list members? And how can you construct a KPI that drives you there? It’s about communication – and what types are relevant for your company. A simple method constructing a new KPI is using the PDCA: Plan, Do, Check, Act.

Plan-Do-Chack-Act based on a solid communication plattfolm.
Plan-Do-Chack-Act based on a solid communication plattfolm.

Then consider what new types of “sales activities” would be replacements for the above ones. Here’s some examples:

  • Investigating and register for X forums or discussion groups in your industry
  • Growing the number of connections in target networks
  • The number of comments or likes in discussions
  • How many started threads within your product range
  • The number of discussion threads (within your business area of course!) started by you
  • The number of blog posts per month
  • Referrals to your comment or Blog post
  • Number of net followers
  • Number of decsion makers taking part in your discussions or comment on your input.

As you may see, it’s not easy. But mostly it’s not easy because we aren’t used to it. Our experience is not covering what is a relevant target figure – what would be enough? And how can we measure hitrate? I think you can’t direcly, but if you measure some of the above and compare the result over time, you can have the trend for sure.

After all, it’s just surviving.

Good luck! Stefan

Checkout the Sales Scenario app for iPad, thanks.

 

 

Feedback makes your decisions better!

In Sales Scenario – your Sales Tactics App there are many things that will profoundly change the way you make sales decisions.

While running scenarios of the future, you ask yourself questions of the type ”what if”. As I mentioned before in this blog it’s much harder to ask the right question than give a proper answer. In your management team, members are gathered with different experiences, background and skills. That’s the basic requirement for such team.

The R&D Manager will inform about what impact the new product line has on the average order size, the Finance Guy about the cost for the sales organization, the Marketing Lady how many leads are possibly to generate, the CEO about the new targets. These expert’s experiences are the terrific foundation for creating your accurate what-if questions.

Get feedback.

First thing is to formulate the objective. That’s what problem to solve. Today it’s only less than one and a half month to go until end year’s target has to be achieved. The Standard Question at this time is: ”Do we reach our targets?”

Chat

The Sales Scenario App may show you that every sales rep has to initiate 9 new opportunities (instead of 7) every week from now on until year end to achieve the agreed targets.

So the objective is: How can we secure fulfillment of end year targets?

One of the future scenarios – what-if questions – may be: Is 9 new opportunities per sales rep really possible? In the Sales Scenario App you have the option to really make collaborative decisions by inviting your management team, friends or experts for comments or likes:

Furthermore; if you get an invitation but can’t answer by yourself (or need a more detailed perspective), you may invite another friend or expert in turn. That’s really collaborative!

The Sales Scenario App is on AppStore today. Happy playing what-if questions!

Why the decision process is more important than the charts

Got a paper in my hand, covering the new hypes of Business Intelligence. I wasn’t especially interested though it’s my area of work, because of all superlatives of what you could analyze. There were those fancy pictures showing columns, pies and all other types of charts.

Now, what were the charts showing, really? And if you understand them, what would be your action?

The feeling became more and more obvious. We dig deeper and deeper into the databases, but do we understand the results? I was little bit discussing this in the blog post Big Data anyone? It’s time for Less Data. We hurry finding answers, but we are not really specific about the questions.

However, the paper was showing a lot nice answers to me. A lot enterprises have been pouring billions of bucks into their fantastic systems, costing plenty of money in licenses and consultancy fees for their customers.

But at the end of the paper, there was a tiny little article that cought my interest. It was telling the future of Business Intelligence is you. Yes, you. The humans, the management teams. Discussing what to do using their experience and making decisions.

Besides the thought that the humans have taken decisions long before BI tools were developed, the article pointed out the actions taken AFTER the analytics are presented. The process we use to move forward taking good decisions.

The point was the BI tools for the future should be supporting the decision process it self, not really the contruction of another pie chart or Big Data project.

The analytics and charts will in the near future become commodity, at no or low cost and easy to achieve, due to high competition and the trend of having access more than own the data or charts. But the decision process will still be sophisticated, because we are humans. We still have to make and implement decisions, and we still have to change people’s minds.

We still need to get well grounded decisions to accomplish change. And we need to change even faster than before.

As always, it’s easier to change in small pieces than in one major leap. That’s why it’s more important to start thinking about your decision process than your charts.

But I admit they can be nice and colorful 😉

Best Regards,

Stefan