Archive for April, 2010

Are You Sticky?

April 30, 2010

Some products and services we can’t seem to live without.  Once we begin to integrate them into our lives, or business processes, they become very hard to pull out.  In other words, they become sticky.   The stickier your products are, the higher premium you can charge, and the harder it is for your customer to leave.  Great examples of sticky products include prescription drugs, the Ipad, and backup software.

Commodities, on the other hand, are not sticky.  They can be interchanged with any number of alternatives without pain to the customer, and often, without the customer even noticing.  Toothpicks and matches are at the low end of this commodity scale, but even some high end, service-oriented businesses, like NASCAR driving schools and first class airline tickets, can be perceived as commodities too.

Odds are, what you sell falls somewhere between prescription drugs and toothpicks.  The secret to keeping your customers from leaving you for the next-best-alternative is maximizing your stickiness.  And to do that, you’ve got to continually highlight and promote what makes your product stand out from the others.  This is as important after the sale as it is during the sales campaign.

Only you can decide how to make what you sell more sticky.  But make no mistake, if you’re not actively pursuing this strategy, you’re setting yourself up for a painful wake up call somewhere down the road.

Just Because You Can

April 27, 2010

You have a market value.  Your market value is maximized when you do what you’re paid to do.  If you’re a sales person, that means that your highest market value is realized when you focus on selling.  Pretty straightforward, right?

Then why are you wasting time on expense reports, RFP responses, quotes, unnecessary meetings, conference calls, fixing the problem, and perhaps, even driving yourself to appointments?  Every one of these tasks can be delegated to someone who can’t do what you do best – sell.

Outsource.  Hold people accountable.  Focus on maximizing your effectiveness.

Just because can do something doesn’t mean you should.

Market Share vs. Wallet Share

April 23, 2010

Growing market share is a tough thing to do.  This concept (by definition) requires you to add net-new customers at the expense of your competitors.  If the market is worth your time, competition will be fierce, barrier to entry is high, and sales cycles can be long.

Growing wallet share, on the other hand, leverages existing relationships that you already have, with customers who already buy from you (and are presumably happy with your product or service), to sell a related product.  For example, car dealerships grow their share of your wallet by pushing extended warranty packages when they sell new vehicles to consumers.  The effort (and cost) of adding this ancillary product is usually much lower, the sales cycle shorter, and the margin higher (in part because of the lower costs of sales).

To satisfy the endless need for quarterly/annual growth, companies are always trying to find ways to increase wallet share to augment their search for new core-product customers. They do this by acquiring existing companies/technologies or developing them on their own, and they do it because they know it’s sometimes easier than simple organic growth.

At the individual contributor level (that’s you and me), these new products and services represent an awesome opportunity. They give us a new reason to visit our customers, represent upside for quota retirement and earnings potential, and probably most importantly, increase our level of “stickiness” (which we’ll discuss in a future post).

So instead of complaining the next time your company acquires or introduces a new product (that your boss forces you to learn and pitch to your existing customer base), embrace it.  It’s a hell of a lot easier than cold calling.

Your Customers Are Tired

April 20, 2010

Your Customers Are Tired:

  • Tired of reps who miss their commitments.
  • Tired of feeling like they’re being taken advantage of.
  • Tired of sales people who talk more than they listen.
  • Tired of being handed quotes they can’t make sense of.
  • Tired of people who sell around them.
  • Tired of the quarter-end deal.
  • Tired of talking to your manager.
  • Tired of you showing up only when a deal is on the table.

Are they tired of you?

You and Your Ego

April 16, 2010

In your personal life, you’ve probably got it pretty good.  Your wife is better looking than she should be, you’ve got an above average house and a couple of nice cars.  Odds are, you make more money than your non-sales friends (certainly more than your customers), and you maintain a flexible schedule and a respectable golf handicap.

But if you’re smart, your customers will never know this about you.  If you’re smart, you will allow your customer and his interests to take center stage, you’ll humor his stories, put up with his know-it-all attitude, and maintain humility throughout.  In other words, you will focus on his job, his house, his family – his life.

It can be frustrating to suffer through the ego trips of a middle level manager who has as much talent as you have in your pinkie finger.  But don’t let it get to you.  It comes with the territory, with the profession you chose.  That’s why you get paid well – because for 1 hour, you have the ability to let a guy who got picked last in elementary school dodge ball (and never got the girl) feel like the man.

There’s only room for one ego during a sales call, and the successful sales professional never forgets to check his at the door.

The Power of One Truly Productive Day

April 13, 2010

Popular studies show that the average amount of productive work, I mean actual work, that an employee in the U.S. completes in a single work day is less than 6 hours.  When you consider the time wasted on the Internet, in personal conversations, useless meetings, and interruptions from your personal and professional contacts, it doesn’t take much of a stretch to arrive at that number.

So what is the impact of productivity to your success?  Your earnings?  Your career?

Everything you do in sales has a cumulative effect.  You make the 5th call on a prospect and he finally picks up the phone.  You get the appointment, and come in to present.  Your presentation goes well and you’re invited to submit a proposal.  Your proposal is accepted, and you win the deal.  The prospect becomes a customer, and agrees to serve as a reference.  That single reference helps you close 5 other deals, each of whom offer to serve as references themselves.  And so it goes.

The amazing impact of that one event, that 5th cold call, is mind blowing.  And if you fill the unproductive spaces in a single day with dozens of these events, imagine how your professional life would change.  20 years from now, the difference between that “typical day”, and “one truly productive day” create a gap that can be measured in the hundreds of thousands (if not millions) of dollars.

Lots of people have written about the 5th cold call.  But not many have taken the time to consider what one truly productive day could actually mean.  When you do, it certainly makes picking up the phone a little easier.

Keeping Score

April 9, 2010

If you’re serious about improving, you need to start measuring your success.  I’m not talking about what you sell versus your quota – that’s obvious.  Its the sub-components of the sale that need to be inspected and recorded to drive incremental improvement to your productivity.

Professional sports organizations have known for years that looking beneath the surface can tell you a lot. Baseball teams have gone beyond the measurement of typical statistics – RBI’s and ERA (two of the most popular measuring sticks) – to sabermetrics, where players are ranked by obscure stats like “On Base plus Slugging” percentage or “Late Inning Pressure Situations”.

Proactive sales reps and managers apply this mindset to business life. They examine individual sales process components and look for areas of improvement. Typical stats might include:

  • Cold call to appointment ratio
  • Appointment to proposal ratio
  • Proposal to engagement (sale) ratio
  • Average transaction size to quota ratio
  • Average time from initial sale to upgrade/second sale
  • Close ratio per vertical industry

These probably won’t overlap perfectly with your industry, so look beneath the surface and pick what’s important you.  I guarantee you’ll uncover a couple of nuggets that can contribute to your success.  You’re missing a lot if you’re not keeping score.

Caller ID

April 6, 2010

A friend of mine recently sent me an apologetic email to give me a heads up that a “custom clothing” salesman would soon be calling me.  I immediately asked for his number so that I would know when not to answer my phone.

How many of your customers pick up when you call?

If that number is lower than you would like, the odds are high that the value you provide vs. the annoyance you’ve become is somehow out of balance.  It’s time to re-think your value and re-tool the way you convey it.

Second Best

April 1, 2010

At any given point in time, sales is a zero-sum game.  If you finish #1 in a sales campaign, you win.  If you finish #2, you lose.  If you’re never #1, you’ll not only not make any money, you’ll get fired.

But measured over time, second place isn’t always a bad place to be.  Consider the typical corporate sales team:  #1 makes the most money, wins all the awards, gets visibility within the executive ranks and the “white-hot light” of constant inspection, and a ridiculous quota uplift in the next fiscal year.

On the other hand, #2 still makes the club trip, stays below the radar, makes plenty of money, and has a manageable quota next year.  It’s highly likely that the second place rep makes more money over a 3 year period because he avoids the major peaks and valleys.

Sometimes, the #2 spot is exactly where you want to be.

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