Sales Laundry

Archive for April, 2009

Relatively recently I was working with a technology provider and found myself analyzing the hoops they made their customers jump through to make a purchase.

 There were three different multipage documents requiring initials or a signature on each page.  The customer had to sign the original, fax a copy back to the office and mail the original copy, preferably via FedEx at their own expense, so the paperwork loop could be closed and the annoying “where is your paperwork?” phone calls could be avoided.

 If someone has elected to give you money in exchange for your product, why not make it as easy as possible to make the purchase?

 Why does it take 30 days, 60+ pages of paper, countless initials and signatures to buy a house that can’t move, and only a day or two to buy an equally expensive car that could be stolen, parked in a shipping container, and sent to around the world to parts unknown?

 Car dealerships are not without their own hoops, with haggling back and forth with the Sales Manager via the sales guy, getting points added on used car financing, warranties, rust protection, pin striping, etc.  It does not have to be that difficult but it is, because the end of the transaction is where the dealership has maximum leverage.

 In an attempt to keep theft down and maximize opportunities for warranty sales, Circuit City created customer choke points in their stores, making it difficult for the customer to purchase their merchandise and get out at busy times.  Prior to their final incarnation, Circuit City sales transactions were always limited to the number of employees on the floor with time wasted between transactions because customers had no tolerance to queue up and wait at Circuit City as they had been conditioned to do at grocery stores, Wal-Mart or Best Buy.

 Look at the actual mechanics involved in how your customer places his or her order with you.  Is it overly complicated?  If buying your product is tougher than necessary you give your competitor a simple way to improve over your service in a way that is meaningful to the customer.  Could you make the process friendlier and thus incent your customer to come back and buy from you more frequently?

 Need an idea to get you thinking?  Look at how we buy books.

 Book Store – Drive, park, walk in, find section, hopefully find the book, wait in line, listen to the rewards program card speech, buy the book, walk to the car, drive home.

 Amazon.com. Type in the name of the book, hit the 1-click order button. = easy.

Want another one?  Look at what Domino’s is doing to simplify the buying process.

How many hours each year do we keep new sales representatives cooped up in a room somewhere loading their minds with product information?

 Probably too many.

 The better question is how much time is spent teaching new sales representatives how to use that product knowledge?

 Would you like to field “smarter” sales representatives and help the middle 60% of your sales force close more opportunities?

 Then we need to look at how we build actionable product knowledge into our sales representatives in our efforts to get them ready for the field.

 Having sales minds loaded with product knowledge, in and of itself benefits no one, not even the “loaded” sales representatives.  It is in fact, a cost.  It is in the application of product knowledge to customer problems that value is realized for the owner, sales manager, sales representative and customer alike.

 In practical application, we have to load sales minds with product information, but we should spend at least an equal amount of time, if not twice that, training them how to wield the new weapon they have been given.

Moving From Product Knowledge to Actionable Product Knowledge

 Put your new sales representatives and the “middle 60%” of your existing sales representatives in role playing situations that force them to ask questions, a lot of questions, to uncover what issues a client might be facing.  Help them shape their questions and truly understand both the answers and the ramifications of those answers they get back.  Teach them questions that have answers tied to your products features.  Educate them with questions that will uncover problems the majority of your prospects have in common.  Teach them the questions that will help them locate problems your product solves that your competitor’s cannot.  Teach them the questions to ask when you are at a competitive disadvantage.

 Begin by teaching them a product feature, then teach the problems solved by that feature, and finally teach them the questions to ask to uncover those problems, if they exist, in your prospect’s business.

 Once the questions have been asked an equally important step is what to do with the valuable answers provided.  Show the sales representatives how to turn those answers and the problems those answers uncovered, into creative solutions built with your products and services with role play.  In the advanced form of this training, add time, budget, and political constraints they have to work around.

 Write case studies on your past performance, good and bad if you can stomach it, to help your sales representatives see real problems your company has identified and real solutions you have developed in the past.

 To keep your training relevant, have your new sales people travel with your Top 20% on new sales calls with the express objective of writing down questions they hear and the answers provided.  Review the trainee’s notes with the sales veteran’s perspective to make sure the new sales rep understood the conversation and was able to accurately translate what he heard.  Incorporate anything new and fresh into the ongoing training program.

 There is no value in being a talking brochure.  That ship has sailed.  No one cares what your product can do; they only care what your product can do for them.  Talking about features and benefits with a prospect just comes across as noise if the features/benefits are not relevant to his situation.  Smart questions bring clarity.  Clarity allows for accurate custom tailored solutions designed to solve specific client problems and answer the biggest unspoken question your buyer has, “What’s in it for me?”

Image courtesy of http://www.craigharper.com.au

I found myself in Walmart today finishing up some pre-Easter shopping and as I was waiting behind a lady with 27 items in the 20 item checkout lane I started thinking.

 Walmart is still making money and growing when the majority of their competitors’ sales are down by double digit percentages.

 What immediately comes to mind is the fact that they are the perceived “low price leader.”  That can’t be right though, because I have long accepted as fact that a strategy of being the “low price leader” is not a strategy that can sustain a business in the long run because low price strategies only hold up until the next guy shows up with a lower price.

 She still has 15 items in her basket.  How did she cram so much stuff in that little carry around basket?  No barcode on the Easter apple cover looking thing… 

 Walmart uses a host of strategies to be sure, but there are at least two that came to mind that are worth copying, and neither involve cutting your prices and praying for volume sales.

 1.  Walmart puts a relentless focus on finding any efficiency they can to get a product from the manufacturer to their distribution centers and ultimately their stores.  (They forced the issue with Electronic Data Interchange, or EDI, now an industry standard, and have recently nudged cereal companies to make smaller boxes that hold the same volume to reduce shelf space and paper waste among other things.)  As a result, it costs Walmart less to get a product on their shelves than it does their competitors, so an item for sale for $9.95 at Walmart and X Brand stores will likely have a lower true cost at Walmart.

Where competitors cut their price and profit to get in line with Walmart prices, Walmart cuts their cost, sells it for less and still makes more money doing it.

 
2.  When Walmart began, Sam Walton had a radical idea of putting stores in towns that were deemed too small for other major retailers, effectively going where the national competition was not willing to go.  This strategy continues to pay off even today as major retailers fight it out in every major metropolitan market, including Walmart, but Walmart has hundreds of stores in markets where there is no real competition and where future major competition is unlikely. 

 She has 7 items left in the basket, looks like egg dye, bubbles…

 Where can your costs be cut or efficiencies found between the idea stage and final sales/delivery? 

 Can you buy from your manufacturer/distributor differently to garner some savings?  Can you consolidate to a single distributor or is it time to see how hungry your distributor’s competitors are?  Maybe join a larger buying group?  Partner up to buy bigger shipments to get to the next break in tier pricing?

How many hands have to touch the products you sell or the orders for those products?  Is there an opportunity to negotiate, automate or eliminate some duplication?

 Look at your Cost of Sales.  Without damaging customer service, what is the most efficient, least time consuming way to sell each of your products?  Now, how are you selling each of your products?  Any appreciable room for improvement?  What admin tasks could you off load from your sales team to get them more customer face time?  Click here if you would like to go a little bit deeper discussing Cost of Sales.

 2 items left.  Why do they always put the slow Checkers on the Express lane?

 How can you follow Walmart’s example of having a presence where there is no real competition? 

 Is there a niche where you can plant your flag, dominate, and protect your margins?  Can you create that niche by building a rabid referral customer base like Joe Girard did?

 She is helping the Checker sack her goodies.  Finally.  At least she is helping sack the items.  There should be a faster way to check out when you only have a handful of things.

*beep*  *beep* *beep* Scanned, paid and done.

 “Sir, next time you could use one of the self check out stations if you are in a hurry.”  My Checker said.

 Guess that is a sales lesson I won’t be blogging about.  Too busy thinking.

 “Thank you for shopping at Walmart!”

Image courtesy of RichSellsHomes

Q&A’s are excerpts of questions I have answered as part of Sales Laundry or other forums that I am apart of.  If there is a relevant sales message for the masses I post it here to share, gather feedback and discuss.

Q:  Channel Sales & Direct Sales Teams:  What are your thoughts on best practices for structuring a sales team that maximizes sales for both groups and minimizes/avoids conflicts.

A:   I don’t know your specific industry,  but my experience comes from technology, so that is how I have framed my comments.  Here are my general thoughts:

The Direct Sales Team

 Dividing the loyalties of your direct sales team between their own numbers and helping out the channel sales organizations can be a recipe for disaster.  If times get tight, I have seen direct guys pull all sorts of tricks to take a juicy channel deal direct.  The hedge to that is a partner deal registry and clear rules of engagement, neither of which is ever a bad thing.  On the other side I have seen channel partners act like blood sucking leaches, draining a manufacturer of resources and continually begging for leads.  It can get ugly either way.

 I would seriously consider putting a dedicated sales resource in your office supporting your channel partners exclusively. 

 You need your channel organization to spend the time and money needed to get trained up on your products and dedicate enough mindshare to them to get them heard above the noise of their other offerings.

 Use your internal dedicated sales resource to go on sales calls with them and help them put sales proposals together and nudge them along the sales funnel.  Force the dedicated channel sales representative to drive all revenue through the partners.  That way you have someone other than your Channel Manager working in the channels best interests on a daily basis.  Put a smart sales person in that role that can leverage the legitimate leads and deals that he uncovers in his patch into incentive for the partners to get up to speed and stay current.  You can use the leads to reward those partners that are moving the needle for you, for priming the pump for new partners or as needed to help steer your channel sales force.

 This dedicated sale representative can also be a good entry level sales position for your company in more established territories that you can develop into a direct role if the compensation model works like that for you.  That way they have your channel supporting them a bit as they come up to speed so you don’t have the huge dips in productivity when a new guy takes over a territory.

 Your dedicated sales representative should support your best partners and their best reps to keep the pipeline full, then spend time working your best partners second tier reps, other partners and finding new partners that are not going to stomp all over one another in a given geography.  Cut the bottom 20% of your partners and all those 1-off deal guys that pop up.

The Channel Sales Team

 Channel organizations are often times the whipping boys of the direct sales team and feel they drive product sales but have no real line of communication with the manufacturer to discuss strategy or to communicate feedback they get from the field.  Listen to your channel.  Typically the top 20% of the reps at the top 20% of your channel partners are driving the majority of your business.  You need to talk to them and understand their challenges with your organization if you want the real scoop.  The execs are usually not as helpful in the day to day stuff and Sales Managers are sometimes in the weeds because they were great reps that got promoted without any training.

 Give the channel a mechanism to register their deals and be protected from your direct reps.  Give them ready access to sales and support until they have their own resources trained and representing your brand well in the field.

That is about 1% of the topic.  You can check out The VAR Guy for dedicated blogging on technology channel sales.

I got some great responses on both the article and the survey at the end of the “How to get Referrals & get Them to Work for You” article, so I decided to share one more story that should motivate you to get moving.  This story is particularly interesting because this story takes place in economic conditions like we are seeing today.

 Salesman Joe Girard is our main character.  Many of you may have heard of him, but for those that have not, listen up.

 Joe never finished high school and bounced around from job to job until he ended up in Michigan begging a Sales Manager of a Chevrolet car dealership for a sales job.  Joe got the job and sold his first car that day and borrowed $10 from his Sales Manager to buy groceries on his way home.  The dealership owner fired him two months later after having sold an amazing 18 cars because the other salesmen complained he was being too aggressive.

 Based on his new found success, Joe found employment at Merollis Chevrolet and began a legendary career that would put him in the Guinness Book of World records and earn himself a spot in the Automotive Hall of Fame in 2001.   He is the only sales representative in the Hall of Fame.

 Joe Girard, according to the Guinness Book, sold more new cars and trucks on a one-to-one basis (that is retail, to people like you and me, not wholesale or fleet cars) than any other sales representative in the world, and then repeated that feat 12 consecutive times.

 Over 15 years he sold 13,001 cars or roughly 17 cars every week for 750+ weeks.  In his best year he sold 1,425 cars, or between 5 and 6 cars a day, depending on how many days he worked a given week.

Here is the best part.

 In 1974, during a major recession, unemployment at 9% (today it is hovering around 8%,) oil was in short supply, gas being rationed, not sold, (see picture) the consensus was you could not sell cars.  Joe only sold 1,376 that year, or roughly 27 cars a week!

 How did Joe sell so many cars?

 As you might have guessed, primarily by referrals.  Long before email and the personal computer Joe sent a handwritten card to every single person on his list, every month, just to let people know he was still out there selling cars and thinking about them.  No promotions, no advertisements, just hand written cards.

 Joe referral system was so successful he personally hired two assistants to help him pre-screen his customers, manage his appointment-only sales schedule, and assist him in writing 500+ cards every day.

 One simple idea, staying in touch with people and letting them know you care about them executed by mailing each person one card a month put a sales representative named Joe in the Guinness Book of World Records as the best car salesman of all time.

 Imagine what Joe could do with the technology we have today.  Better yet, imagine what you can do, and then do it.  What one simple step can you take to start building a referral generation system for your business?  It does not have to be impressive, worst case just send a card.

 Let me know what you come up with.

•  Want to see what the stock market in 1974 looked like compared to 2008, see the graphs here.
• Learn more about the best car salesman in the world, Joe Girard.
• Cartoon image courtesy of http://www.automation.com
• Gas coupon image courtesy of Wikimedia

Remember when you only had to find and fill a Need to get a sale?

 Remember the good ol’ days when the sun was shining and everyone including our clients were augmenting their budgets with bags full of cash that randomly fell out of the backs of garbage trucks, freely spending bucket loads of money on big, medium and small needs alike? 

Me either, but don’t tell the new guys.

Today, clients aren’t spending their money so freely and sales are down, but the good news is we are saving a lot of money on printer ink because these forecasts are just so much shorter.  Apparently the majority of our clients do not have any needs that need filling right now, so what is an enterprising Sales Representative to do?

 Stop looking for needs.  Start looking for agony with flaming critical, heart ripping consequences.

 Corporations are the legal equivalent of people, so if it helps, look at them that way to get a better understanding of how to approach them.  Think “injury” here.  

You can live without a Band-Aid, it may not be as neat and tidy, but you can live.  Think bigger.  Start looking for companies in Intensive Care Units, needing your product in order to survive.  Those needs will get addressed, because if they don’t fix them, they die or face catastrophic game changing consequences.

 “But Val, I sell fly swatters, if they don’t buy my product the worst thing that happens is there are a few more flies buzzing around, how does that help me?”

 Maybe you change your message from “Get rid of an annoying pest” to “Avoid diseases that flies transfer from dung heaps and decaying matter to your food that can lead to kidney failure in young children, seizures in toddlers, or in some cases, death*.”

 If your customer’s are not buying, it is because the need your product is filling is not a real or percieved priority right now.  Change the priority, change their perception, find a client with a bigger need you can fill, or find something else to sell.    

Want another example?  Look at what Kellogg is doing to reposition Mini-Wheats.

If you are stuck and can’t think of any deeper problems, add a comment and I will give you my best ideas, otherwise watch for a post in the near future that will detail a step by step process to help you find those deeper problems.   

*I am not making this stuff up.  Read Diseases from House Flies.

As a sales person you need to read “What does better mean?” It is a very short article by Seth Godin that will take you one minute at the most to learn a lesson it took me a long time to figure out.

 His message is aimed at marketing types, but the message hit me right between the eyes in its simplicity.

 Which is better Microsoft Office or Open Office?  Google or Live?  Firefox or Chrome?  Coke or Pepsi?  McDonalds or Burger King?  Best Buy or Circuit City?  Ok, winner declared on that last one.

 While you may be selling version 2.0 or version 10, just because Marketing, the CEO, you, your Sales Manager, your mother and the mailman all say it is better absolutely does not mean that it actually IS better to the one person that matters.  That would be the one making the purchase.

 So the next time you find yourself thinking  “How could they not see that our solution was OBVIOUSLY better?” you should have a better answer as to what went wrong than the one you have today.

 You thought you were selling something that was obviously better, you just did not make sure it was obviously better to the buyer.

In the battle of which is better, the buyers “better” always wins.