As I work with my clients, I’m astounded at how many senior salespeople don’t do sales call planning, and today my friend Jack Malcolm wrote a blog that explains why. You can find it here.

What Jack says is that senior sales folk think they are so good they don’t need to plan. Here’s news to those of you that think that: You’re wrong. Here are a few reasons why:

1. If you don’t know in detail what you’re trying to accomplish, you won’t know whether you had a good call or a bad one.
2. Without a plan, you risk wasting your prospect’s time, and they will not put up with that for long.
3. If you are not planning your sales calls, you can’t link them into your account or opportunity strategy – so you have no strategy.

Sales call planning is an easy thing to do, and gives you huge leverage in your sales calls. Every really good salesperson I’ve known over the years has planned sales calls – and most of the mediocre salespeople I’ve known, and every salesperson I’ve had to fire, have not.

Read Jack’s post, and if you recognize yourself, do something about it and start planning your calls.

Prospect: “I saw your product on your website, and it seems like it might be a fit for us. Would you give us a demo so we can see if we’re right about that?”

Salesman: “Sure, I’ll be glad to do that. What caught your interest when you were on our website?”

The salesman will never have more leverage to ask questions about what’s really going on in the prospect’s world than in this beginning conversation. The prospect wants something that only the salesman can provide – the demonstration – and the salesman can set the terms under which he will provide it. Once the salesman provides the demonstration, he loses this leverage. So even if the prospect pushes for an immediate demo, the salesman must politely refuse until he understands enough about the prospect’s problem to provide a compelling demo.

The salesman needs to obtain two agreements from the prospect at this point:

1. An agreement that the prospect has a problem that is worth solving – and an agreed definition of that problem,
2. And an agreement that there is a cost associated with not solving that problem – and an agreed estimate of what that cost might be.

Obtaining these agreements requires the salesman to explore the prospect’s reason for calling, and to help the prospect define and quantify the problem he is trying to solve and the goal he is trying to accomplish. At the end of this conversation, both parties know whether there’s a reason to continue talking, and more importantly, what the next conversation and the demonstration will be about.  This conversation ends with:

Salesman: “Let’s schedule a demonstration for later in the week – I’ll be sure that I show you the parts of our product that directly impact your problem, and we can figure out how to proceed from there. Is there anyone else in your organization that should be part of this next meeting?”

Prospect: “Yes, I’ll invite Mary and John, and I’ll brief them on our conversation. This seems to be a more important issue than I’d thought, and I’m eager to see how your product addresses it.”

The demonstration is now being orchestrated by the salesman rather than the prospect, and has a clear objective. The prospect is involved at a very different level than he was in the first case, and instead of looking for things to object to is looking for ways the product solves the problem and delivers the financial benefit. You might also notice that the price question has gone away, because the focus is on the outcome and the benefit.

Another really important point is that the salesman continues to have the leverage. At the beginning of the demo, he will be able to set the agenda for what happens after the demo. The chance of success is much higher than in the shortened sales cycle in my last post.

So, watch out for the shortened sales cycle, obtain the two agreements, and then show the prospect how you can deliver the solution and the financial benefit.

The conversation would go something like this:

Prospect: “I saw your product on your website, and it seems like it might be a fit for us. Would you give us a demo so we can see if we’re right about that?”

Salesman: “Sure, let’s schedule an hour later this week and I’ll show you the product. I’m sure you’ll be impressed.”

The presentation and demo take place as scheduled, with the salesman doing his best to show the prospect all the features and benefits of the product.

Prospect: “That looks pretty good. What will it cost us?’

Salesman (reluctantly): Well, I really don’t know enough about your situation to give you a good idea of price.”

Prospect: “Well, we really just need a ball-park idea so we can decide how we might implement. We won’t hold you to it.”

Salesman: “Well, OK… the range is between $25,000 and $40,000, depending on a number of variables we haven’t defined yet. We should schedule another meeting to explore what you really need, and then I’ll be able to give you a more precise number.”

 Prospect: “OK. We’re really busy for the next couple of weeks – I’ll get back to you to schedule the meeting.”

Salesman: “OK, if I haven’t heard from you in a couple of weeks, I’ll give you a call as well.”

The sales opportunity then goes into what I call an “infinite sales cycle” – repeated phone calls and emails get no response from the prospect, and what looked like a pretty good opportunity in the beginning ends up being a frustrating time waster. So, what went wrong?

What happened is that this opportunity went through an entire sales cycle in two sales calls. Here’s what really happened in the conversation….

Prospect: “Can I see the product?”

Salesman: “Sure. Look at this.”

Prospect: “How much is it?”

Salesman: “25 – 40K.”

Prospect: “Thanks.”

The prospect finds out everything they want to know from the salesman, and the salesman doesn’t find out anything from the prospect. The salesman doesn’t know what problem the prospect is trying to solve, what the cost of not solving the problem might be, and what the prospect is trying to accomplish. He has no chance of demonstrating any value his product might bring to the prospect. He’s letting the prospect do his work for him – and the prospect is likely not competent to evaluate the product and its effects on his operation. The prospect ends up with no compelling reason to move ahead with an evaluation, and decides not to spend any more time on it.

This is a tremendous disservice to both the salesman and the prospect – the salesman doesn’t get an order, and the prospect is missing an opportunity to solve what might be an important and expensive problem. In my next post, we’ll see how to avoid the short sales cycle problem and actually help the prospect solve his problem and help him accomplish his goals.

When you build a value process instead of a value proposition and work to achieve the four agreements with your prospect instead of presenting and demonstrating your company and your product, you will generate a “win” for both you and your prospect.

Your prospect wins:

• Your prospect reaches a better understanding of the problem he’s trying to solve – actually, in some cases realizes that a nagging situation that seems to be” just the way it is” is a problem that has a valuable solution.
• Your prospect works with you and uses this understanding to arrive at a better solution than he would have if he had gone through a traditional vendor evaluation.
• Your prospect has a clear understanding of the outcome and the value he will receive for his investment – and will be recognized for that in his company.
• Finally, your prospect starts to build a valuable vendor relationship with you as the solution gets implemented.

You win:

• First, of course, you get the order.
• You attain a better understanding of your prospect’s business, of the problem you will be solving, and of the outcome you will be providing your prospect. You will be providing a better solution, you will have a smoother implementation which should lower your cost of delivery, and you are much more likely to have a delighted customer in the end.
• You will have differentiated yourself from your competition along the dimension of value versus investment. This allows flexible pricing and gets you higher margins for the solution you provide.
• Finally, you have created a superb reference to use as you work on your next sale.

As you can see, moving beyond a traditional “Value Proposition” and thinking about a value process instead, can provide significant benefits to both you and your prospect. The value process will also help you attain a much higher closing percentage as you qualify early and work closely with your prospects.

It’s a small but fundamental change in the way you sell that will provide big results.

As always, I welcome your comments, arguments, and analysis.

1.       Value is defined by the prospect, not by the salesperson.  Just because you can build an ROI spreadsheet that shows how the prospect will benefit doesn’t mean the prospect will see value. This is true even if you have provided huge value to companies just like this prospect – if there are 100 identical companies in a market segment and you are doing business with ninety-nine of them, the initial reaction of number 100 to your ROI presentation will be “MY business is different.”

2.       There is no solution without a problem. This seems obvious, but it’s not. If the prospect does not see she has a critical problem to be solved or exceptional opportunity to be grasped, she will see no value to your solution, however powerful and elegant it is.

3.       If the prospect, with your assistance, can’t quantify the cost of not solving the problem or grasping the opportunity, it is impossible for you to establish the value of investing in your solution.

4.       The real value isn’t about the features of your product, or even the solution to a problem – it’s about the outcome the prospect achieves and whether the benefit of the outcome is significantly larger than the investment required to achieve it.

5.       Value is not something you can pitch – you must develop it together with your prospect.

So a sales approach that assumes a prospect will buy because they are convinced by a “value proposition” that you present to them is just not going to work very well. This is true even if the value proposition is well thought out and based on real problems that you know your prospects have.  Given this,  how do you implement a process of building value?

Building value is a cooperative effort between you and your prospect. It requires that together you discover, identify, and quantify a critical problem that your product can help solve or opportunity that you can help your prospect grasp. It’s a discussion, not a presentation or demonstration. You may even be helping your prospect discover that a difficulty that has been seen as “just the way we’ve always done this” is really an opportunity to use your product or service to provide an outcome that makes things significantly better.

So how can you manage this discussion to progress toward a decision to purchase your product – or to quickly determine that you can’t help this prospect and should move on? A method that my clients have used with great success is built around the idea of arriving at a series of four agreements with their prospect. As you will see, each agreement builds on the previous agreements, and each offers both the salesperson and the prospect the opportunity to decide either to continue or abandon the discussion.

Here are the four agreements between the salesperson and the prospect:

1.       We agree that the prospect has a problem that is important enough that we need to continue to explore it. This agreement establishes that there’s a reason to spend some effort thinking about the problem and allows you to continue the conversation.

2.       We agree that the cost of not solving this problem is significant enough to consider investing in a solution. This is the key agreement. It quantifies the problem and establishes the context in which the prospect can justify investing in your solution.

3.       We agree that there might be solutions that would solve, or at least mitigate, the problem. This is the “what if we could” stage of the discussion. You are exploring ways that the problem might be solved. It’s important to note that you are NOT pitching, demonstrating, or selling your solution at this point. You are acting as a part of the prospect’s team, continuing to discuss whether or not it is worth investing in a solution to this problem. You are also broadening the scope of the problem discussion to be sure all the positive effects of solving it are being considered, and that all the costs of not solving it are understood. This agreement establishes that the benefit of solving the problem significantly outweighs the investment required to solve it.

4.       Finally, we agree that your solution offers the best solution to the problem. This is where you use the presentation and demonstration you have customized for this prospect and problem to convince the prospect that you can provide the best outcome as you help solve the problem.

If you are able to obtain these four agreements from the prospect, you have an order. It’s as simple as that – it’s not easy, but it works. In my next post, I’ll discuss why this works, and how using this value-building process benefits both you and your prospect.

In this series of blog posts I’m going to examine how you can increase sales by changing the way you approach your value proposition and begin really building value for your prospects and differentiating yourself from your competitors.

In the good old days when cars had carburetors instead of fuel injection, the back pages of magazines like Popular Mechanics were loaded with ads for devices that bolted on to your car and promised to increase your gas mileage by 10%. It all sounded great until you did the math and realized that if you bought 11 of these devices your gas tank would start overflowing and you could sell gas instead of buying it. The interesting thing about this realization is that once you figure out that the aggregate of the offers is clearly BS, you quickly conclude that each individual offer must also be BS. So the “value proposition” in individual ads is really working against a sale instead of for it, because the buyer is hearing the same thing from everyone and doesn’t believe anyone.

A lot of marketing “value propositions” share this flaw – and detract from the sales effort rather than help it. The result is that companies who have incredible products struggle to generate consistent profitable sales. A lot of this is due to every value proposition sounding like every other value proposition.

Most often, the problem is that the “value proposition” is developed from marketing’s point of view, not from the customer’s point of view. It’s built around the problem we think the customer ought to have, and the benefits of solving that problem with our product. At its base, this approach takes our product’s features and manufactures a structure of advantages and benefits around those features – and then figures out the customer problem that fits us. Now, I know that a lot of products and services are invented to solve problems either the inventor or some set of potential customers actually have, but that doesn’t seem to change the way these companies build their “value propositions.”

Companies that build their “value propositions” this way will encounter prospect resistance to their sales pitches, ROI analyses, and demonstrations. The prospect just doesn’t believe that the product or service is compelling enough to justify the price. Generally, that’s because the seller has not established value in a way that connects with the prospect. Somehow, the “value proposition” is not having its intended effect.

In the next post in this series, I’ll talk about how you can create real value for your prospect as you sell. What you will end up with is not so much a “value proposition” as a process that helps your prospect see and quantify the value you are bringing to her business.

I was looking at the new Jeep Grand Cherokee, and wondered whether I could order one equipped exactly the way I wanted, so I found a sales guy …

Me: Is it possible to order a Grand Cherokee equipped exactly the way I want – like with cloth seats and a sunroof?
Sales Guy: We have 58 of these on the lot, and I’m sure we can find one just like you want.
Me: ………
Sales Guy: The Grand Cherokee was rated the best in three different magazines, it’s a great car.
Me: ………..
Sales Guy: We’re the biggest dealership in the Northwest, we sell 8 of these a week.
Me: ………

The “conversation” went on like this for at least five minutes until I finally left – without the answer to my question. Now I’m sure that all of you can see that my first question should have raised a big flag for this sales guy – here’s someone who is interested enough that he’s talking about actually ordering a car. And he missed his opportunity, because based on what happened, there is no way I’m buying a car from this guy.

Let’s look at a short version of how this conversation might have gone if the sales guy was remotely interested in understanding what I wanted:

Me: Is it possible to order a Grand Cherokee equipped exactly the way I want – like with cloth seats and a sunroof?
Sales Guy: That’s certainly possible. How would you want the car equipped?
Me: I want all of the off-road stuff like skid plates and locking differential and the tow package – and I don’t want a lot of the stuff that you package with it, like leather seats and a nav package.
Sales Guy: So you must be a real off-roader.
Me: Not so much – I like to get out in the mountains, like on logging roads, and want to have the right stuff for that.
Sales Guy: Why is it that you don’t want leather seats and so on?
Me: I don’t need them and don’t want to pay for them.  So how hard is it to order one like I want?

(Now I want to break into the conversation to examine what is going on for the Sales Guy.  He really doesn’t want to have to order a special car for me, for some good reasons. First, it is a pain in the butt to manage a special order; second, he won’t get paid until they deliver the car, which could be a couple of months; third, his boss wants him to sell cars off the lot and reduce the inventory; finally, he probably makes more money selling the one on the lot. On the other hand, I’m a hot prospect, and he doesn’t want to lose me. )

Sales Guy: How soon do you want the car?
Me: I’d like to have it for the rest of the ski season.
Sales Guy: Well, to answer your original question, we can certainly order the car, but there might be some downside for you if you did that.
Me: Oh? What downside?
Sales Guy: The first thing is that a special order takes at least a couple of months to arrive, so you’d miss most of the rest of the ski season.  The second is, that I don’t think there’s any way the dealership would give you the kind of discount you’d get on one of the cars we have on the lot, so the bottom line might be that you don’t save any money by eliminating the features you don’t want.  The upside, of course is that you’d have the exact car you want. Let me ask you another question – are you looking for any particular color?
Me: Well, there are a couple I’m not excited about, but not really.
Sales Guy: Well, that might make things easier. Let me suggest something.  You and I could sit down and go over all the options and configure exactly the car you want, and price it out.  Then we could look at our existing inventory and see if we have a car that’s reasonably close to what you want, and see what kind of deal we can do for you. If we can put together a car and a deal that you like, we can go that direction – if we can’t we can go ahead and order a car if you’re ready to do that. What do you think?
Me: You know, that’s not a bad idea.

Well, obviously a different conversation and a different outcome – and it happens just because the Sales Guy expends the effort to understand what I really need and want so that he can see if there’s a way to satisfy both me and his boss. There’s really no downside for the Sales Guy here. He either moves quickly toward the kind of sale he wants to make, or he finds out I’m not a qualified prospect.

So, the lesson is an easy one. Once again, asking is a better sales approach than telling. And listening to your prospect to find out what is really going on is the secret to better selling.

By tightening your focus, you’ve built what I call an “unfair advantage”:

• You thoroughly understand the value you bring to your prospect, the problem you are solving for your prospect, and the outcome you are providing to your prospect.
• You are able to help your prospect understand the value you are providing as you help him solve an important problem, and the outcome he will experience by working with you.
• Because of this you are sitting on the same side of the table as your prospect, acting as a trusted advisor rather than as an adversarial salesperson.
• You have differentiated yourself both with the value and outcome you are providing and by the way you are selling – you’re not pitching products, you’re providing valuable outcomes.

Now let’s talk about your outcomes – what you’re getting out of this tightening of focus.

• Your salespeople are more efficient, not wasting time on “never happen” deals.
• They’re also more effective, with much higher success rates on deals they are pursuing.
• That means both your revenues and margins are increasing as you close more deals with a lower cost of sales.
• You have more pricing flexibility because you can price based on value rather than cost.
• You have happier customers, more referrals, and life gets generally easier.

Thanks for staying with me over the past several posts – as always, I welcome your comments, arguments, and interest.

Be sure to check out my book, “Small Changes” for a more detailed presentation of the ideas in these blogs.

On the surface, it’s an easy task; you just don’t let them sell to any prospect that doesn’t fit the ideal prospect definition. In practice, it’s a lot more difficult, because if you’re not careful you’re swimming upstream against human nature.

I’ll start by discussing the methods you can use to insure that you and your sales force are selling to the right prospects, and then talk about how to motivate the behavior you want.

The first thing you need to do is to provide them with the information and tools they will need to be successful using the new focus. Show your salespeople how you arrived at your definition of market segments; why these segments are more attractive than others; what the value proposition is for the segment; and what the new sales approach will be.

Then apply the discipline you’ll need to make the focus work. One way to begin is to assign prospects from the list you developed to each salesperson and limit them to working with those prospects. You should include weekly reviews of all opportunities each salesperson is pursuing and requiring them to show weekly progress on them. You might also withhold proposal assistance or not allow management sales calls on deals that don’t qualify. Whatever methods you use, you must discipline yourself and your sales force to concentrate on those high-probability prospects you’ve defined.

You can make your job a lot easier if you align your sales compensation structure with your new focus. You will not be successful if your salespeople think they can make more money by opportunistically chasing deals that are not in your new focus; you will always get precisely the behavior you pay for from salespeople. Here are some ideas to help you with compensation:

• Lower your commission rate on sales, and replace it with a significant bonus for each new target account sold. This will make selling to target accounts much more lucrative and attractive to your salespeople and will substantially reduce their level of interest in opportunities that are not in your sweet spot.
• Provide some kind of financial award for references from satisfied customers from your target list to further sweeten the pot for salespeople who are selling the way you want them to.
• Encourage the focus on these target accounts with recognition, praise, and awards to those who close the greatest number of new target accounts.

There’s one additional very important element to the motivational side of the equation. Management at all levels must be absolutely bought in to the new focus. You can’t have any recriminations from anyone when a salesperson walks away from what looks like a large opportunity that doesn’t fit the ideal prospect criteria. If management isn’t committed, your sales force won’t be.

Please leave your comments – I’d really like to know what you think of these ideas.

In this post, we’re going to make a big counter-intuitive leap. You don’t need more leads; you need to stop wasting your time selling to prospects that won’t ever buy.

Here’s how –

Quit selling to prospects that aren’t in your sweet spot.

Stop chasing deals that you’re not going to get.

Focus on what we’ll call your “ideal prospect.”

In my last post I said that your value proposition only works in the tight market segment you are focusing on. The next step is to focus even tighter by defining your “ideal prospects” – the companies in that segment that are most likely to agree with your value proposition and buy your product. Here are some ways to think about who your ideal prospects might be:

Your best current customers should be the model for your ideal prospect. After all, they are the ones that are receiving value from you now. There will be a lot of differences between them, but I’ll bet you’ll find a group of them that are very similar. Focusing on their similarities will give you a good start on your ideal customer definition.

You should also think about a number of other factors as you narrow your focus. For instance, what geography do you want to cover? Are you better at working with large companies or small companies? Where have you built really exceptional expertise in delivering your product? Where do you have the best competitive advantage? Be very specific in your answers – “Within 50 miles of a major airport in the 11 Western states” is better than “Western US” for a geographic definition.

The goal is to be very specific in defining a set of criteria that identify prospective customers who are most likely to understand and agree with your value proposition. You can build a list of companies who are high-probability prospects, and the list will also become a tool that allows you to quickly qualify incoming leads and pick out the ones that you want to concentrate on.

The payoff for spending all this effort is that you maximize your use of your sales resource. Every minute spent with a prospect who ultimately does not buy because they don’t see the value of your offering is a minute that could have been better spent with one of the high- probability prospects you have defined – and these wasted minutes can add up to huge lost opportunity costs.

Now comes the hard part. To make this work, you must stop selling to anyone who doesn’t fit the ideal prospect criteria. You have do this even though you see a potential big deal, and the prospect is telling you they like your product, and you aren’t meeting your sales goals this quarter, and you don’t have another good “sweet spot” prospect right now. You have to walk away and focus your sales efforts on the set of ideal prospects you have defined. Why? Because you’re going to lose a high percentage of the deals that you chase that don’t fit the profile, and you can’t afford to do that. You must spend your selling time with your high-probability prospects where your closing percentages will be much higher. You are better off prospecting for these high-probability deals than you are chasing the low-probability ones.

Here’s the important point: A tight focus on prospects that fit your value proposition will provide you significantly more sales than chasing a larger number of prospects that don’t see your value.  Doing this takes exceptional discipline, but it will pay off big time.

For more detail about how this works, see Chapter 2 of my book, “Small Changes.”

And as always, I welcome your comments and your ideas.