There are all sorts of allegories for sales. Hunting, farming, fishing, and a large list of others. They all seem somewhat out-doorsy and active (as opposed to passive – waiting for something to happen), but I think you get the point I’m making. Sales also seems to run in streaks. Some days it seems you can’t miss and all you need to say is “sign here, press hard for three copies”. And other days it doesn’t seem to matter what you do. You don’t seem to be able to close a door, let alone a deal.
We all like to think that it is superior salesmanship, or possibly a break-through product or technology advantage, when sales are good. We also like to point to inferior marketing and support, or a weak product offering when sales are not up to expectations.
When sales are not up to desired levels, it is usually left to management to blame poor salesmanship for the results, since both product technology and support are not readily changeable items in any short-term drive to improve sales.
I think the reality of sales booms and sales busts are more associated with those factors that either occur or evolve on a market wide basis. The deregulation of the mortgage industry led to an explosive growth in housing sales as people could then buy more house than they could normally afford, via balloon payment type and other exotic mortgages. This worked well until payments came due and real money was not available. The well documented housing bust and broader economic recession ensued.
Going a little further back into the end of the last century, was the telecom boom associated with deregulation. Companies suddenly found themselves with the opportunity to enter communications markets that they had previously been restricted from. This market attractiveness was further exacerbated by all equipment supplier’s willingness to lend these new companies the funds that they would need to by their equipment to enable access into these new markets.
This too worked well until the then new market was flooded with new competitors. The result was that there was not enough business to go around and no one had the real money needed to make their loan payments on their equipment. The well documented telecom bust then ensued as well.
In both of these examples, as well as many others across many other industries (banking, oil, etc), there were some very good times to be in sales, which were then followed by some very trying times to be in sales. It didn’t really matter what your individual effect on the sales process was.
I bring up these kind of market wide events not because I want to examine them, but because I want to exclude them from any discussion regarding why customers may, or more importantly may not be buying now. When various markets are thrown out of equilibrium by any number of market affecting legislative changes or other events, it seems that standard sales logic just doesn’t apply – usually to the eventual detriment of all involved.
I want to briefly look at why in a stable market, sales may not be achieving your desired goals.
I think that when you look at sales there are basically three aspects that need to be in place to be successful. Some may point to a multiplicity of other factors, but I think when you net them all out, you get back to these three basic ones.
The first is relationship. I know. This is trite. Relationship blah, blah, relationship. There is a reason everyone says it is important. That’s because it is. Do you trust the guy that sells you a car? No? That’s partly because you know that once he sells you a car, you are no longer his problem. You are the service department’s problem. He is probably not going to talk to you or try to sell you anything else for a while, unless you decide you need another car.
In the business to business sales world, most sales people cannot achieve their targets by simply selling something to a customer every three or four years. They have to face their customer continually. What they do after the sale is probably more important than what they do before the contract is signed. That is if they hope to get another sale.
That is how a relationship is built.
The second is the ability to solve a customer’s problem. It might be a problem they didn’t know they had. Faster, better, cheaper are always items that come to mind. Understanding what a customer wants to do as well as why they want to do it are keys here. It is in essence providing an answer to their question.
The third is providing the customer with the proper reason to buy your solution. This is usually known as a business case. If you are ten percent faster, but twice as expensive, is this acceptable? It’s hard to say at this point without more information. However, it’s a much easier decision if you are ten percent faster and the same price as a competitor.
Having a great relationship with your customer, and a great product are no longer enough. There must be a strong enough financial reason for a customer to buy. The customer must expect a sufficient return on the monies that they invest in a product in order to get them to spend those monies.
This customer return can take several forms. Does it reduce their costs of operations? Does it allow them to gain more customers? Does it allow them to get more revenue from their existing customers? And just as importantly, when does it allow them to recognize these returns. These are all very definable and quantifiable numbers.
If they are not, then in today’s business climate and environment, you may have an issue closing a sale. Quantification of customer value is rapidly becoming the key to sales success.
It should be noted that saving a dollar this year is far more preferable than potentially saving ten dollars, five years from now.
It seems that suppliers can get seduced by the elegance of their own technical solutions to their customer’s problems. They have a tendency to forget that just because what they are offering may be technically better than what the customers may currently have, that no longer means that a sale is assured. If the customer cannot identify the quantifiable benefit and returns associated with the proposed purchase, and when these returns can be expected, then the expectation should be of a difficult or delayed sales process.
Just because they trust you and what you are offering is better doesn’t mean they will buy it.
It appears that it is more and more about money, and more specifically today’s money when it comes to sales. Preparing for future opportunities, or addressing potential opportunities, or enabling future applications may no longer be a good enough reason for a customer to part with their limited amount of funds set aside for such expenditures. Customers are recognizing that if the sales discussion involves future benefits to them, then it also means that the actual purchase decision can probably be delayed to that future time when it coincides with those future benefits.
In today’s business environment, if companies are going to spend their money, they need to know what they are going to get in return. Not just the product or service that they are purchasing, but the quantification regarding what the purchased items will mean to their bottom line. How much of a reduction in costs. How many more customers. How much more will they be able to charge.
If today’s product will enable an as yet undefined application or future capability, then it is probably wise to assume that today’s customer may in fact wait to purchase that product until that future application or capability is defined and the market for and value of it can be quantified. Being bigger, better and faster for the sake of being prepared for the next big thing and the potential associated end user demands that go along with it, is probably no longer going to be a good enough reason to purchase.
If your customers aren’t buying, and there is no discernible, market wide issue causing a broader customer industry slowdown, then it is probably a good guess that the appropriate customer spend business case has not been made or met. As markets evolve to this technical solution – appropriate business case model, the solution price will remain a key aspect of every opportunity, but not so much from the aspect of how much a customer has to spend, but more from the point of view of how much the proposed solution must recoup in value for the customer, and as previously noted and just as importantly, how long it takes the customer to recoup it.
It is also possible that this lack of an appropriate specific return customer business case can turn out to be the broader customer industry slowdown, since all customers seem to be heading this direction. It can also depend on the relative competitive starting point for each customer in their respective markets.
It doesn’t seem that being bigger, better, faster or prepared for the next new thing will remain as good enough reasons for customers to buy. It appears that it will not be what the proposed customer solution operationally or technically does, but more what it financially does for the immediate benefit of the customer’s bottom line that will be the purchase decision criteria.