Category Archives: Sales

Alignment, Focus, Implementation, Long Term, Sales, Uncategorized

From Anything to Something Specific

Leave a comment

I really tried to take a break from putting out anything this week. The problem was that the closer I got to the end of the week the guiltier I began to feel at not writing anything. I tried to convince myself that my public would be disappointed at missing their weekly fix of my views on business and sales, and indeed I actually did get a question from a reader as to where was my post. However, the truth be told, it seems I am a creature of habit, and I am in the habit of providing my views on things, regardless of whether they are appreciated, or even requested, or not.

Oh well.

It was interesting that I wrote about golf last week, and then Tiger Woods announced his return from injury to play in this week’s tournament. This is a little bit interesting on several levels. First it is always interesting to have Tiger Woods in the field at a golf tournament. Love him or hate him he does draw interest. For me it’s a little bit more than that. Tiger Woods has always had a game plan whenever and wherever he plays. His preparation is the stuff of legend. In essence he plans his work and then works his plan. And he seems to do it better than just about anyone else. He has set the standard, whether it is on his recoveries or in standard execution.

Except this time. He acknowledged that he was not in optimal playing condition and has not prepared and practiced as he has before on previous recoveries, and that he was going to “play himself into shape”.

Many attribute this decision to the proximity of the next major golf tournament and Tiger’s pursuit of the record for the most major wins in a career. If this is truly the case then his latest move in returning to golf in a relatively unprepared state has a certain air of desperation around it and desperation in any endeavor, be it golf or business, is a cause for some amount of speculation and concern.

The same type of speculation and concern applies for businesses that are attempting a comeback from issues of their own. Businesses very seldom find themselves in any sort of difficulty as the result of a single event. Tiger hurt his back and had surgery. I am hard pressed to mention a similar type of singular event where as the result of it a business finds its ability to perform to be fully in question. Businesses don’t hurt their backs and have surgery which then require them to execute an immediate comeback plan.

The more usual reason that businesses find themselves in trouble is due to an inattention to the fundamentals of the business or the trends in the market. These types of issues tend to compound themselves over time and culminate with a “sudden” realization that there is a problem. With the realization that there is an issue comes the first reaction to desperately seek a quick solution.

I think it is fair to say that since most business issues did not result from an abrupt sort of event, quick solutions to the problem are not going to be easily implemented or particularly successful in resolving the issue. But that doesn’t seem to stop many businesses from at least trying them.

The two quickest solutions to business issues normally boil down to two simple approaches: Sell more, and Cut costs. Sometimes both solutions are attempted at the same time. Surprisingly enough, I think that these are probably the correct approaches, but that trying to apply them too quickly may only make the problems worse.

Just as many people are concerned that Tiger Woods’ trying to make a comeback from surgery so quickly might cause further injury to his back, making things worse.

There is an old saying in business: “You cannot cut your way to prosperity”. I think this is true. You may have to cut your way to survival, but you can’t cut your way to growth. With that in mind I am going to focus more on the “Sell more” aspect of businesses’ desperate responses to issues.

Too many times a business that finds itself in a recovery mode institutes a “Sell more” sales drive in order to drive incremental revenue, and hopefully incremental margin from it. Unfortunately under these types of circumstances “sell more” many times gets translated into “sell anything”. This usually results in the acquisition of many sales opportunities that do not adequately fit the proper deal profile for the business.

A proper deal profile for a business includes consistent, attainable deliverables; repeatable business products and functions that do not drain or strain business resources, pricing that enables contributory margins and profitability, and contract conditions that do not present onerous hurdles to the success of the engagement. These are the specifics associated with a healthy approach to sales.

Too often a business can get too anxious to rapidly try and recover from an issue that occurred over time. This can result in the “sell anything” approach to business in an attempt to generate revenue to help turn things around. All too often this approach results in lower margin deals and one-off opportunities that in the end not only do not add to efficiencies, but actually detract from them in the longer run. The sell anything approach is a scatter-shot pursuit of a specific solution, and as with most scatter-shot applications it results in far more “misses” than hits.

When a business is in any sort of difficulty, or is experiencing issues, incrementing in a number (large or small) of sales misses to the solution mix does not help. It only detracts from the situation, both in the resources spent ineffectively and the resulting number of sales deals that do not generate the desired or expected returns.

If it is deemed that the issue is sales or market related, and that a new sales direction or approach is required as part of the overall business recover solution, then a specific strategy and approach to new sales is called for. This will help minimize the number of extraneous or non-contributory deals that will be added to the business mix. When there are business issues, everything must be aligned and additive to the business solution. This includes the types and values of the sales opportunities that are pursued.

A business cannot allow the “Sell More” solution to become the “Sell Anything” solution. It will only  prolong the business’s recovery, or potentially even make things worse.

Will Rogers is quoted as saying “When in a hole, stop digging.” We also have the much older and unattributed quote “Don’t just stand there. Do something.” In business it would seem that the equivalent of the first quote might be “When in a hole, start selling”, with the equivalent rejoinder to the second being “Don’t just sell. Sell something specific.”

The idea of focus and discipline never goes out of style in business, even when times are tough, or recoveries are being attempted. Maintaining a focus on selling something specific and resisting the temptation of selling anything available will result in a better solution and stronger business over the longer run, and that is the focus that business needs to maintain.

Tiger Woods is a unique talent. We shall see if the departure from his proven successful preparation process pays off in his recovery attempt. It might pay off for him, but he did miss the cut in his first tournament back, and that is news in and of itself, since he so rarely fails to make the cut. Most of the time it does not pay off for a business to try for a quick recovery that departs from their specific processes either.

Relationship, Risk and Return, Roles, Sales

Answering RFPs

Leave a comment

Most customers are pretty smart. They have to be or they don’t get to stay customers for very long. They go out of business. Ever since the first business transaction occurred where a customer gave a vendor gold (or its fiat representative, money) and in return received something they either wanted or needed, customers have been asking the eternal question:

Did I get a good deal?

The answer is invariably, maybe.

If the customer received a product or service that met their expectations and fulfilled their needs, and parted with an amount of money that still enabled them to continue operations, then they are probably not unhappy. Notice I didn’t say happy. A customer will always find room in their heart to spend less money on something. If you gave a customer their desired product for free, they would probably wonder if they should have asked for you to throw in the installation of the product for free as well.

Here in lies the rub. How does a customer get a vendor to part with their highly desirable product or service for less money? Vendors want to raise their prices. Higher prices mean better margins, better profitability, higher stock prices and eventually a larger yacht for the CEO. Keeping the CEO happy seems to be the driving force behind most business decisions these days.

The answer as to how the various customer – vendor balances are achieved lies in the market’s dynamics. If there are many people chasing or wanting the good, and relatively few suppliers, then the balance swings in the vendors favor. A good example of this phenomenon can be seen in plethora of collector car auctions that are popping up on the various television channels.

These auctions are events where we can all vicariously watch a number of rather wealthy people throw incredible amounts of money at old cars. Why are they doing that? I don’t know. I only know that when I am watching them run the price of some vintage 1960’s AC Cobra up close to seven figures, I too want that car. I don’t want to drive that car. Who would risk an accident driving a car valued at a million dollars? I would like to have that car so I could sell it for a million dollars.

Perhaps the wealthy bidders on the televised auction have already obtained their larger yachts and need another type of good to serve as the latest trophy for their success.

The point here is that there seems to be more wealthy people throwing money at old cars than there are old cars for them to throw money at. Why is that? I think it is because they are not making any more old cars, only new ones, hence there is a limited supply of old cars. But here too the economic laws of supply and demand indicate that if there are more people that want a good than there are goods (old cars) available, the price of the good will go up. This is how you get million dollar AC Cobras.

On the other side of this spectrum is the situation where there is an industry dominated by a very few customers and relatively numerous vendors contending to be one of the chosen suppliers of a good or service to them. Examples of this market structure can be seen in the automobile manufacturing or communications provider markets. These are other examples of markets that are dominated by a few very large players with many vendors contending to be suppliers to them, but these are two that we should all be familiar with.

When these customers decide that they want to buy goods or services, they also hold an auction of sorts. They hold a silent auction, with one of the prime differences being it is not the buyer who bids the highest price that wins; it is the vendor that bids the lowest price that wins. This type of scenario is called a Request For Proposal (RFP), and the really fun part of this process is that again unlike the auto auction, no one gets to know how low the others involved in the process are bidding. It’s good to be the customer in an RFP process, just as the film director Mel Brooks once said “It’s good to be King” in his movie The History of the World.

Can you imagine how much more fun it would be if car manufacturers had to go through a process like this every time you wanted to buy a car? Think about what it would be like to have car manufacturers coming to you and disclosing to you the lowest price at which they would sell you a car, without knowing what the other manufacturers are bidding. We would all probably buy more cars just for the shear pageantry and enjoyment of the process.

A customer’s RFP process is designed to do one of two things: create a process that justifies the selection of the vendor, and product that they wanted in the first place, or to reduce the vendor decision process to the lowest common denominator – price, and then choose the cheapest provider.

The RFP process enables a customer to create a specification for the good or service that they wish to obtain, and have multiple vendors submit their lowest possible price for their good or service that meets the specification. A customer can favor one vendor over other vendors in this selection process by including terms or requirements in the RFP specification that may be more advantageous to one vendor’s capabilities, or conversely have requirements that are disadvantageous to the other vendors’ capabilities.

In either event, it is the responsibility of the sales team to have previously created the relationship with the customer that will enable this sort of influence of the buying process. If you are trying to answer an RFP that does not accentuate your company’s or products advantages, your sales team has not done their job. You can usually tell this is the case by how loudly the sales team is screaming for a lower price to be included in the RFP response. You are also probably answering an RFP that does accentuate your competitions capabilities, and their sales team has done their job.

On the other end of this RFP decision process, it may be possible that the customer has in fact created their own RFP with no input from any vendors. This is a rare occurrence. If this is the case you are now in the midst of what is known as a “Price War”. This is a situation where the vendor with the lowest cost basis, or the vendor willing to take the lowest profitability margin will win the opportunity to sell their good or service to the customer.

Unless you know that you are the lowest cost supplier of the desired good or service, this is also known as a waste of time. Trying to win a price war RFP process is not usually a profitable endeavor.

The only thing worse that some unprofitable business is a lot of unprofitable business. The idea of economy of scale does not hold when it comes to unprofitable business and large RFPs.

I believe that everybody in business at one time or another has responded to an RFP. Some of us have even won them and become the selected vendor. I think that most of the times that I have been successful have been because of the influencing work that was done prior to the RFP being issued. I also think that most of the time we have all been sorry for the RFP competitions that we have won purely on price.

This probably holds true for the customers as well. If they are not willing to enable the vendor to provide their incremental or differentiate value, but only their price, then they will probably not get any incremental value in return either.

I find it even more interesting that even after all of this customer – vendor type of interaction associated with the RFP and purchase process, all the hoops that customers will create and that the vendors must leap through, and all the price discounts that will be demanded, weaseled and cajoled, the buyer will almost always refer to the selected vendor as their “Partner’.

Compensation, Incentives, Responsibility, Sales, Self Analysis

Bad Deals

Leave a comment

I started off my business career in sales. I admit it. It’s not something I am particularly proud of…come to think of it, it is something that I am particularly proud of. I can honestly say that I spent time in one of the most difficult professional disciplines around, the professional discipline of trying to get someone to give you their money. I learned a lot in sales about dealing with customers. I also learned a lot about dealing with the internal mechanisms of the company that I worked for as well. I thought that any customer that I could make a deal with and get an order from was a good customer. As I have progressed through my career I have learned that not all deals and customers are good.

For the average salesperson an order is an order. The more of them you get, the more commissions you get. The more commissions you get the more money and personal esteem you acquire. Along with this comes better houses, cars, big screen TVs and along with the laws of natural selection an increased opportunity to pass your sales DNA along to future generations of sales people. In case you missed it, sales is a jungle.

The ideal sales deal is that you provide your customer with something they need, a product or a service, and they provide you with something you need, primarily money. As long as everyone keeps this sort of exchange arrangement in mind things normally go well, and for the most part they usually do.

Occasionally however there have been recorded instances where things didn’t go well. Many of these sorts of instances are attributable to honest mistakes or misunderstandings and the preponderance of them can be cleared up by honest and diligent work by both parties associated with the deal.

Then there are the outliers. Those deals that you have entered into that despite the fact that you’re doing everything right, either one or both of the parties to the deal are unhappy. Either the customer is not getting what they wanted, or you are not getting paid. Sometimes both. What do you do?

The first step is to find the nearest Home Depot store. Go there and go into their Bathroom / Plumbing section and find a really nice mirror. Buy that mirror, take it to your office, hang it on your wall and spend some time looking at and questioning the person in that mirror to make absolutely sure that you are in fact living up to your end of the deal. Try to look at the person in that mirror from the customer’s point of view. Have you told the customer everything the need to know? Have you done everything you need to do? Start with you.

If you have completed step one and are reasonably confident that you and your team are providing all the entitled goods and services to both the letter and the spirit of the contract then the issue may in fact lie on the other side of the deal, with the customer. This is usually a pretty rare, but not an unheard of event. You may have a customer that through either the normal or abnormal conduct of their business is difficult to deal with.

I have not had to deal with this sort of situation very often thank goodness, but when I have it has normally fallen into one of two categories: it is either a very small customer that for whatever reason has been forced into a position where they cannot adhere to the deal they made, or a very large customer who feels that they are either such a desirable customer or so dominant in their market that they do not feel that they have to adhere to the deal they have made.

Of the two scenarios, I prefer the first one. A company that can’t honor the deal for the most part will be willing to work with you. There may be a solution out there where the deliverables of the deal can be altered to where both parties can be addressed. A small customer company by its nature can be a fragile enterprise. There are risks associated with dealing with them. They will however usually try to work with you.

On the other side of the spectrum is the large company. These are companies that understand the role and position in the market and use it as leverage against all of their suppliers. If you want their business then they feel that you will have to play their game. Most customers want their partners to make a reasonable profit. This usually assures them of a continued available supply of the good or service that they want or need. Some however just want the deal now and will not care if you are around for the next one or not. They know there will be someone else there if you are not.

The usual response to this tactic is for the organization to agree to the terms because the organization decides that it wants the business bad enough, and the size of the business is large enough to warrant an agreement. There will usually be pressure from the sales team trying to convince everyone of the strategic nature of both the business and the customer in question, and how the profit will be made up on the next deal.

It never happens that way, and there is nothing strategic about unprofitable business. I have addressed this topic specifically in the past. You can talk yourself into just about any kind of business, but you cannot talk yourself into profitability.

Once you are into one of these types of deals where the customer is obviously leveraging you there are only a limited number of things you can do: You can look for a legal way out, or look for a way to minimize the damage and exposure while you meet your end of the agreement. After all, you signed it.

Exiting a deal because you don’t like the terms of a contract you signed is usually only an option of last resort. Unless you have been demonstrably misled by the customer, this really isn’t an option. But it is also a financial decision as well. If the fines and penalties for leaving the contract are less that than the losses expected from continuing, it needs to be reviewed.

That usually leaves buckling down, trying to reduce all costs associated with the deal in question, and then getting out at the earliest legal time. Issue the exit / cancelation notification and don’t take any argument from the sales team or customer. These are the teams that were responsible for the deal in the first place. Don’t allow them to prolong the inevitable.

Be polite. Be firm. Be gone.

Sometimes bad contracts are expensive opportunities to learn lessons. Other times they can just be plain expensive. They can be lessons about markets. They can be lessons about sales teams and their compensation incentives. They can be lessons about specific customers. The important point is that they need to be lessons that are learned.

If you have only a contract or two that fall into this category then they could be an anomaly. If you have multiple bad deals in a specific market or with a specific customer, you need to learn how to de-risk those types of deals, or avoid those specific markets or customers.

If you have multiple bad deals across multiple markets and customers, then you have a sales force issue, where their objectives and incentives are not aligned with the profitability objectives and requirements of the company. This is a key point. If you have a number of bad deals you have an issue with your sales team and their compensation plan. You probably need to make sure that the sales team has some sort of margin or profitability goal associated with their compensation in order to avoid this situation.

Regardless, the only person responsible for a bad deal is the one that agreed to it. Don’t sign a bad deal hoping you can make it better. Don’t specifically blame the customer, but if they are unwilling to create an agreement that is at least fair to both parties you need to remember and learn from it. Learn from it and put the processes in place to make sure it doesn’t happen again.

Bad deals happen only because you agree to them.

Planning, Priorities, Sales, Task Completion

Preparation

1 Comment


It appears to me that preparation is becoming a lost art. It seems that we always have something better to do than to prepare for what we need to do. Whether it is studying for an upcoming exam, gathering our materials for a pending presentation, coordinating speakers and logistics for a customer visit or familiarizing ourselves with the business specifics for that crucial job interview, it is preparation that lays the groundwork for success. So if preparation is a key ingredient to the success of almost any endeavor, why aren’t more people prepared?



I have noted in the past that business seems to be more enamored with the people I have dubbed “fire fighters”, those people who are called on in times of crisis, than it is with those who quietly go about doing their jobs, being prepared, and avoiding the crises that others are always so willing to deal with. I guess this extends to our entertainment complexes as well. When was the last time that you saw a commercial let alone a television show about fire prevention or crime prevention? I can’t remember one. There are however several shows on about fire fighters and crime fighters.




I am not here to critique a bunch of television shows that I do not bother to watch anyway. I only bring it up as an illustration of what seems to be our preference for drama. Fighting fires is more dramatic than preventing them. This penchant seems to have filtered over into business. In business, as I would assume elsewhere, fighting fires is not more cost effective than preventing them. It might be more dramatic, but it usually takes more time, money and people to fight the fire than it would have to just get prepared and avoid the issue.




So, what has all this discussion about fire fighters have to do with preparation? It’s pretty simple. The best way to avoid fires and other issues is through preparation. If this is the best way to avoid extraneous activities, maintain focus and save money, why don’t more people do it?




The answer is: I don’t know.




Why don’t more sales people take the extra steps in preparing for their customer presentations? Providing the corporate attendees with information on the sales opportunity, products and applications being considered and the status of the sales process enable everyone to understand the customer situation. Written agendas are always appreciated by both those presenting as well as those being presented to. Vetting the topics with the customer prior to the presentation assures that the presentations are on target. Making sure of locations, logistics and equipment availability means that the entire visit will go smooth. This may sound like minutia and detail but these are just the basics.




Providing information and individual profiles of the visiting customers to the corporate attendees and presenters assures that everyone will know who the decision makers and influencers are at the meeting. Providing the titles and responsibilities of the corporate attendees to the customer allows them to understand the responsibilities and qualifications of those that are presenting and talking to them. It also provides each attendee with a written record of who was at the meeting and the role they played. It also provides a location where notes and comments associated with each attendee can be captured. It’s not a lot more work. It is just a little more preparation, but it will make a difference.




How many times have you interviewed a candidate for a position, and had the feeling that they were not entirely prepared? Candidates should not only be versed on the company they are interviewing with in general (as most of them usually are), they should also understand the various and specific markets that the company is in and the primary competitors that the company must deal with. They need to know how the company is doing with respect to these competitors. They should be familiar with the primary senior executives of the firm, as well as any specific programs that have been announced and the progress if any against these goals. Knowledge of the company’s financial performance for the past quarter and past year, as well as the analysts’ expectation of the company’s performance for the next quarter and the next year should also be expected.




All of this type of information is easily available through a number of public sources. However there are always a number of people that want to talk about opportunities and positions, that haven’t taken the time or put in the effort to prepare them with it. If the position is truly desired, this type of preparation is crucial and will differentiate the candidates.




I suppose my point is that preparation takes time and it takes effort. It takes a willingness to do something now that may not be required until some point in time in the future. Good preparation is taking the time and effort to be ready for something that may never be required, but you are ready in the event that it is.




There are innumerable sayings associated with preparation. Most are along the lines of good things happen when preparation and opportunity intersect. Those are nice but I tend toward a little bit more substantial in this case. I think George Washington Carver said it best:




“There is no short cut to achievement. Life requires thorough preparation – veneer isn’t worth anything.”



I think if we spent a little more time preparing for whatever we deem important, as well as for possible alternatives, we would end up spending lot more time achieving and a lot less time fighting fires. That would probably best be described as progress.

Customer Satisfaction, Questions, Sales

When in Doubt….Ask

Leave a comment


Customers are funny things. They need your product and they want your help. On the other side of the equation, you want their business. On the surface this would seem to be a relatively simple situation where the solution is obvious. You provide them the solution they want, and everyone is happy. Right?


The reality seems to be that it rarely works out that way.


My experience has been that customers know exactly what they DON’T want when they see it. They can tell you exactly where the provided solution falls short of their expectation, but only after it has been provided. By then it is too late. They are dissatisfied with the solution, and you are in recovery mode. It doesn’t matter that it is precisely what they asked for, or even demanded as part of their contract.  


Customers seem to have a very hard time defining the necessary aspects of what they want to the level where the provided solution can easily satisfy them. There is an art to getting the customer to provide you the desired, and in many instances needed information to enable you to satisfy their needs. In many instances this is because the customer is not aware of, or does not know all of the variables associated with their specific business need.


So what do you do? You start asking questions.


We have all heard the old adage: “There are no dumb questions.” This is wrong. There are an incredible number of dumb questions. If you happen to ask enough of them you can and will destroy your credibility with the customer and put your deal at risk.


On the other hand, you cannot make the customer fact finding process appear to be an interrogation. Each customer feels they are, and in most cases truly are unique. Template and check list question approaches need to be used with caution as they have a tendency to remove the individual and personal relations ship that a customer requires. It also makes them feel as though they have been “sold” to and you are now just filling out the required forms.


I recently read a book, “The Sales Messenger”, by Mary Anne Davis, where she actually addresses the art of questioning a customer. The idea was not to immediately start “selling” or interrogating, but to engage them in more of a give and take proposition. Obviously this is something all sales people want, but is much easier said than done. She did get me thinking about some of her ideas and particularly the words and approaches she uses.


Ideas such as asking your customers for “opinions” and not “decisions” as a way of creating a discussion where the customer can be induced to provide more information they may not have even known they had. We are always in a hurry to get a customer to decide if they want “this” or “that”, when it is possible that ultimately neither will end up satisfying the customer.


Opinions draw pictures, where decisions select from provided options. Unless you have all the information that has enabled you to provide the correct solution / option to that specific customers needs, the idea of looking for customer “advice”, “help” and “experience” in creating solutions for that customer can only help improve the final outcome for everyone. Asking the customer for their “beliefs” on what is important and their “priorities” on what they expect help to draw the customer deeper into the desired solution, as well as draw out the deeper information necessary to create it.


The book also brought out the negative or “fighting” words that we all use. These words have a tendency to appear when the customer’s opinion or advice does not completely match our own. When this happens we usually use words like “but…” and “however…” These words will cause contention with someone you are trying to work with.


We need to debunk another old saying here: “The customer is always right.” That is not the case. If it were, every customer would be satisfied with every purchase they have ever made. Have you ever met anyone that could say they were happy with every purchase they ever made?


Healthy contention is a good thing. It will usually result in the creation of a stronger solution. The idea is not to conflict with your customers opinion. If you believe there are aspects of the needed solution that are not reflected in your customer’s opinion, do not directly challenge them. Instead, ask them a challenging question. Get them to think about your point without conflicting with their point.


As I said, customers are funny things. I thought that the ideas in the “The Sales Messenger” on how to get the information that they need and want to give you, but may not necessarily know they have, were good. The connotation of the words that you use and the approach that you use them in are key. The creation of healthy contention versus customer conflict helps to create a stronger overall solution.


It also might end up helping make your customer more satisfied with their decision to partner with you, and more satisfied with the solution you provide them.

Change Management, Competition, Customer Relationship, Decision Making, Sales

Equipment is Becoming a Commodity

Leave a comment

It used to be that if you made the best products, you had a distinct competitive advantage. However, today it appears that things have changed. If you are not making the best products, you are not at a competitive disadvantage, you are out of business.

Off-shoring, and its new euphemism “Right-Shoring”, have reduced the costs of everyone’s products. Moore’s Law (the doubling of technology’s capabilities approximately every 18 months) is well understood, and in some quarters is thought to be close to having run its course. With so many open standards, products are no longer comparable, they are virtually interchangeable.

As China emerges on the technology scene as an economic super power, it is using its competitive labor advantage (most technology based companies have their products manufactured in China by various Contract Manufacturers), and its technical parity to try and make every customer’s buying decision a price based one. In trying to make every buying decision solely a priced based one, it is in effect “commoditizing” the equipment.

If there is no ability to differentiate equipment, other than price, what can be done? The obvious choice is to start focusing on the non-equipment differentiators: the level of relationship and trust between the customer and vendor, ease of equipment installation, ease of product maintenance, warranty length and breadth of coverage, etc. In short Service.

As products become more technically capable, they can have a tendency to become more complex to operate. Their installation and implementation have become more specialized. Their maintenance and the ability to trouble shoot their problems require much more training and specialized support.

Customers do not seem to buy technology for technology’s sake. They are buying a “use” or application to fulfill their specific need. The ability to simplify and reduce the customer’s perceived risk associated with the implementation and operation of their equipment in the delivery of its functional usage can be significant equipment decision differentiators.

With it becoming so difficult to differentiate commoditized equipment, it will pay to try and differentiate the ease and simplicity of product usage, the depth and breadth of support, and the comprehensive level of service that will accompany the equipment. When the competition is trying to make the customer’s buying decision a price based one, you will need to try and make it a service based one to change the decision criteria back in your favor.


Communication, Customer Management, Sales

Great Expectations

1 Comment

A colleague of mine had been working with a difficult customer for some time. He was making good progress with the customer and their issues. Late on a Thursday he sent me a request for support with a customer deliverable for the following Monday morning at 7:00 AM. This request would require essentially a one business day turnaround, or the team to work over the weekend.

 
Now sometimes a customer request should and does require the weekend work. After a little discussion with my friend it was determined that his request was a “nice to have” not a “have to have” capability for the customer. I then asked why we wanted a “nice to have” deliverable in a “have to have” time frame. He responded by saying he was trying to show our responsiveness to the customer.

 
I explained that my concerns were multiple: I didn’t know if we could scope the work (estimate the time effort and complexity of the request), and implement properly it within the time frames he was trying to set. I also told him I thought that there was a significant risk that our demonstration of responsiveness could backfire on him. He asked how.

 
Customer satisfaction is based (in my opinion) on economic expectation theory. Simply stated that means if you set your customer’s expectations at a specific level, and then meet those expectations, your customer will be satisfied with your performance. In this instance I pointed out that if he set the customers expectations for receiving this incremental functionality (nice to have) in an achievable time frame, and we in fact were not able to deliver it in the desired interval, we would not have met the customers expectations. This would have turned a potential opportunity to build customer trust and relationship into a negative experience for the customer.

 
It would not have mattered that we were trying to do something for the customer that might have been above and beyond the requirements of the contract. What would have mattered is that we would have committed to providing something to the customer within a certain time frame and then not delivered on it. The point here was that when you commit to providing something, even something you are not contractually required to provide, it becomes an expected deliverable and is viewed as such by the customer.

 
What we instead did in this instance was commit to providing the desired incremental functionality for the Monday a week later than my friend wanted. This provided us with the time required to properly scope and perform the desired tasks. We ended up providing it on the Thursday of the week that my friend wanted (not the Monday) and were able to be perceived by the customer as both providing incremental functionality and providing it ahead of our commitment – a two for one on the customer satisfaction score card. More over we were able to set a reasonable expectation by the customer and then meet it.

Communication, Customer Management, Sales

Are They Really Buying?

1 Comment

In a previous post I noted that customers associate value with that which they pay for. That means, in my opinion, that if you give a customer something for free, the customer will not really recognize it as valued. I would like to address the concept of customer value, when it comes to sales. I will relate a story to illustrate my point.

 
Several years ago I was dealing with a customer users group. As with every good users group they were in the habit of prioritizing their product enhancement desires and requests and presenting those requests to us at our joint user’s group meetings (which actually occurred twice a year). A specific request for a specific enhancement started to appear regularly at these meetings.

 

As time passed and other issues were dealt with, this request continued to rise in priority on the request list.

Soon it became a point of contention. The customers wanted to know why the feature was not being made available (despite the availability of “work arounds”), and the sales teams wanted to know when they would be able to sell the capability to the obviously pent up demand.

 
It became time to deal with this topic directly. During an open forum meeting with the users group, they were asked how many of them wanted this capability, even though there was a work around. All hands were raised. They were then asked how many of them would be willing to pay for this capability, since incremental development and work would need to be expended by the manufacturer to create it.

Despite the popular concept to the contrary, we were in fact a “For Profit” institution.

Several hands went down. When it was shared with them what the actual price of the capability would be, to cover costs and provide profit and on going support, almost every hand dropped.

There are always those things that are “nice to have”. Those are normal items that customers do not associate value with. If they did, they would probably be categorized as “need to have” instead of “nice to have”. Need to have items can, should and normally will be paid for by the customer in association with the value they bring the customer. Items that are classified more as “wants” instead of “needs” may not.

The quickest way to separate the “wants” from the “needs” is to associate a price with the request. If the customer recognizes the value, there will be a negotiation / agreement. If the customer doesn’t recognize value, you will know very quickly and can then move on to the next topic.

Customers, Markets, Sales

Diversify Revenue

1 Comment

It is very easy to fall into the trap of being very good at one thing. You start with a successful sale. You follow it up with a similarly applied successful sale, then another, and so on. Soon you have what you feel is the “recipe” for your product/service and a market. The key item to be aware of here is “a”, as in singular market.


 


Being very good at one thing is great while that market is good, but no market is good forever. You need to make sure you are diversified in your revenue sources.


 


I am in the communications and technology industry. It has been a rollercoaster ride for over a decade. Companies have flared up very large by taking advantage of the various technologies and needs bubbles, only to almost disappear completely when that particular market bubble bursts.


 


Good rules of thumb are to focus on the needs and uses of the end users of your product or service. This means you must potentially have to “see through” your customer, to their customer, if you are not dealing directly with the final end user of your product or service. As the communications industry learned in a very painful way, it was not the network that drove the end user; it was the end user that drove the network.


 


Examples of revenue diversification can include understanding the various demographics and needs within the market and grouping like ones as targets. This would be an example of vertical market definitions and diversification. Markets such as “Governments”, “Financial Entities”, “Education” and “Manufacturing” are good examples. That way you diversify yourself into specific markets that hopefully do not move fully in coordination with each other.


 


Another methodology is to move into complementary goods and services. If you are an equipment or product provider you may want to look at moving into providing services that are associated with your product. That way when customer capital expenditures are reduced, you can still generate revenue from the service associated with your product.


 


It sounds simple, and it sounds like common sense, but it seems that all too often in the heat of the drive for ever increasing revenues, we end up focusing only on what we have done well before, and not on other potentially unfamiliar markets that we should do well on in the future.

Commissions, Incentives, Sales

There is No “Tipping” in Business

2 Comments

A good friend of mine, John Schlueter, provided me with some topics for this blog. Here is one of them.

 

If you go to a restaurant and the waiter is late with your order, and you can see that he is working very hard in a busy section with many demanding customers, will you still tip him?

 

Most of us, pretty much without exception will tip the waiter based on the situation and the obvious effort he is putting out. Unfortunately in a performance based role such as management, or sales, this would not be the case.

 

In past sales roles there have been years where I have worked some of my longest and hardest hours pursuing sales, only to be not rewarded when the sale did not come in. Everyone knew how hard I was working, that I had difficult customers and significant competition. It didn’t matter.

 

I didn’t get a “Tip”(commission).

 

A “tip” is an incentive commission to drive a desired behavior in business. It is not an entitlement.It is there to drive a desired outcome – either fast and courteous service, or achievement of a sales objective – as the case may be.

 

Despite that position, I would still probably leave a tip, but I have been in roles where my bosses didn’t feel that way at all.