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The Truth About Sales
For many salespeople, success is elusive. However, it need not be
that way. A career in sales can be extremely rewarding. Financially,
the most successful salespeople are among the highest income earners
in society. A significant measure of freedom also comes with the
position. Outside salespeople are not confined to a single desk
within an office, day in and day out. They generally make their own
schedules, and account for their own time.
These rewards, however, do not come without a cost. Sales success
demands a tremendous investment of time. Selling is not an 8-5 job.
While normal business hours are generally used for conducting sales
calls, prospecting, etc., the various developmental and
administrative responsibilities of the job require additional long
hours of effort. A salesperson’s time is, quite simply, their most
precious resource. Consistently allocating time to the specific
tasks that will most likely yield positive results is the most
effective thing that a salesperson can do. Guiding a salesperson
through a process designed to determine where their time and efforts
are best spent is the most effective thing that a sales manager can
do.
Every salesperson today must accept an ownership responsibility
for their performance. In being assigned a territory or a
marketplace in which to sell products and/or services, a sales
professional is given the potential for success. Actual success is
entirely in their hands, and is dependent upon how effectively they
drive their business. It is never easy. Competitive realities of
today’s marketplace make the task more difficult than ever. Those
who succeed recognize the amount of work required for success. The
creators of M-Power™
developed this system to help tackle the fundamental challenges
facing all salespeople today. During the initial implementation for
the sales team, participants reviewed these challenges, which were
described as The 5 Simple Sales Truths:
Truth #1: Every Customer You Have
Will Leave
It may happen tomorrow or ten years from tomorrow, but a basic
reality of the current business climate is that provider/customer
relationships go away. Most products and services have been
relegated to “commodity” status. Management pressures to cut costs
force customers to investigate alternative providers. Competitors,
willing to accept lower margins, consistently drive market prices
lower. Corporate takeovers, closures and downsizings have
fundamentally altered organizational buying processes. In short, we
are in a business climate that minimizes the importance of long-term
relationships.
In no way does this minimize the need for superior customer
support. No company or salesperson can afford to ignore the customer
base upon which their business was built. Significant opportunities
for additional sales still exist. In time, however, factors that may
be entirely out of the control of your organization could cause each
customer to stop buying.
Too many salespeople spend the early part of their tenure
securing a handful of large accounts to reach quota. At that point
their energies turn to managing those accounts, relying on add-on
sales to secure their future. This is a dangerous trap, and has led
to the failure of countless salespeople who got off to seemingly
good starts. The only way to compensate for this first Simple Sales
Truth is to consistently win new customers. Long-term success
requires the balancing of activities designed to generate revenue
from new and existing accounts.
Truth #2: Most New Contacts Will
Never Buy Anything From Me
Based upon Simple Sales Truth #1, a salesperson must devote
considerable time to finding new customers. This is far easier said
than done. In today’s economic climate, a variety of competitive
products and services are available to your prospects. Additionally,
a variety of prospect initiatives are likely competing for the
funding required by the prospect to do business with you.
With the options available to prospects, a salesperson cannot
expect to close a large percentage of pursued opportunities. While
most salespeople realize this to be true, they do not realize the
magnitude of this issue. Successful salespeople understand the
multiple of opportunities required for every Closed piece of
business. This multiple will be different for everyone, and is based
upon the marketplace, individual skills, etc. Generally, salespeople
close 10-20% of their prospects. This means that at any given time,
a salesperson should be working 5 to 10 times the number of
opportunities needed to reach their goal!
The key points here are the knowing and maintaining of the
required multiple. For the salesperson closing at a 5-1 multiple,
every sale means that 5 prospects go away. (The Closed prospect is
now a customer, and 4 others will not happen.) While it may be
difficult to determine which 4 current prospects won’t close, the
numbers indicate that this has to be. The salesperson must
compensate for this fact by having enough new opportunities in the
pipeline to replace the anticipated losses. Unfortunately, a
salesperson cannot wait for a sale to happen to “refill” the funnel.
The number of prospects required usually means that the prospecting
activity needs to occur both before and after any sale. Prospecting
is a function that must be performed constantly.
It is actually possible to have too high a closing ratio. If a
salesperson wins business with most of the people with whom they
come into contact, it generally means that they are not meeting
enough new people!
Truth #3: If They Don’t Call Me,
They Don’t Need Me
Many salespeople try to fill one or more particular “needs” for a
prospect. In their prospecting efforts, they invariably ask
potential customers about specific needs in the areas that their
products or services can address. This is a mistake. If a prospect
previously recognized that a real need existed, they likely would
have addressed it themselves, and not waited for the salesperson to
call. Most salespeople can provide multiple examples of customers
who “walked in the front door.” They recognized a need within their
organization, and called one or more organizations to fill that
need. Unfortunately, there are rarely, if ever, enough of these
customers to meet quota.
While prospecting, the salesperson must realize that any contact
they reach will most likely not, at the moment they begin the
conversation, be in need of their services. If the contact did need
their services, they would already be doing something about it! (For
those salespeople who say, “They need it, but just don’t know it
yet”, please understand that any efforts to start the process with a
need-based approach will likely fall flat.)
Needs-based selling focuses the selling effort on the product or
service being sold. While this may be of great importance to the
salesperson, it is very easy for a prospect to say, “I don’t need
that.” During a prospecting call, this can be difficult to overcome.
A better approach is to focus the prospecting efforts on
understanding how the prospect performs the business functions
affected by your product/service, and use that as the reason to
meet. The reason to get together should not be to sell, but rather
to understand the prospect’s business, and determine if your product
or service can help their current situation. This is an easier way
to secure an appointment, and starts the discovery process necessary
to ultimately win any business.
Truth #4: Time Is Not On My Side
Time hurts a potential sale. It is a simple fact that the longer a
sale takes; the less likely it is to happen. Additionally, every
type of sale has a “sales cycle”, which measures the average length
of time required to close a typical customer. The longer a potential
sale extends beyond the normal sales cycle, the more its chances
fade. A prospect’s initial sense of urgency can diminish.
Alternatives to your product/service can be identified and selected.
Different uses of funding can take precedence over the prospect
initiative for which the product/service relates.
Salespeople do not often enough understand the ramifications of
time. It is human nature to maintain a positive attitude regarding
contacts with whom they can regularly talk. Often, they concentrate
their efforts on existing contacts under the guise of “relationship
building.” Most relationship building, however, is merely the
passage of time. If discussions and meetings are not designed to
positively impact specific sales opportunities, they are likely not
as productive as necessary. If too much time is allowed to pass
between meetings, much of what was discussed can be lost or
forgotten.
Time is the most precious commodity that a salesperson has.
Individual success is dependent upon where they choose to spend
their time. The successful salesperson understands the normal sales
cycle for their product/service, and strives to close business
within this timeframe. Opportunities that extend beyond the normal
sales cycle should be analyzed and appropriately prioritized. This
does not suggest that “deadlines” should be imposed upon prospects.
However, the salesperson simply cannot count upon those
opportunities that are extended beyond the normal sales cycle nearly
as much as those that currently fall within. In choosing where to
spend their time, the salesperson is most likely best served
concentrating their efforts on the potential business that is most
likely to occur.
Truth #5: I’m Only As Good As My
Next Step
Most salespeople are measured and ranked upon results. While this
may seem logical because revenues are only generated upon closed
business, it does not necessarily reflect what the salesperson is
currently poised to do. The old saying, “You’re only as good as your
last sale.” should instead be, “You’re only as good as your next
sale.”
Carrying this idea further, it can be concluded that no sale can
be counted upon unless the prospect is actively engaged in the sales
cycle, defined by their willingness to give the salesperson a next
step. This requires a specific, scheduled appointment with an agenda
designed to move the sale closer to “Closed.” In agreeing to this,
the prospect gives the strongest indication of their potential
willingness to ultimately buy the salesperson’s product or service.
While it certainly cannot be guaranteed, the chances for securing
revenue from this type of prospect are far greater than from a
prospect that refuses to grant a next step.
Salespeople often maintain unrealistically hopeful feelings
regarding the potential of individual opportunities. While
salespeople should be hopeful, the job also demands a large measure
of realism. A very simple directive can validate the hopefulness, or
tell the salesperson that the prospect is not as “hot” as hoped. At
the end of every prospect meeting, the salesperson should determine
if there is a reason to meet again. (It is possible that the
salesperson recognizes that no real fit exists between the two
organizations, and that it is time to move on.) If there seems to be
a reason to continue, attempt to schedule the next appointment
before leaving the meeting. Trying to schedule the next step now has
two advantages:
1.
Most importantly, it elicits a reaction from the prospect. If
the contact agrees to move forward, they will easily grant you more
of their time and schedule it in their appointment book. If,
however, the prospect does not want to continue the sale, they will
hesitate to schedule more of their time. There is no reason that a
prospect cannot, if interested, put a next step on their calendar.
Too often, a prospect will say, “Call me next week to schedule our
next appointment.” This is often used as a way to get the
salesperson out of their office. Every salesperson has examples of
prospects saying those very words, then not retuning telephone calls
the following week. Some salespeople are reluctant to ask for a next
step for fear that the answer is going to be “no.” However, those
salespeople are only creating false hopes, which do not generate
sales.
2.
Putting a next appointment on the calendar before the current
meeting ends ensures that it can take place in a timely manner.
Schedules can fill up, even if the follow-up scheduling call takes
place a few days later. The salesperson can come back to the
prospect in the shortest possible time. Some salespeople are
reluctant to attempt this because they may have things to bring back
to the prospect that could take an unknown amount of time to
prepare. (i.e. proposals, samples, etc.) In these cases, schedule a
tentative appointment. Set the expectation that you may have to
change the actual date, but want to at least get something on the
calendar. This will help prioritize tasks, and make sure that
required materials or resources are prepared in a timely manner. The
benefit of this is a shortening of the sales cycle. The more
appointments that are involved in a normal sale, the greater the
benefit.
It is important to emphasize that next steps need to be
structured to productively advance a sale. A scheduled visit to
“check the status of things” or to “see if they are willing to
consider us” does not constitute a valid next step. The prospect
must have its own agenda, and be working toward the purchase of a
good or service that will enhance their business. Additionally, any
scheduled next step must be within the current normal sales cycle.
The prospect that agrees to receive a call at a date outside the
normal sales cycle cannot be seen to be actively working toward a
purchase. It is important to maintain these events in a contact
management system, and perform the appropriate follow-up.
The “next step” concept is central to M-Power™,
and all “live” prospects must have one as detailed here. If no next
step exists, the salesperson cannot count the opportunity towards
their revenue projections. The main responsibility of every
salesperson is to maintain enough concurrent live prospects to
ensure consistent success. In general, the number of live prospects
will be a relatively small percentage of all opportunities that can
be identified within a salesperson’s territory. By identifying them
in this manner the salesperson and manager will be able to separate
reality from fiction, and opinions from fact. The manager will be
able to provide assistance to the salesperson on those prospects
that matter, and set basic salesperson activity expectations in a
more realistic and focused manner. By tracking activity that is
“real” by this definition, the manager can provide more accurate
forecasting information.
These five simple sales truths form the foundation of
M-Power™.
While they cannot be avoided, they can be compensated for. The true
benefits of the system come from the changes that sales managers and
salespeople make in their daily activities.
M-Power’s
intent is to enhance the selling process. The mentality of the
system must be internalized and utilized in order for the electronic
tool to be effective. The beauty of M-Power™
is in its ability to predict future success. The visualization tools
provided to the manager and salesperson will allow them to determine
if the quantity and quality of current activity is sufficient for
success. If not, it will indicate specific actions to take to make
their situations better. Additionally, M-Power™
will help ensure that a successful balance of activities continues
into the future.
M-Power is a Trademark of ASA Sales Systems, LLC - Patent Pending
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