All Work & No Play
Targeted mailings and research are in. Client golf outings are out. If you expect to sell in today's economy, you need to stop wasting everyone's time.
URL:
http://www.entrepreneur.com/sales/tipsfromexperts/article53746.html
For Chad McClennan, the only thing that's changed about
selling is everything. Compared to a year or two ago, says the
35-year-old Chicago entrepreneur, leads are harder to get, and
fewer turn into prospects. It takes more time to turn those
prospects into customers, and, if they buy at all, it's usually
for different reasons than in the past. He's paying his
salespeople differently—while hiring more of them—and
investing more in training, supervision and technology to support
sales.
"We've changed organizationally and technically, and
we've changed the sales process and compensation," says
the president and CEO of The Customer Group, a 25-person customer
service consulting firm. "And we're beginning to see
results."
McClennan's sales experience reflects the changes sales
experts and entrepreneurs have seen sweeping through selling in
recent months. New developments have ranged from the emergence of
savvier but less patient customers to the availability of more but
sometimes less qualified candidates for sales jobs. Overriding
everything is a profound change in the ability of many customers to
buy in the manner and amount they used to. "Our current and
potential customers are saying to us 'Right now, we're not
doing any business. We're waiting to see how our numbers are
going to look,'" says Pat Cavanaugh, CEO of Cavanaugh, a
44-person promotional products firm in Pittsburgh. "It's a
holding pattern."
"Today, sales is heavy on
marketing, customer insight and systematic selling, and light on
taking orders, taking clients to lunch and taking
breaks."
|
Out With the
Old
Though the recession may be behind us, its effects can still be
felt. Clearly, selling in a recovery economy is not the same as
selling during the thriving economy of a few years ago.
Things have changed, but entrepreneurs must still find new ways
to sell. McClennan said his list of valid prospects doubled during
the first three months of the year. Cavanaugh, 35, who was named
the country's top salesman-CEO by a trade magazine last year,
expects to continue a growth track that's increased sales 4,000
percent over the firm's past seven years.
How are they doing it? They're not doing what they did a
while back. They're not wasting prospects' time with
chitchat. They're not looking for easy, quick closes.
They're not cold-calling. They're not selling solely on
price. They're not just peddling products and services. And,
above all, they're not waiting one minute for buyers to come to
them.
"We were getting a lot of business through
word-of-mouth," recalls McClennan, who started his company in
1999. "There was such a great demand for consulting services
from businesses feeling the need to be competitive, but now supply
outpaces the demand. So we're doing e-mail campaigns, we're
doing targeted mailings. We never had to do that before."
Today, sales is heavy on marketing, customer insight and systematic
selling, and light on taking orders, taking clients to lunch and
taking breaks. "It's not as easy to get orders," says
Atlanta sales consultant T.K. Kieran. "You must create demand
instead of just fulfill demand."
Creating and fulfilling demand these days starts with changing
your sales strategy. It's not enough to be the cheapest, not
enough to be newest, not enough to be fanciest, not enough to be an
interesting idea. Customers are looking for solutions to problems,
and those solutions have to relate to cutting costs or increasing
profits.
"If it can't make you money or save you money, I
wouldn't bother trying to sell it," says Blair Singer, a
Zephyr Cove, Nevada, sales consultant and author of Sales Dogs (Warner). "Because
that's where people are."
If salespeople present products and services in that light, they
have to know how their customers generate sales and profits. And
that's the second major shift in sales: Now salespeople must
understand customers in a way that was optional a year or two ago.
"People don't have the time to hear what you have to
offer," says Cavanaugh. "People want to hear, 'Here
are your needs, here's the solution.'"
To get insight into solutions, salespeople have to study
customers thoroughly before they even meet them. Cavanaugh directs
his people to scan company Web sites, read corporate annual
reports, and talk to competitors in the industry so they can get a
feel for prospects' issues. McClennan assigns employees to
interrogate nonsales contacts in organizations where he hopes to
get sales. "They ask questions about challenges they're
facing today and what initiatives they have underway," he
says.
The need for knowledge is exacerbated as customers seek greater
oversight on spending, salespeople must sell to higher-level
managers now more than ever before. Senior executives have less
time to spend listening to salespeople, and it takes salespeople
longer to get a chance to be listened to. That means every
presentation is more valuable, and it's more important not to
fumble it. "The first meeting you're in," says
Cavanaugh, "you'd better have options for them."
| Take a
Closer Look |
When sales are hard to come by, experts
and entrepreneurs recommend hiring more salespeople. Luckily, there
are more available today than there were a few years
ago—although the market is a long way from being loose. But
you have to look beneath the surface of today's sales job
applicant. Internet companies and telecommunications firms, two
hot-growth industries of the late 1990s, are the source of many of
the unemployed salespeople available now. Try to keep that in mind
when you are scanning applicants, warns New York City sales
consultant Stephan Schiffman. "I see these resumes where they
increased the company's sales by 100 percent. But anybody could
in those days. The thing to ask now is, 'Could they do it
today?'" He and others recommend looking for sales
experience extending beyond the go-go years, as well as evidence of
solid sales training and business understanding, before taking on a
new salesperson. |
Once they are aware of the issues facing a company, salespeople
must develop solutions. That calls for more and different sales
training. Salespeople need less training on products and features,
and more on how CEOs and other high-level executives address the
problems they face. "The product training is great, but what
they really need is to understand more about what is driving the
company they're trying to sell to," says Kieran.
"They need to be able to think like an executive."
One of Cavanaugh's gambits is to try to demonstrate that an
investment in his products and programs will provide an
attractively positive return. "We're going to do a
cost-benefit analysis with them to show that if they spend X,
they'll get Y in return," he says. For example, a company
with low employee morale and poor attendance would be shown how one
of Cavanaugh's programs could cut the number of temporary
employees needed to replace absent workers. From there, it's
straightforward to quantify cost savings in fewer temp salaries
and, hopefully, justify the buy.
To think of that kind of objection-beater, salespeople need
training in general business management and in specific problems
facing their target companies and industries. Kieran recommends
coaching salespeople on competitive pressures, regulatory issues,
supplier conflicts and other sensitive issues executives encounter.
Says Kieran, "If you take a 360-degree view of what that
company is facing, you can get pretty adept at figuring out what
[the executive is] going through."
Mixing It Up
Some experts say the fence between marketing and sales has to come
down. "Salespeople used to be take leads from marketing or
generate their own from cold-calling," says Singer. "But
the days of cold-calling are numbered. Today, a salesperson needs
to know how to do direct marketing, how to write a headline, how to
do a sales letter, and how to generate leads without picking up the
phone."
Singer recommends salespeople get training in conducting e-mail
campaigns, publishing client newsletters, writing print and radio
ad copy and more. "It's always been sales on one side and
marketing on the other," he says. "But marketing is the
same thing as sales. It's just sales in a different medium, in
print, audio or e-mail."
McClennan echoes Singer's call for more marketing-oriented
salespeople. He's training his to develop marketing lists and
use e-mail client letters created with contact management software
to stay in touch efficiently with large numbers of prospects.
"We've also found we need to make sure our marketing and
sales [efforts] are well-coordinated," he adds. "Our
salespeople need to understand what the marketing message is and
see that it finds its way into sales scripts."
At the root of what entrepreneurs and sales pundits are talking
about is the need to approach sales as a process. Rather than
calling prospects and expecting to close a deal upon first contact,
salespeople are expected to systematically learn a market, develop
leads, prepare solutions and present them effectively.
"A lot of salespeople tried to hit holes-in-one," says
Stephan Schiffman, CEO of sales consulting firm DEI Management in
New York City. "There was a time when you could do that. But
now you have to go back to the process and be good at it,"
adds Schiffman, the author of many sales books, including one he
considers particularly appropriate to today's selling
environment, Make It Happen Before Lunch: 50 Cut-to-the-Chase
Strategies for Getting the Business Results You Want
(McGraw-Hill).
Salespeople can't expect golf outings and other forms of
entertainment to yield rapid results—or that time-pressed
clients will even accept such offerings. "Entertainment is on
the wane," says Schiffman. "Unless there's already a
relationship, taking someone to lunch doesn't serve a
purpose."
Developing and executing a sales process can takes a while.
Eighteen months ago, an opportunity that did not pan out after four
to six weeks would have been labeled a low priority. "A sales
cycle of three to four months is now mainstream," Schiffman
says.
It may take twice as many contacts to close a sale today, says
McClennan. And surprisingly, both entrepreneurs and experts agree
sellers can't always shortcut the process by just dropping the
price.
"The old method of selling by price is falling by the
wayside," explains Dennis Kyle, a sales consultant with
Positive Results in Avon Lake, Ohio. "Organizations are
willing to pay more if the product's value is evident. They
won't pay a dollar for anything if they don't see the
value."
| Performance Anxiety |
The good news about paying salespeople today is that you can peg
a higher percentage of compensation to performance. The bad news
is, old measures of performance may not be good enough. Entrepreneurs today are having less trouble keeping good people
and hiring new ones at lower base salaries than in years past. But
they are also finding less justification for paying straight
commissions for new orders. Instead, they're basing
compensation on more exotic, harder-to-figure measures such as
profit margin per order and customer satisfaction. The revised
approaches do more than save money, although total sales pay may
actually be shrinking from previously inflated levels. Most important, they make sure salespeople aren't making the
wrong sales. Paying based on profit margin keeps sellers from
cutting prices just to get an order. And basing pay on customer
satisfaction means salespeople won't promise features and
delivery dates the company can't provide. |
It looks as if the future of selling resembles the distant past
more than recent history. If there is a theme to this new selling
environment, it's this: back to basics. "The philosophy of
going in and finding out what customers need dates back to
1980," says Schiffman. "Now they're returning to what
worked years ago, which is seeing people and establishing
relationships."
One major difference between 1980 and today is the Net. Some see
it will play a major role in one shift: that is, to deploy
salespeople only to those accounts identified as having the biggest
potential. The rest will move to less costly Web-based sales
interfaces. "The top accounts are going to get the attention
and the others, unfortunately, aren't," says Kieran.
Meanwhile, entrepreneurs forced to cope with the effects of
September's terror and the 2001 recession are now looking on
the bright side. They've dusted off sales tricks they
haven't tried in years. And they're not sorry. "The
marketplace dictated we do this," says McClennan. "I wish
we had done it a lot sooner."
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Mark Henricks is Entrepreneur's "Books"
and "Smart Moves" columnist.
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