davidpoulos.com

Category: Sales

  • Sometimes, a Frontal Assault Loses The Sales Battle

    Sometimes, a Frontal Assault Loses The Sales Battle

    I was speaking with a top marketer and high-powered sales professional (yes, the two skills are not mutually exclusive), and the conversation drifted to how he made approaches to prospective clients and how HE liked to be approached. The two were the same, and clearly it’s lead him to experience fantastic success, based upon his story and current situation.

    He shared with me that “once I discovered this secret, I quit “selling” and just had a conversation.” He related how he had been approaching clients with qualifying questions, asking them about their business, and subsequently telling them and showing them how his expertise could provide solutions, how they had helped others in similar situations, and here were the reasons why. The is a common approach, one most sales people take to generated leads, warm calls, those they have no real personal relationship with prior to the initial conversation. It’s a frontal assault, based on the ABC (Always Be Closing) school of sales, which works great for high volume, turn-and-burn, broad-based consumer sales. It’s high-pressure, high speed, high-volume approach that will, with some minor tweaks, meet the numbers goal almost every time if enough approaches are made. But it doesn’t usually lead to the most loyal clients, or the most profitable, and certainly not the longest term clients, those who provide life-time value which is 10-20 times higher than the initial transaction value.

    For long-term, relationship-based, loyalty-rewarded business-to-business sales, this type of approach is less successful, and can be annoying and offensive to the executive to whom it is directed – it’s disrespectful to think that such an individual is going to make a quick, ill-considered purchasing decision, on his own, without due diligence, without internal consultation, right in front of the salesperson. Not happening.

    Sometimes a more subtle, staged approach is more appropriate – and more successful! This is not a style issue, it’s a functional reality. People want to do business with those they trust, and to come straight at someone without knowing anything substantive about them, and put pressure on them to make a purchasing decision, on what usually is a fairly high-ticket spend, does not inspire trust – someone worthy of my trust would know better . . .

    Now, for the secret my colleague imparted. His conversations don’t revolve around benefits, features, cost, product production schedules, arcane back-office technology, or even specific results. His conversations center around discovering the nature and often the source of the problem, the pain point the prospect is suffering from. Once that is established, no promises of a solution are made, but a commitment is asked of the prospect to explore a couple of ideas further, and see if the relationship is likely to work. That way they can both see that the steps recommended are sensible and effective, but also that each side has at least an emotional skin in the game, they’ve both committed to give TIME and EFFORT to solving the problem. Cost is not the central focus, indeed it may not even be mentioned.

    In a nutshell, the secret is to solve problems that both parties have agreed are problems and have agreed to work together to solve. It’s a common path, not a push-down strategy, and it works to “knock down walls” and reduce resistance, and craft a reasonable, fair and honest business relationship.

    Try this with your next solid prospect, and see what the results are. We all have to give to get, and with this simple secret, you get both.

  • 3 Ways NOT To Fall for a Clever Headline

    3 Ways NOT To Fall for a Clever Headline

    In a routine scan of my e-mail inbox, the discussion pages of my 40-some LinkedIn groups, various news sites and marketing sites, I counted over 100 headlines like the one above, promising everything from business lead generation to building up my profile, to keeping my windows from sticking, to where to go in Ocean City. All tempt the reader with a memorable number of simple solutions, neatly encapsulated in a short, easily digestible list, suggesting that if you compile enough lists about all the elements of your life, you’ll have all the answers and your life will run smoothly.

    Is this what content marketing practice has distilled itself down to, a clever headline offering quick easy solutions to life’s tough problems? I certainly hope not, because if your life is like mine and those of my colleagues here, it’s never that clean and neatly arranged – life is just plain messy!

    Marketing is a difficult, complex and widespread discipline, vastly misunderstood by the rank and file and by many of it’s practitioners. It takes YEARS of experience to master even the rudimentary elements in a coherent fashion, to be able to apply them in some fashion to a company or organization’s challenges, to identify and isolate the problem, and devise a strategy to combat it with well-thought-out tactics that do more good than harm, won’t break the budget and will return many times their cost. That’s a tall order for any single discipline, but marketing covers roughly 20 different disciplines within it, all of which can and should be considered when assessing and formulating a plan of action. If you can fit that in a list, I’d love to see it.

    Don’t get me wrong, lists of reminders can be very helpful and useful as a memory joggers of the various rough spots and pitfalls that can befall the forgetful. But I think the use (and overuse) of the catchy tip-laden headline is the lazy way to go. If our business attention span, our ability to learn new concepts, to absorb data and information, has sunk to the level where lists of tips guide your operative day, we are truly in a crisis. From the outreach side, they are a crutch for the lazy man, a cry for attention in the digital wilderness, where solid, impactful and dense information are traded away for quick thrills and easy clicks, screaming “Hey, look at my stuff, not that guy from the learned institute over there, I’m faster and easier.” They are the cliff -notes of a practice and a discipline that takes time and effort to learn, trial and error to master, and guts and determination and discipline to apply.

    Next time you see a list headline with 10 tips on anything, see if you can guess what at least five of them are before you open it. If you’re right, skip the list and it’s author and move on. I’m off to write the next entry, “10 Ways to Be Labeled an Old Curmudgeon Without Really Trying.”

  • When In Doubt, Do SOMETHING!

    When In Doubt, Do SOMETHING!

    Granite Partners ‘ sole reason for being is to help trade and professional associations excel at what they do, to grow and thrive and move forward confidently in their work of improving their members’ professional and business lives. Many of the engagements we take involve marketing, and one of the most frequent things we’ve been asked to do is essentially play the role of “energizer” for the organization’s marketing efforts.

    They’ve done the same thing year after year, promoted the same conference the same way, recruited the same type of members in the same way for years, and are starting to see their results deteriorate. Their membership numbers are flat, retention is down, conference attendance is dwindling and fragmenting, and the whole organization is struggling as a result of curtailed budgets, reduced momentum, staff ennui, and a general lack of verve for the organization’s mission.

    We come into the organization, review all their efforts, work with senior management and staff to break down some of the reasons why things are done the way they are, maybe slaughter a few sacred cows, generate some ideas for new initiatives going forward, and then work with them to implement them. From 10,000 feet, that’s what our practice looks like. Under the hood, however, there’s a lot more going on. Counteracting all that inertia, brightening up the mission and the message, assessing member’s preferences and needs, researching new member segments, generating program initiatives, all takes time, resrouces and energy. But what it really takes is courage.

    There is often some long-standing doubt surrounding these new initiatives, some deeply-rooted skepticism among the staff, many of whom have been working there for years, and have seen initiatives come and go, to no apparent effect, and don’t expect these to be any different. The courage to change the status quo is difficult to locate and harder to draw out and nurture, to bring to light and expose for all to see, so that it can spread among the staff and be transmitted to the membership. That’s our real job.

    Often what it comes down to is this: Something is better than nothing, so when in doubt, do SOMETHING and we’ll figure out if it worked later. Getting this type of thinking started takes the courage of managers and rank and file alike, and is a cultural anomaly, especially among older employees. Asking forgiveness rather than permission is counter to most Association cultures, build up after years of top-down management and communication, lack of mid-level empowerment, long chains of budgetary approval and micromanagement. Breaking that paradigm (I hate that word, but it actually fits here), is a tough challenge, but the benefits are myriad and multifaceted.

    Marketers in many organizations have been working under this new “Do Something” regime for a while now, and the one’s who pull it off successfully have earned the respect and understanding, and in some cases the admiration, of senior management in their organizations, having proven themselves to be solid, reliable producers, despite what might be seen as the use of unorthodox methodologies. Unfortunately, this new disease is not highly contagious, and needs to be spread deliberately among other staff departments. The courage to take the initiative, to empower the staff to think for themselves, to solve problems pragmatically and immediately, takes time and effort to develop, but the results are unequivocally worth it.

    Do yourself a favor – when your marketing program seems stale, your efforts start to look tired and hackneyed, the results start to droop – DO SOMETHING! You’ll be glad you did.

  • Members Behave Like Consumers . . . and Make Decisions The Same Way!

    Members Behave Like Consumers . . . and Make Decisions The Same Way!

    As the debate rages on as to whether non-profits would be better off behaving more like for-profit corporations, it would be wise to keep in mind that the central reason most non-profits were formed was to serve the members, and in that aspect non-profits could learn a lot from their for-profit counterparts. If you were to substitute the word “member” for “customer” in much of the modern marketing and advertising literature, there is a deep mine of wisdom that non-profits could plumb in order to more adequately frame their value proposition, and find greater success in the ever-present quest to find, recruit, and keep members.

    There is an obvious schism in the way corporations reach out to consumers. The two schools of thought – the “logical” and the “emotional” – are forced to co-exist, and if done properly, can work cooperatively to achieve their goal of building customer base and consumer loyalty. The “Logical” school, promoting features of the products, and the benefits thereof, using statistics, facts, information to make a “case” for their product’s superiority; and the “Emotional” school, in which images and messaging that appeal to some of the more base emotional motivators to influence purchasing behavior appear.

    This can perhaps be seen most readily in the automotive industry, possibly due to the sheer volume of television and print ads for cars that pervade national media. In roughly half the ads, the manufacturers promote things like fuel efficiency, flexibility in seating arrangements, crash safety, popularity with consumers, cargo space, back-up cameras or parking assist, features that make it desirable to certain segments of the buying population. The other half feature imagery and messaging that promote how the car will make you look, feel, how it will make your neighbors envious, how you’ll be more popular or get more attention if you own one, how it will make your co-workers jealous, appealing to the base emotional drivers like need for recognition, elevation of status or popularity, vanity or need for acceptance.

    In nearly all the non-profits we’ve worked with or counseled, the value proposition has been of the “Logical” variety – here’s the benefits you get from joining and staying a member. The other half, and some would say the much more powerful half based on some recent consumer research on buying behavior, has been left out in the cold, as if because they are a professional organization appealing to other professional organizations or persons, there is no emotional reward for becoming a member. This bloodless approach is unfortunately too typical of B-to-B marketing in general, but the ethos surrounding non-profits is so laced with the need to be taken seriously, many cannot bring themselves to voice the benefits of membership in any sort of emotional way for fear of being seen as weak, or needy, or heaven forbid, unprofessional!

    By injecting some of the emotional component into their outreach approach, non-profits could certainly experience great success in their recruiting efforts, as they would find a much larger segment of the buying population would respond to their appeals. Even in a B-to-B purchase decision, there are one or more PEOPLE making that buying decision, people with emotions, feelings and attitudes that can drive behavior in a much stronger way than the typical “Franklin List” of pros versus cons of joining an organization. By taking a “business only” approach, membership marketers have sidestepped a huge driver of consumer behavior – the need to belong, for acceptance, for praise and recognition. Maybe they feel that the emotional appeal may not be strong enough to pry the dues check out of the fingers of hard-nosed business members, who need a business case to justify every decision. Maybe they’re uncomfortable using a more emotionally based appeal to reach their potential members because they can’t guarantee to “deliver” that type of benefit year after year. Whatever the reason, there would seem to be tremendous gains to be made by positioning their organizations emotionally as well as economically.

    Maybe a look at another area of their operation would yield some insights – many non-profit, member-based organizations have a charitable arm or foundation of some sort, and the search for donors is often not only more aggressive and better focused than the member recruitment effort, but the appeals tend to vacillate between the logical and the emotional appeal, doubling the reach of the organization and driving donations beyond what the membership could logically support. Much can be learned from corporate marketing efforts and applied to non-profit recruitment and retention efforts. Sometimes its a case of simply looking over the backyard fence . . .

  • Are These 12 Roadblocks Stopping Your Valuable Trade Show Leads?

    Are These 12 Roadblocks Stopping Your Valuable Trade Show Leads?

    Scott Llewellen of TPS Displays Express put this together, and I thought you’d all enjoy these tips – they’re right on the money!

    Most trade show exhibitors put the vast majority of their effort into creating their presence at a trade show – the trade show displays they build, the staffers they send and house, and for some, the promotions they do to create greater activity in their booth space.

    Unfortunately, too many waste these valiant efforts, because they fall down on managing their trade show leads.  That’s because there are more hidden roadblocks than they realize, obstacles to getting the full value from their leads.

    So let’s bring those roadblocks out into the light.  I believe the list below includes the 12 most common obstacles to effective lead management – how many of these are issues do you need to address?

    1. Incomplete lead management process
    2. No single person responsible for the entire process
    3. No consultation with sales about what information needs to be gathered at the show
    4. No training of trade show booth staffers about what makes a qualified lead, how to record lead quality
    5. Qualifying information from leads is not captured with a lead card or a lead retrieval system
    6. If complete information is captured, it is not conveyed to the appropriate sales person after the show
    7. Slow, incomplete, or non-existent lead fulfillment
    8. No computer system or customer relationship management software in place to facilitate lead management
    9. Lead fulfillment packages not chosen nor prepared in advance
    10. Lead fulfillment is generic and does not respond specifically to what individual attendees asked about while visiting your trade show exhibit.
    11. No one pre-assigned to data enter and fulfill the large quantity of leads
    12. No accountability for sales people to follow up on leads within a specific, short period of time after the show

    Any of these sound familiar?  Fixing this will take a team effort, including your sales, marketing, and information technology teams.  Get them all in a room and work to knock down these obstacles. For motivation, bring to the meeting a pile of your latest trade show leads, a spreadsheet of the costs of your show, and the highest level exec you can get that these people all report to.

    Then you can work to avoid all 12 of these obstacles and create a smoother lead management process that gives your company the full potential value of your trade show leads.

  • Don’t Assume You Know Your Customers

    Don’t Assume You Know Your Customers

    Adam Richardson provides exquisite validation to Granite Partners’ research based marketing approach, in this well thought out blog post from Harvard Business Review. I couldn’t have said it better, so I bring it to you in it’s original form. Enjoy!

    Don’t Assume You Know Your Customers

    by Adam Richardson  |

    If the recent U.S. election taught us anything, it’s that you have to be careful assuming that others see the world the way you do. It’s very easy for any organization — political, commercial, not-for-profit — to get caught up in its own echo chamber of like-minded believers. After certain blogs, social media outlets, pundits, and talk shows whipped themselves into a self-reinforcing frenzy, many people were stunned by the election outcome. How could so many “experts” have gotten it so wrong?

    Shared enthusiasm and beliefs are valuable assets when pushing for a goal. In a business context, it’s vital that your employees are emotionally invested in your company’s vision. But there need to be checks and balances to make sure that the vision matches external reality, or you could be enthusiastically charging toward a similar shock. As the science fiction author Philip K. Dick once remarked, “Reality is that which, when you stop believing in it, doesn’t go away.”

    Getting an objective view of who you, as an organization, are trying to serve is critical, but it’s easier said than done.

    Most companies are the centers of their own universes. It’s a natural enough impression; after all, the products and services they offer are on their minds 24/7. The trap is in those companies deluding themselves into thinking that they are as important to their customers as they are to themselves. This is almost never the case. This delusion interferes with understanding customers and their needs, and frequently leads companies to talk to customers in ways that seem foreign or confusing.

    Financial services, the area that I work in now, is an example. It is rampant with confusing jargon and terminology, such as compound interest, ETFs, or the now infamous CDO, or collateralized debt obligation. A 2008 AARP study found that 79% of Americans think prescription drug instructions are easier to understand than materials from financial firms.

    But the financial services industry is not alone. Health care, wireless communications, real estate, information technology, and airlines are all major industries that consistently confuse and turn off their customers, leading to mistrust and disloyalty.

    Jargon in communication is just the surface of the problem. People who work in these industries day-to-day become infused with insider knowledge, techniques, and perspectives. After a while they forget their former lack of expertise and start to assume that everyone must also possess their knowledge — customers included.

    Employees are like hostages suffering from Stockholm syndrome — they take on the worldview of their employer and industry, and forget what it’s like to be a “regular” person without this specialized knowledge. Over time, employees start to talk mostly about tangible product features and become distanced from customer needs and benefits. Value propositions become more abstract and lose the naïve freshness of seeing of who customers really are and how they think, behave, and feel. It becomes increasingly difficult to see your company and industry as nonexpert outsiders do.

    How do we fix this? There are many research methods for better understanding customers, and you may be using them already: ethnographic research, focus groups, surveys, in-store intercepts, and so on. It’s also important to encourage employees to use competitors’ products, so they don’t develop tunnel vision. These are good and necessary, but you can have lots of data and still not see what it’s saying.

    There are two things that can stand in the way getting real insight:

    1. Admitting you may be wrong. If the organization isn’t willing to recognize that it’s not connecting with customers, dismisses indications that customers are confused or uninterested as “irrelevant outliers,” or avoids the message by shooting the messenger, then all the research in the world won’t help. Yes, there are times when an organization needs to be visionary and do things that at first most customers don’t get. Salesforce.com’s pioneering role in the nascent area of cloud computing services is an example of a company that was willing to lose some customers early on in pursuit of the bigger market later. But you have to be very confident in the size of the potential opportunity — and have the organizational fortitude — to pull of that big of a bet. Silicon Valley is littered with companies that made similar bets and failed because ultimately their proposed view of reality never came to align with that of their target customers’.

    2. Garbage in, garbage out. If you’re talking to too narrow of a sample (as was the case with many of the conservative pollsters) or framing research questions in ways that subtly pre-bias the answers, you could be inadvertently creating ever-better products for a shrinking audience. Don’t just meet with your best and current customers; get outside the echo chamber by meeting with ex-customers or people who have never been your customers but love your competitors and the upstart disruptors. (Yes, this often stresses out the sales team.) Years ago, when I was at Sun Microsystems, many at the company initially dismissed the cheap servers then being introduced by Dell and Compaq. Our loyal customers at large companies with massive IT budgets weren’t interested in these low quality machines. Not then, anyway. Sun couldn’t bring itself to lower its standards, and as a result, it ceded a huge part of the market to competitors moving up from the PC space.

    Don’t wait for a catastrophe to show you when you’ve become too caught up in your own hype. Make sure you are continuously seeking a more thorough and objective understanding of your customers, harness the fresh perspectives of new employees, and have the humility to recognize that your customers may have needs and lives beyond your company.

    For more on research and customerinsights, pick up your copy of “The Marketing Doctor’s Survival Guide”

  • Do’s and Don’ts for Your Trade Show

    Do’s and Don’ts for Your Trade Show

    Revisited due to popular demand – FOX news on Tradeshows, with some input from me . . .

    By Cindy Vanegas Published April 23, 2012 FOXBusiness

    Many business owners who eagerly pay big bucks to exhibit at industry trade shows often end up disappointed when it comes down to calculating the return on investment. Small business owners can minimize their investment or maximize their exposure through some simple marketing and partnership techniques that will help them get the most bang for their buck.

    Position Position Position: On the trade show floor, booth placement is king. “Know where the prime spots for booths are when you make selections,” advised Eddie Lange, vice president of Exhibit Experts. Lange advised business owners to look for the direction of the traffic flow, the location of the main doors and the area where there will be food and drinks. He also warned entrepreneurs: avoid “dead-end aisles and large columns where people will have to go out of their way to find you.”

    Partner-Up: If a business owner can’t afford a whole booth, try sharing. Some trade show organizers allow businesses to split space, allowing entrepreneurs to derive the benefits without incurring all of the costs. A careful read through of the contract will alert entrepreneurs to ‘subletting’ restrictions. Dave Poulos, founder of marketing company Granite Partners and former marketing director at a trade show production company, recommended business owners look for exhibitors whose product is complementary to theirs. “For example, a printer manufacturer could partner with a paper manufacturer. For every printer sold, the paper manufacturer could throw in some paper, and both business owners could share booth space and leads,” said Poulos.

    Establish an Expertise: Often times, trade shows not only offer entrepreneurs booth space to promote their wares, but they also provide on-site educational opportunities. Business owners who develop a good relationship with show and seminar organizers should consider suggesting topics where they can serve as speakers and promote their expertise. This year Green Festival, showing in NYC, Chicago, Washington, San Francisco and Los Angeles, invited people to apply to speak at the events by submitting a topic proposal.

    SPONSOR SOMETHING: From a cocktail hour to chair massages or a popcorn station, giving attendees a treat for free is a sure fire way for business owners to ensure they will be remembered. Some trade shows restrict sponsorships, offering them only to exhibitors. Others are more flexible, especially if it is coming down to show time and they are strapped for cash. Poulos of Granite Partners recommended entrepreneurs work with vendors and trade show organizer to see where sponsorship opportunities lie, since often these deals can be worked out individually.

    Read more: http://smallbusiness.foxbusiness.com/entrepreneurs/2012/04/23/do-and-donts-for-your-trade-show/#ixzz1t4vzblSL

  • More Isn’t Always Better . . .

    More Isn’t Always Better . . .

    How many of you receive more than 200 e-mail messages per day? How many of you receive more than 50 text messages per day? How many of you read more than 200 entries on social media platforms per day? Add to that radio and TV messages, Internet pop-ups, banner ads, product packages, direct mail promotions and other “input” and you have a perfect recipe for sensory overload. Studies have shown that while most people think they can multi-task well, nearly all of them showed reduced focus and performance standards on tests that required them to concentrate on as many as three tasks at once. The tasks got completed eventually, but not always with the level of quality required, and in approximately the same amount of elapsed time as would have passed if they had done each task individually in serial fashion. So where’s the gain?

    With that many messages coming into our consciousness, none of them receive the attention they deserve, to the point where we actually spend as much energy prioritizing them as we do comprehending them and acting upon them.

    Too many choices, too much information, not enough filtering or discrimination between input sources leads to inaction, dilutes the impact of each message, and slows progress and productivity. As marketers, we need to constantly be aware of the environment in which our customers and prospects function. Bombarding them with messages doesn’t necessarily lead to action, but does lead to saturation, and that saturation point is far more quickly reached today than it was even two years ago.

    That’s actually good news for intelligent marketers. It means that spending more money on higher insertion frequency, broader media buys, longer ad schedules, and higher print and circulation runs won’t get the desired results, and that knowledge allows us to focus on greater message positioning, greater relevance, tighter targeting, higher impact, and better value in our communications. Less is more, and better is less.

    Make it perfect, make it relevant, make it resonate, make it accessible on many platforms and through many channels to allow for preference, but don’t bombard or carpet-bomb in order to achieve penetration – the shields are up and it won’t work!

    Spend the savings in increased production value, higher creativity, better thought processes, higher levels of innovation, originality and transparency – it will pay off ten-fold in the long run.

    If you think this makes sense, or would like more information on this topic or others, Pick up a copy of “The Marketing Doctor’s Survival Notes” – a great addition to your professional library.

     

  • Selling Is Not About Relationships

    Selling Is Not About Relationships

    Reposted courtesy of HBR, copyright 2011
    Matthew Dixon is Managing Director of the Corporate Executive Board’s Sales and Service Practice. Brent Adamson is Senior Director of the Sales Executive Council, a division of the Sales and Service Practice. Their new book, The Challenger Sale: Taking Control of the Customer Conversation, is forthcoming November 10, 2011 from Portfolio/Penguin.

    This post, the first of a four-part series, is also part of the HBR Insight Center Growing the Top Line.

    Ask any sales leader how selling has changed in the past decade, and you’ll hear a lot of answers but only one recurring theme: It’s a lot harder. Yet even in these difficult times, every sales organization has a few stellar performers. Who are these people? How can we bottle their magic?

    To understand what sets apart this special group of sales reps, the Sales Executive Council launched a global study of sales rep productivity three years ago involving more than 6,000 reps across nearly 100 companies in multiple industries.

    We now have an answer, which we’ve captured in the following three insights:

     

    1. Every sales professional falls into one of five distinct profiles.

    Quantitatively speaking, just about every B2B sales rep in the world is one of the following types, characterized by a specific set of skills and behaviors that defines the rep’s primary mode of interacting with customers:

    • Relationship Builders focus on developing strong personal and professional relationships and advocates across the customer organization. They are generous with their time, strive to meet customers’ every need, and work hard to resolve tensions in the commercial relationship.
    • Hard Workers show up early, stay late, and always go the extra mile. They’ll make more calls in an hour and conduct more visits in a week than just about anyone else on the team.
    • Lone Wolves are the deeply self-confident, the rule-breaking cowboys of the sales force who do things their way or not at all.
    • Reactive Problem Solvers are, from the customers’ standpoint, highly reliable and detail-oriented. They focus on post-sales follow-up, ensuring that service issues related to implementation and execution are addressed quickly and thoroughly.
    • Challengers use their deep understanding of their customers’ business to push their thinking and take control of the sales conversation. They’re not afraid to share even potentially controversial views and are assertive — with both their customers and bosses.

     

    2. Challengers dramatically outperform the other profiles, particularly Relationship Builders.

    When we look at average reps, we find a fairly even distribution across all five of these profiles. But while there may be five ways to be average, there’s only one way to be a star. We found that Challenger reps dominate the high-performer population, making up close to 40% of star reps in our study.

    What makes the Challenger approach different?

    The data tell us that these reps are defined by three key capabilities:

    • Challengers teach their customers. They focus the sales conversation not on features and benefits but on insight, bringing a unique (and typically provocative) perspective on the customer’s business. They come to the table with new ideas for their customers that can make money or save money — often opportunities the customer hadn’t realized even existed.

     

    • Challengers tailor their sales message to the customer They have a finely tuned sense of individual customer objectives and value drivers and use this knowledge to effectively position their sales pitch to different types of customer stakeholders within the organization.

     

    • Challengers take control of the sale. While not aggressive, they are certainly assertive. They are comfortable with tension and are unlikely to acquiesce to every customer demand. When necessary, they can press customers a bit — not just in terms of their thinking but around things like price.

     

    We’ll discuss each of these capabilities in more depth in our upcoming posts, but just as surprising as it is that Challengers win, it’s almost more eye-opening who loses. In our study, Relationship Builders come in dead last, accounting for only 7% of all high performers.

    Why is this? It’s certainly not because relationships no longer matter in B2B sales–that would be a naïve conclusion. Rather, what the data tell us is that it is the nature of the relationships that matter. Challengers win by pushing customers to think differently, using insight to create constructive tension in the sale. Relationship Builders, on the other hand, focus on relieving tension by giving in to the customer’s every demand. Where Challengers push customers outside their comfort zone, Relationship Builders are focused on being accepted into it. They focus on building strong personal relationships across the customer organization, being likable and generous with their time. The Relationship Builder adopts a service mentality. While the Challenger is focused on customer value, the Relationship Builder is more concerned with convenience. At the end of the day, a conversation with a Relationship Builder is probably professional, even enjoyable, but it isn’t as effective because it doesn’t ultimately help customers make progress against their goals.

    This finding — that Challengers win and Relationship Builders lose — is one that sales leaders often find deeply troubling, because their organizations have placed by far their biggest bet on recruiting, developing, and rewarding Relationship Builders, the profile least likely to win.

    Here’s how one of our members in the hospitality industry put it when he saw these results: “You know, this is really hard to look at. For the past 10 years, it’s been our explicit strategy to hire effective Relationship Builders. After all, we’re in the hospitality business. And, for a while, that approach worked well. But ever since the economy crashed, my Relationship Builders are completely lost. They can’t sell a thing. And as I look at this, now I know why.”

     

    3. Challengers dominate the world of complex “solution-selling”

    Given the first two findings, it might be reasonable to conclude that Challengers are the down-economy reps and that when things return to normal, Relationship Builders will once again prevail. But our data suggest that this is wishful thinking.

    When we cut the data by complexity of sale — that is, separating out transactional, product-selling reps from complex, solution-selling reps — we find that Challengers absolutely dominate as selling gets more complex. Fully 54% of all star reps in a solution-selling environment are Challengers. At the same time, Relationship Builders fall off the map almost entirely, representing only 4% of high-performing reps in complex environments.

    Put differently, Challengers win because they’ve mastered the complex sale, not because they’ve mastered a complex economy. Your very best sales reps — the ones who carried you through the downturn — aren’t just the top performers of today but the top performers of tomorrow, as they are far better able to drive sales and deliver customer value in any kind of economic environment. For any company on a journey from selling products to selling solutions — which is a migration that more than 75% of the companies I work with say they are pursuing — the Challenger selling approach represents a dramatically improved recipe for driving top-line growth.

    If you found this valuable, you can have more like this delivered to your inbox weekly – FREE, just by subscribing to this blog above. And, don’t forget to pick up your copy of “The Marketing Doctor’s Survival Notes”

     

  • Want To Boost Profits? Never Mind Customer Satisfaction, Watch Your Rank

    Want To Boost Profits? Never Mind Customer Satisfaction, Watch Your Rank

    According to a study released by researchers at Fordham University and Ipsos Loyalty, customer satisfaction is not the best indicator of brand performance for consumer product or service companies. According to the study of 17,000 consumers over two years, the researchers developed a new measuring tool for brand effectiveness, dubbed the Wallet Allocation Rule, and skillful use of the principal can net companies millions of dollars, putting them ahead of their competitors and boosting recognition and loyalty along with customer engagement.

    Apparently “satisfied” customers are not necessarily the most loyal or profitable. Wal-Mart found this out the hard way. After launching a major renovation initiative after reviewing massive amounts of customer feedback, it cleared aisles, deleted endcaps, removed pallets of products and such, and sure enough, customer satisfaction scores rose – and same-store sales revenue entered the longest decline in store history! Apparently customers were happy to shop at Wal-Mart, but did a larger proportion of their shopping elsewhere. Share of “wallet” dissipated.

    So if happy customers aren’t loyal, and their happiness doesn’t lead to spending, what does? Ranking of priority does, based on a simple formula that illustrates a high correlation between brand ranking and share of wallet, in a very predictable fashion. This takes into account not only the rank, where the consumer places your brand on the priority list, first, second etc., but also how many brands that do the same thing exist in the landscape of their shopping experience.

    There is an elegant formula for calculating your rank, and for calculating your share of wallet, which I won’t go into here. For details, see http://hbr.org/2011/10/customer-loyalty-isnt-enough-grow-your-share-of-wallet/ar/1 .

    While the article states essentially that companies that boost their ranking will be more successful, what the formula doesn’t tell you is how to boost the ranking of your brand upward. Based on the way they conducted the study, and our own research on the way consumers feel about brands, I can make some educated guesses. Consumers have an emotional connection to the brands they engage with, no matter how infrequently they cross paths. Most people won’t admit to that connection or characterize it as emotional, but in interview research on brand awareness and delivery on the brand promise, consistently the brands with the highest emotional engagement, or most noticeable and consistent delivery on the promise would be the most popular, regardless of the nature of that emotion. Sometimes getting people riled up about something cements that brand sufficiently in consumer’s minds to rank highly, due to the high level of emotional engagement, even though the emotion might appear negative.

    The other factor at work here has more to do with awareness and visibility. The higher the frequency of engagement with a given brand, at least in brands that elicit a high emotional response, the higher the rank will be. Recency plays a part here, too, although not as big a part as you might think. If you’ve engaged with a brand more recently than others, that brand’s ranking will tend to be higher, but only by a small percentage, and any negative aspect to the engagement will erode the recency effect almost immediately. That paradigm puts a lot of the responsibility for boosting brand ranking squarely in the Marketing Department. Marketing has long been the home of the brand steward, but this study gives some teeth to their feeling that “the more we spend the more we make”. Big, vibrant, effective marketing campaigns that put product in consumer’s hands more frequently and regularly, as long as the experience is living up to the promise, will move more units by boosting ranking, taking money away from your competitors and spiking share of wallet.

    While consumer product or service sales is not a zero-sum game, you can grab market share from your competitors, and if you grab share of wallet, revenue and profits rise noticeably. Those extra sales had to come from somewhere, unless you’re the only product in the category. Moral of the story is that you don’t have to be the fastest guy in the jungle, you just have to be faster than the guy next to you, to avoid being eaten.