By Dr Jana Matthews | 6 min read | Sell your way to success.
Selling is both an art and a science.
How do you sell your way to success? Some people think that selling is about countering objections, or getting people to buy something they don’t need or want. But I think of selling as detective work. Detecting what someone (e.g. a potential customer) really needs, how much they are willing to pay to satisfy that need, and determining whether I have a product or service that will meet that need, at a price they are willing to pay.
How to sell your way to success:
What need does the prospect have that’s driving them to search for a solution? Defining the need is part of the detective work. The underlying need is not necessarily the expressed need. A prospect could say he’s needs a car. But what he really needs is a vehicle that will transport his wife and three children and the neighbour’s children to cub scouts, soccer, baseball, football, acrobatics, and band concerts.
What is the value of the “right solution” to the prospect. We’re talking identifying the personal value and professional value to the person if you are able to come up with a solution that meets their needs! If the prospect loves music, for instance, and wants to be perceived as a connoisseur of fine music, she may be willing to spend more on audio speakers and an expensive amplifier than someone who enjoys music but is not passionate about it. Since speakers range in price from a few hundred to several thousand, understanding the value of the right solution to the customer becomes incredibly important in determining which speakers to promote to which kinds of customers. And if your have high margin, high value speakers, your marketing strategy would be more personal and rifle shot than shotgun to the masses.
Before you get too far down the track, you need to ask yourself whether your solution is the right solution, i.e. be brutally honest about whether your product or service will meet that customer’s need. For instance, if the customer decides that your speakers are outside her price range, you can test that by offering payment terms. But if she continues to say she cannot afford them, then the best thing you can do is stop selling when you realise that your solution does not meet the customer’s need.
I have worked with several software companies who have gotten in trouble because their salespeople promised that the software would do this or that. They said whatever was required to meet the customer’s need. And then the software team had to spend weeks customising the software. This put them way behind on the development of the core product. If you know who you are and what you are offering to customers, you sometimes need to walk away from a prospective sale. Rather than start cutting prices, or incur massive costs to customise your software, or change your product, or pull people off key projects in order to have the right team for this project.
In sales, as in poker, you need to know when to hold ‘em and when to fold ‘em! And that means you need to understand need and value in order to determine whether you have the “right solution”.
It is very important to identify who are the people involved in the decision and who is the ultimate decision maker? Often times they are not the same people. Is the decision going to be made by a group of people tasked with choosing the IT consulting firm, and signed off by the CFO, or will you need to sell the concept to the committee, then negotiate the price, terms and conditions with someone in procurement, and then convince the CFO? Many firms have wasted a lot of time selling to the wrong person, only to find that someone else in the company has final decision authority – someone who needs to be convinced of the need, resold on the value, and convinced that you are offering them the right solution.
It’s important to find out, as soon as possible, what the decision-making process is, and the timeline for making a decision. I’ve been in situations where timelines have been short (e.g. someone discovers unused budget which needs to be spent within a month, with the cheque issued before the end of the fiscal year), and I’ve had situations where the timelines drag on and on, with meetings postponed and new players introduced into the process. I always ask the prospect: “What is your timeline for making a decision? And can you do a sketch out of what the decision process will look like?”
One question that inexperienced sales people forget to ask is “What are the budget parameters? How much has been allocated for this product, project, or service?” Not every client will tell you; in fact those making the decision on budget will never tell you because they will give the contract to the lowest bidder. But I try to ferret out some of the budget parameters with questions such as, “We really want to provide a solution that works for you, but we need some guidance from you. Are you looking at a comprehensive solution? Are you thinking long-term or a short-term? Will this cost be considered an operating or a capital expense? What have you spent for similar products or services in the past? Do you intend to develop a long-term relationship with the vendor whose bid you accept?”
In the course of asking these kinds of questions, I am usually able to find out more information that they expected to provide.
You also need to find out if there are any requirements for justifying your price? Do they want a fixed price contract? Do they want a cost “plus”, in which case you need to provide some basis for costs, e.g., hourly rates (salary and overhead) for all employees, cost per component, estimated travel, and the profit you intend to charge? Can travel be a lump sum? Or do you need to specify the numbers of trips involved, with estimated hotel and airfare? Find out as early as possible what costs need to be justified in the proposal. And later, what level of detail you need to provide on the invoices you submit.
It’s important to identify competitors – both direct and indirect. The biggest competitor is “status quo”. The next is the incumbent vendors who has been servicing this customer. Other competitors in your space are obvious, but don’t overlook substitute products or technologies which could address the customer’s need better than yours. Of course, there’s always the option to “do nothing” and delay the decision indefinitely. There have been many sales teams who have counted their earnings before receiving the signed contract, only to find that (1) the prospect chose the same vendor, rationalising “the devil we know is better than the devil we don’t know,” or (2) decided to postpone the decision, pending investigation of the new technology, or (3) factions within the company who didn’t want to change were more powerful than the ones who did and had supported your proposal. Never underestimate the power of Luddites.
Does our return justify the sales effort? If the sales cycle is too long, or the profitability is too low. Or too many competitors are driving down margins and too many internal resources are being chewed up on this sale. If there’s a reasonably high probability that the prospect could fail to make a decision within the agreed-upon time frame. Then ask the hard question: Is this really a good prospect for us? Will the margin be chewed up in the cost of acquiring the sale? Or should we fold, take time to lick our wounds, analyse the lessons we’ve learned, gather our strength and move on to the next prospect?
Growth companies know how to sell their way to success
Growth companies need to learn the art and science of selling their way to success. Taking the time to answer these questions will significantly increase the odds of selling for success – and growth.