salespodder: sales blog with musings and tips from inside sales

Here’s a quick excerpt from a study published in the Harvard Business Review (the undisputed Daddy of management journals) about what ‘buyers’ think reps’ biggest mistakes are – the pleasing headline is that having too high a price is the very bottom, just 2% worth!

% 

26 not following company buying process 
18 not listening to needs 
17 no follow up 
10 solutions unexplained 
04 no understanding of their business 
03 act too familiar 
02 no respect for/knowledge of competition
and at the very bottom -
02 too high a price quoted

So why do reps get so wound up about price, then? 

It’s lamentably not too often I say something that I realise when I say it was actually fantastic and I must say again, but that happened Friday morning.  In with a prospect who loved what we do, he mentioned his boss (the MD) didn’t have a roaring track record of letting people buy stuff.

Earlier in the meeting we’d talked about his kids, triggered by his laptop desktop wallpaper featuring a photo taken of them at Colchester Zoo.

So I started with my usual response that owners/CEOs of businesses never say ‘yes’ to anything first time.  In fact, their response is deliberately a ‘no’ as they expect if it’s really important, they’ll be re-pitched and their action let’s the nonsense drift into the ether.

Then an analogy popped into my head.  “it’s a bit like when you went to the zoo that day, and early on your boy asked for an ice-cream - you probably said no first-time - then after being asked 3 or 4 times later, you gave in and bought one, and then he was quiet”

My prospect chuckled at this and we agreed to discuss ways of handling the MD should he indeed knock us back first time round.

Watching my fave Newsnight show last night I was reminded of once getting quite frustrated with one particular prospect. They were putting plans in place that should have included my then peddled service, yet tried to cobble together a solution, mistakenly thinking they could do what I offered themselves.  This was a situation I’m sure many a sales person has encountered, where you sell something, and are experts at it, yet somehow, a prospect feels they can do it themselves, in-house, despite being absolutely nothing to do with their core competences or day-job. 

The classic in recent years was software.  Why oh why did companies think they could write programs themselves?  I was at an event run by a leading on-demand sales software supplier when one of their customers (a customer service bloke at online recruiters totaljobs, part of Reed) amazingly admitted they’d almost written a crm system themselves in-house!  Suicide.  Today, many more examples exists, especially around anything that is outsourced.

I still come across this kind of resolute behaviour when I pitch, with people thinking they could do what I offer themselves.  Yet the simple fact is I’ll do it for them better, cheaper and for way less hassle.  After all, it’s what we do for a living.  And then I heard a cracker of a line on Newsnight that I will have to use given this objection in future:

“you’ll take butter and sugar, and it’ll end up fudge”

A talking head from UK insurance giant Norwich Union (trying to rename itself Aviva at present) was on Channel4 News explaining why 4,000 jobs were being axed - despite making profits in the first half-year of a whopping £1.7bn.  Apparently Indian call centres are the way forward because of some rubbish about them being a global business.  Like UK customers’ll care about that.  Service will deteriorate significantly and if it gets as bad as my HSBC bank experiences, I trust they’ll leave in droves.  Anyhow, one thing the guy did say that interested me was this:

“there are only three costs in our business; people, property and technology”

And it made me think of potential pitches about how I could categorise a prospect’s costs/problems in a similar soundbite fashion, and explain how I could reduce/solve them……

Met an interesting chap today called Nigel who ran a company with a highly lucrative future I’m sure.  His main excitement (quite rightly) came from the ability to got people away from the “evil” of Outlook, and instead, actually be able to know what is in all their emails, actively using the knowledge sitting inside them, by in effect, having a front-end that is a portal into your email, which automatically tells you the ‘hot threads’ and any other vital stuff, from around them.  The idea is taking shape at www.mailspaces.com. 

Anyway, part of our discussion, was about what sales managers should do, and it was another reminder of what he described as the ‘insanity’ of where you take your best sales person, by definition surely cavalier, take them off the patch, and make them a manager.  Crackers.  Then over my lunch, I read the blog of the best English-paper cricket coverage (from the Guardian) and although not particularly a fan of Mike Selvey, he gave an awesome quote about why someone had been appointed captain above him, when he expected the job.  It was cad Phil Edmonds, with the top-brass mistakenly feeling “he’d be better a leader than led”.  Astonishing.

On a more important note Freddie is absolutely the right man to lead us in Aus this winter.

A winner of a guy I know, hailing originally from PE in South Africa has a happy sales history and, having started one new business of his own, yearns to do it again within the next three years. His current role sees him managing resellers for his London-based software products in S Africa. Doing business myself in that territory with an office in Cape Town, we discussed how un-sales savvy the Jaapies are. Yet Stuart (Pearce) excitedly told me about one of his resellers (technology firm Sybase) that had particularly impressed him.Stewie was running through a potential deal with their MD, when questions arose about it. The MD called in the rep dealing with it, and asked him to talk them through it. The rep rocks up with a single piece of paper, with a few boxes on it.

“…well, the players are [so and so] and [x] the decision maker. Their drivers are [y,z, etc] and the reason why they’ll go ahead is [a & b]. Our issues to look for are [c, d, e] ….” And on he went. Amazingly, the guy could talk about everything from one single Deal Sheet, satisfactorily answering each query.

There’s loads of funnel and account management training that spout this approach, but how often do you actually come across someone not only using it, but doing so in such a successful (apparently) manner?

In addition, why can’t any crm produce this kind of stuff?  They probably say they can, as they all claim to be easily customisable, but in reality, this never happens, does it….

Internet Auctions have been bubbling under for a few years, creeping towards ever-greater credibility, mainly due to incredible PR coups such as the European 3G mobile phone licences and their mega-billion windfalls.  It has to be said that such affection can surely nowadays only exist for those that haven’t bought through one.

Yet the evidence for me, is that for anything other than a genuine commodity product, they are an absolute waste of time.  Here’s why my advice to any sales person asked to participate should be to say a big firm ‘No’ and walk away, letting the buyer deal with the fallout.  It’ll be more profitable in the long run by far.  And you can cite these two examples from 2005-06:

Beer Coolers

I’ve one client that sells anything that helps dispense, cool or promote beverages into pubs, bars and restaurants.  They were asked by global brand owner InBev (Bass, Stella Artois, Hoegarden, Beck’s) to take part in two web auctions.  Yet even with something seemingly so-commodity, like chillers (those cabinets you see behind a bar filled with lager bottles, preferrably Peroni or Corona!) or the plaques with the beer logo that sits on the front-facing font (the tap the beer flows from you get) purchase through an internet auction was exposed as bananas.  Painful experience soon suggested problems include:

• when the margin of a product had been so eroded, another supplier realised they couldn’t offer it, had no assurance that it would be a loss-leader guaranteeing future business at acceptable rates, so withdrew, meaning a start-over
• when the cheapest product was pinpointed, the purchasing guys (in the Belgium HQ) slapped themselves on the back, but then the people that had to work with the chosen product (in the customer-facing regions) refused to take any orders of it, as they said it was an inferior offering that would mean they did their job worse instead of better

The end result was that the guys I know well at this division of engineering conglomerate IMI earned a preferred supplier agreement stopping the engagement of any future eAuctions.

Fancy Software

From one multi-billion dollar outfit to another, this time energy monolith Shell.  They required software that would help with their franchisee retailer lease management.  As in the example above, the central Purchasing bods rushed in like knights in shining armour promising the best deal.  From the shortlist provided by the Technical expertise, the two potential vendors with the unanimously preferred ’best’ solution to work with declined to participate.  The outcome?  The widely considered ‘worst-case option’ “won” the e-auction.  The users of the software then simply refused to accept it and a buying cycle began afresh with the two other vendors.  What a total waste of time and energy.  And all for a product whose range at most from any vendor was £15k-£20k.  Purchasing saw a £5k saving, the users saw thousands beyond that in productivity losses and future on-costs.  Typical.

Avoid web auctions.

Reminds me once more of Rockhound’s (Steve Buscemi) gem of a line in Armageddon as the shuttle was on the launch pad; “…all put together by the lowest bidder”.  And that was before the thing blew up for the second time.

Going through the tedium of sorting out my business’s quarterly sales tax returns, before sending them off to the guys I outsource the collation too, is not an ideal way to spend probably the last sunny Saturday morning of the year in England.  Normally I’d bang on some funky tunes (man) and get on with it, but today I fancied a change, so listened again to a couple of old episodes of one of my fave journo’s (Evan Davis) radio shows.  Dubbed a chief execs chat show, The Bottom Line is certainly worth a listen for aspirant business owner-managers.

Barry Gibbons was Chairman & CEO of Burger King from 1989 to 1994 and is now a regular on the speaking circuit and media soundbite shows, and when asked by Evan how many of the 20,000 books on Leadership Amazon sells he reads, he interestingly described how he’d lost faith with the ‘manual’ approaches peddled by the majority and migrated to biogs.  Something perhaps that people writing a (yet another) sales book may want to consider.

The pundit mentioned a joke about two Western Execs in a bar, you draw a line between them and say get the other to cross the line to your side.  The outcome is they’ll still be in the juicer next morning having not moved.  Whereas Eastern Execs in a similar scenario immediately say ‘you come to my side and I’ll come to yours’ and they get on with it straight away and progress.  His message was a cracker of a line (he claimed was a Chinese proverb) that when you feel someone’s shafting you a tad would be great to trot out:

“a good agreement is one where both parties leave the table smiling”

Anti-biscuit dunking is a crusade against any type of bad selling.  This pre-dominantly means lazy, arrogant or downright stupid tactics.  Here, unusually, is one example I came across today that, although I knew was wrong (and most definitely not to be recommended) I thought was well-worth mentioning so others avoid succombing in similar fashion.

In 70s Britain, cut-throat competition in the air-freshener aerosol can market saw two main players battle it out.  Cadbury-Schweppes in one corner, Reckitt & Colman in the other.  A salesrep, brand new to selling, was encouraged by his old-stager sales manager to adopt two tactics, which combined allowed the new rep to win a prestigious portable telly at the next sales conference, for raising his patch’s performance from the 64% when he joined, to 170% and finish top of the logs.

Faulty Stands

When delivered to the warehouses of supermarkets and chemist chains, the rep would ensure his items were always high up on pallets, where no-one could easily reach them.  He’d then find his opposition’s, and when no-one was looking, kick their products, so the display stands, invariably at ground level on the pallet, would be damaged.  They would be discovered at the store, and sent back, meaning lost competitor sales.

Faulty Cans

When walking round the warehouse, he’d also find his opponent’s pallets, and sneak in through the top.  Lifting the plastic cup-lid up, he’d then squeeze off the small round nozzle that you’d press down to release the spray.  He’d then replace the cap.  When they arrived in-store, it would be a while before customers noticed and when they did he’d gain more shelf-space.

Revenge?

Amazingly, after a few months, the competition rep realised, and returned the favour with the nozzles.  To counter the impact, the first rep went round the warehouse where the problem was identified, and used the nozzles he’d taken off his competitor’s cans, and put them into his.

Incredible.  The lesson is quite clear.  If something feels like Enemy Action, then it probably is.

I crossed paths with a chap who’s company I enjoyed a few years back called Tom Hannon.  He was the MD (having been promoted from Sales Director no less, that rare, but heartwarming scenario for us mere reps) of a large British-founded erp software vendor (the financials, order processing and stock type stuff) in those days known as JBA.  The founder (Chairman I think was his title) sold out not long after I first met Tom, pocketing £15m ish and went out to buy a Rolls straight away.  Anyway, Tom was a shrewd cookie (I later heard one of those 1999-era tales of him investing a few grand in a dotcom start-up, to see his profits run into six figures on the first day of the IPO) and being of sales bent, he often (always, even) got involved in sales management meetings.

At one such forum, I presented my wares.  I made a quip about what MD would ever slate his salesforce when chuckles turned into roars with Tom moaning about his charges.  It was all light-hearted, but after I did feel, that perhaps every MD does indeed moan about their sales team because, whatever their numbers, surely they can always do more?

And then today I met a fella I first met over 5 years ago.  He had a gripe that they had a high-margin product (wine) and yet only 25% of customers taking it, were also taking an obviously associated one (champagne).  Now, every single firm selling lots of products across loads of customers can share a similar story.  Yet how difficult is it for reps to ask, in this example, ”how about champagne as well wine now”?

I asked whether an 80/20 principle was at play.  Pareto devotees would no doubt argue that one-fifth of all reps would make four-fifths of the sales.  His opinion was that his sales team was split, 70/30.  With the 30% being the good ones.  That’s still a huge number of, as he described them, “poor to awful” (expletive removed!) and does beg the question, who can actually sell…..?