Archive of ‘Sales’ category
After two years of class in B-school, one thing you learn is how much Academia likes to use 2×2 models (or similar models). Most of the time, these models are more of a way to give a simple representation to help with retention of a complicated or abstract concept, but sometimes they are actually helpful.
One I was recently shown looks at the idea of Customer Loyalty. While customer loyalty is one of the most studied and discussed topics, in day-to-day business we often neglect it. Most agree that customer retention is critical to business survival (and prosperity), but then we turn around and spend more time and investment in generating new leads and potential customers. To a fault, we tend to lump the world into past customers and people have not purchased. We take our past customers for granted and expect their business to just continue. Look at the cable industry for one. Anyone who has ever had cable will tell you that the industry rewards new customers and does whatever they can to hold their current customers hostage. But yet, while we scream and yell about this tactic, we too neglect our current customers in favor of winning new business. We devote entire departments and budgets to new businesses, but do we do the same for our current customers?
With that said, my challenge to you (the reader) is to take another look at your current customers? Who are the truly loyal? Who are you holding hostage? Who is about to escape?
Flight Risk of Your Customers
This post is not intended to make you better at customer retention. The goal here is to get you to reevaluate how you look at your customers to determine who is really loyal and what relationship you need to cultivate.
Below is a two-by-two model that I think presents an interestingly simple way to look at why and how some customers are loyal. It uses Customer Behavior and Attitude to get a deeper understanding of their Loyalty.
Loyals (blue): These are the simplest to understand. These people are your evangelists. They are extremely loyal in both their behavior and their attitude. They act as referrers and offer testimonials. You goal is to push more and more people into this box, but the question to ask yourself is, ‘How many of your customers really fall into this box?‘
Non-Loyals (yellow): These people are not disloyal. All people are loyal. They just aren’t loyal to you, hence the name non-loyal. They do not buy from you, so their loyalty behavior is low. They do not speak highly of you or refer others because their loyalties lie in other places. Your goal here should be to understand why these people don’t choose you? ‘Do your products not align with their needs? Does your core competency not align with what they want? Or are you neglecting a part of the market?’
Spurious Loyals (green): These are your highest flight risk. They are loyal in their behavior (repeatedly buy), but their attitude towards you is low. An extreme example of this is your cable provider. You renew your contract, but if there was a better option you could easily be lured away. Another example of this might be a fast food restaurant close to your office or home. ‘Do you go there as often as you do because you are loyal? Or do you go because of proximity/convenience?‘ The question to ask yourself is, ‘Is your customer doing business with you because they want to, or are they doing it begrudgingly?‘ The goal here is to understand why their attitude towards you is low because if a competitor identifies that first, you will quickly lose these customers that you probably currently count on. My guess is, you probably have a much larger percentage of your portfolio in this box then you think.
Latent Loyals (pink): These people have a very positive attitude towards you, but their behavior does not match. A prime example of this would be your luxury goods. There are people in this world who are extremely loyal to Porsche though they have never owned one. People believe in your product, but do they buy it? Price is not the only factor here though. They might believe your product is high-quality and great for others, but have a misalignment with their own particular needs. Understanding why these people have a positive attitude can help you better understand some of your issues with your other loyalty boxes, but the question you must ask yourself is, ‘Why are these people not buying? Do I really understand their needs?‘
So where do your customers lie?
What percentage of your past customers make up these different boxes?
What are you doing to understand their behavior?
What are you doing to understand their attitude?
The Differences Between a Lead and a Referral
I often hear the terms lead and referral used in the same context when, in fact, they are two very different things. Both are used to acquire new business. Yet one far outweighs the other in its effectiveness in getting closer to a sale. Entire marketing campaigns are built around finding new business using leads. Likewise, sales processes build in methods for finding new business using referrals. One method, leads, works off volume while the other, referrals, works off quality.
So what’s the difference between a lead and a referral and how should a company and, more importantly, a sales person take advantage of each? Additionally, why is it important to distinguish between the two? To begin with, a lead and a referral should be treated with different priorities since a referral is at least one step closer to the prospect than a lead. In other words, leads are strangers, referrals could be prospective customers. If a sales rep receives a lead, he shouldn’t treat it like a referral. And more importantly, if he receives a referral, he shouldn’t treat it like a lead because referrals have a higher priority than leads. Knowing the difference between the two is vital to knowing how each should be handled by a salesperson. (more…)
Selling Benefits, Not Features
Last post I discussed engaging with your customer in part four of this five part series on value-added selling. In this final part of the series, I’ll discuss the importance of selling benefits instead of features, and how to present your solution — the right solution — to your customer.
The value you add to the sales situation is demonstrated in various ways, many of which we already discussed in previous portions of this series. However, it all comes together in the way in which you present the solution to your client. Let’s discuss exactly how this is done.
First, we must cover a simple lesson on features versus benefits since it is critical that you understand the difference, and many people get them confused. A feature is something you want while a benefit is something you need. For instance, when you go to a hardware store to buy a ¼ inch drill bit, is that what you need or what you want? You don’t need a ¼ inch drill bit. You NEED a ¼ inch hole, but you WANT a ¼ inch drill bit in order to make the hole. The salesman in the hardware store, in knowing what it is you actually need, can help address what it is you’ll ultimately want to buy. (more…)
Engaging with Your Customer
In my last post I discussed relationship selling as the third part of this five part series on value-added selling. In this post, I’ll discuss how to engage yourself in your customer’s business.
As I had previously mentioned, value-added selling means becoming more than a sales rep trying to sell something. It means being truly concerned about your customer’s needs and becoming more of a partner than a vendor. For instance, there are many things you can do to become more engaged with your customer’s business than just working with the one contact (person) you have.
First of all, you should always try to call at the highest level of management as possible. If you sell too low in the organization, you probably won’t be talking to the decision maker. Sometimes this is unavoidable since the manager might have delegated the research and recommendation phases to one of his direct reports. If this is the case, then you’ll have a more difficult time reaching higher levels until you’ve convinced this lower-level individual to recommend your company and product. But that doesn’t mean you don’t try. (more…)
In my previous post I discussed selling your company in part two of this five part series on value-added selling. In this post I’ll discuss the importance of building a relationship with your customer by becoming a trusted partner that can help solve their problems.
Today customers are more sophisticated and knowledgeable. They are more skeptical and resistant to spend their hard-earned money. So they do research on what’s available, who the competitors are, the market, pricing options, and anything that will help them make a more informed decision. And sometimes they may know more about your company, your products, your competitors and your market than you do. How? Simple. A little thing called the internet has put a wealth of knowledge into the hands of consumers and businesses. So you have to make sure you know what they know, and even more. (more…)
Selling Your Company
In my last post I introduced part one of this five part series on value-added selling where I discussed adding value by first establishing your credibility. In this post, I’ll discuss the next step, which is when and how to “sell your company” to your prospect.
The Elevator Pitch
The first thing you need to do is develop a “sell the company” statement, which helps position your company. This statement is typically referred to as an “elevator pitch” because it should be short enough to tell someone exactly what you do in the time it takes them to get on and off an elevator. Here’s the drill – You’re in an elevator and someone enters with you. They say, “Hi. What do you do?” You have about 4 floors to get them to understand what you do before they walk out. Can you do it? Possibly not. (more…)
Add Value by Establishing Credibility
I would like to focus this post on value-added selling. But this topic is big. In fact it’s so big that I am going to cover it over five posts. In this first installment, I will define value-added selling and talk about how establishing credibility is an important first step in selling value to your customers.
What is Value-Added Selling?
Value-added selling simply means there has to be some inherent worth to the client from what he is purchasing from you. Obviously, to present and sell the right solution (and the right solution means one that has value to your client) you first must understand what your customer needs, how they operate, what problems they may experience, and more. Therefore, you should learn about your customers’ businesses, what products they offer, who they sell to, what their market is like, who their competitors are, the lingo or catch phrases they use in their industry, their unique business challenges, and any information that will help you better understand them and their business problems. (more…)
In an ever evolving world, this top 10 list must always be followed.
by Clay Pernell, VP of Sales & Business Development – ASPE, Inc.
The latest book I am reading, Drive, talks a lot about Motivation 2.0 and our need to move to Motivation 3.0 – in essence moving from traditional management/motivational models to updated models that more accurately reflect the nature of the modern workforce. A book that I have in my queue to read, The Challenger Sale, talks about moving from a traditional view of selling to a new non-traditional approach – in essence to reflect the modern client, how their buying style has changed and how we should approach them differently.
What I want to discuss is that although there are a number of new ways we should think/act across a number of spectrums, as the two books noted above bring to light, there are some things that we should keep as is – things that I consider as “constants.” And, there is no place better than our sales professional world to illustrate this point.
So, in this week’s sales tip, I want you to consider 10 “constants” that I believe you should never stop engaging in as sales professionals. (more…)
Top 6 Tips for Handling Unreasonable Requests
Customers – Some times ya love ‘em. Sometimes ya want to kill em’. We’ve all dealt with difficult customers before. I’m not just talking about the complainer or the “problem child.” I’m talking about the one who keeps making unreasonable requests of you and your company, or has unrealistic expectations about what you should be doing for them. And no matter what you do for them, they don’t seem to be happy about it. How do you deal with these difficult customers? Here are six tips for handling these difficult customers and their unreasonable requests. They may not work all the time, but I know they will help you most of the time, and at least help you keep your sanity while not harming your business.
Bookings are the life blood of a company. Sales deliver bookings and revenue. But how does that happen? Now add to that “how” continued commoditization and ever increasing competition and you get a receipt for paralyzing FEAR!!! It is a wonder how any business gets started or succeeds. But the reality is, sales is both an art and science, both of which can be applied to any product or market.
On April 12, 2013, Mike Shook and Will Shook of Accelerence, LLC, looked at solution selling as a differentiator and game changer. They discussed how to triangulate between your company’s market position, your competitors capabilities, and yours customers’ needs into a solution architecture that can not be bid. They also discussed sales process flows, provided a tool kit of techniques and gave a road map to solution sales success.
Mike and Will explained solution selling, how your solution can sell with competitive bids and how to construct solutions that cannot be bid. They also help demonstrate how to differentiate in a commoditized environment through various processes, techniques and tools.
You can listen to a complete recording of this presentation at aspeevents.webex.com. Select “View Event Recordings” in the top right corner. You can also download your own copy of the presentation by visiting our Web Seminar Archives.
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