Carpe Diem Consulting - Sales & Marketing Blog For Microsoft Partners

What FREE PRIZE are you offering your customers?

Just came across this video via a post from Brand Autopsy.

"Word of Mouth" marketing is so important.  One of the only ways I can think of of building trust during the sales process is to put the prospect in contact with someone else that will speak highly of our services.

With Word of Mouth marketing, our prospects hear about our good deeds BEFORE WE EVEN GET TO SPEAK WITH THEM!!!

The video makes perfect sense - nobody is going to purchase our solutions just because we leave a FREE PRIZE - but wouldn't it be good to do something to start the conversation happening?

What FREE PRIZES are your sales and technical teams leaving for your customers?

Selling with trust #1 - convincing salespeople not to lie

In our new program that teaches field technical and consulting resources how to spot and pass on opportunities, we poll attendees prior to the course, to get general feedback on their perception of “sales”.

The results we obtain are now becoming consistent – the top 2 pieces of feedback we receive on how the services folk view the sales function provide comments along the lines of:

“forcing people to buy products they don’t need” and
“acting in the sales person’s best interest – not that of the customer”.

So – is this all fact or fiction?  Do sales people actually lie on sales calls?  If so – why?  And “does it work”?!!!

Do salespeople lie on calls?

Research summarised in an article just released entitled Ethical Salesperson Behavior in Sales Relationships (Hansen J D & Riggle R J, Journal of Personal Selling & Sales Management, vol. XXIX, no. 2 (spring 2009) reveals:

• sales managers report that 49% of their sales people have lied on a sales call, 34% have made unrealistic promises, and 22% have sold products the customer did not need (Whatever It Takes, Michele Marchetti, Sales & Management Marketing Management 149 (13) 28-36)
• 50% of sales and marketing executives believe that salespeople have lied on sales calls and that 74% believe their salespeople are encouraged to lie in the aggressive pursuit of sales goals (To Tell the Truth, Erin Strout, Sales & Marketing Management 154 (7) 40-47)

Why do salespeople lie on calls?

The article gives the following reasons as to why this behaviour occurs:

• as the salesperson sits between the buying and selling organisations, ethical conflicts occur as they attempt to balance the interests of both parties (research source here)
• as they often work in isolation ethical constraints are lowered – the employing organisation is less able to regularly reinforce the required behaviour (research source here)
• sales people are under enormous pressure to achieve targets, and they’re only human (research source here)
• sales managers will often overlook poor ethical behaviour if sales success is achieved (research source here)
• the nature of the negotiations undertaken by salespeople can promote dishonesty and exaggeration (research source here)

So what should we do?

Most of us will agree that – ideally – salespeople should have some sort of “moral code” that convinces them to create “win win” situations ie in a solution selling context the salesperson receives reward because she has identified a problem a customer has, and has removed this problem.  The salesperson “wins” because the customer “wins”.

The research, however, clearly says that something is breaking down.

We all know that ethical salespeople are generally more respected by buyers – but does this mean they win more deals?

There is anecdotal evidence that this is the case – for example in his brilliant book The Speed of Trust Stephen M R Covey talks about the “Economics of Trust”, and uses this simple equation

↑ Trust = ↑ Speed ↓ Cost

to explain that, in business situations, high trust increases the speed with which transactions can occur, and greatly reduces the cost of facilitating these transactions.  Certainly salespeople benefit by achieving greater “velocity” in their sales funnel.

What is interesting about the original article that sparked this entry, however, is that it offers proof that ethical behaviour on the part of the salesperson actually drives better returns.  Ethical sales behaviour positively influences buyer/seller relationships – this leads to greater economic returns particularly in the longer term.  Ethical salesperson behaviour (unfortunately!) plays a minimal role in producing immediate economic returns – however an enormous link is proven between ethical behaviour and the buyer providing positive word of mouth referrals.  Other research points out that customers gained via some sort of referral remain loyal buyers for longer, and are more profitable than customers gained through other demand generation programs.

We need to point out to salespeople that – whilst it “feels good” to behave ethically – it actually increases sales performance, making their job easier over time.

The implications are huge, and in coming articles I want to provide a framework that can be pursued to improve sales performance by displaying ethical behaviour – by building trust – through the sales process.  Many managerial elements come into play – training, incentives, sales management behaviour, sales process, how to market trust etc.

I’d value hearing from you about any specific programs you might have in your organisation designed primarily to improve sales performance by actively building trust throughout the sales process.

IDC research - in 2009 we have to "sell different"

It's of great concern to me to see some organisations adjusting to "tough economic times" by "trimming costs".

If we accept that selling involves helping customers solve their problems - then this should be the time of immense opportunity!

Trimming costs won't cut it - we're about to release a "Sales Blueprint for Tough Economic Times" - now is the time for targeted sales and marketing investment.  Indeed - research such as that just carried out by IDC (and summarised below) indicates that (a) we all need to do things differently to whatever worked last year (b) we need to increase our investment in sales and marketing.

If you'd like a copy of the sales blueprint when it's released just let me know - in the mean time this IDC summary (that I first came across at Lee Levitt's blog) makes for very interesting reading.....

IDC 2009 Sales Barometer & Top Ten Predictions

View more presentations from Lee Levitt.

CIOs want partners - not products

In our Essence of Selling Solutions course, we have a slide - we call it the "holy grail" slide - that lays out 10 fundamental tenets that we believe - if they are followed - will lead to unlimited opportunities, all of which are successfully closed.

 

Interesting article today - that you can find here - supporting our tenets "Not about product" and the need for "Evidence" (ie customer reference sites to prove to prospects you can deliver, not just talk).

Do your salespeople know how to improve your customers' processes and costs - rather than sell product?  And have they captured a case study from ALL existing customers to use as "proof" to new prospects that you can get the job done?

If you'd like more information on the fundamental tenets, just drop us a line.

Sales Tactics for Tough Times - #3 Provoke the Customer

Brilliant article in the most recent Harvard Business Review which you'll find here, proposing that – when your customers are slashing their discretionary budgets – the best way to make a sale, and indeed to really help the customer – is to provoke them(!)

By “provoke”, the authors don't mean “upsetting them”.

Rather – by not accepting there is “no budget” – and by developing a compelling point of view about changes that are needed to the customer’s business given the economic climate – the customer is challenged into considering a scenario that, up until our visit, they had been “feeling” but not “articulating”.

As a consulting organisation, we are about to produce a “sales blueprint for tough economic times”, to challenge our clients as to the quality of whatever strategy they have in place to modify their sales and marketing resources/plans to succeed during the GFC.

From a Microsoft Partner’s perspective, we think it is appropriate to “provoke” the IT Manager along the lines of “we’ve seen many IT Managers fail in the current climate because they can’t demonstrate business value to the rest of the organisation – it would be helpful if you could explain to me what process you’ve used to exhaustively consider every possible alternative to reducing not just IT costs, but also costs within the rest of the business by embracing IT automation and process modification”.

Except in the most “enlightened” IT organisation, our experience is that the IT Manager is “pulling in the horns”, reducing discretionary expenditure, and cancelling non-critical projects.  We think this is not enough:  IT has always held the promise of revolutionising business productivity – yet in many (most?) instances IT has not delivered.  Now is the time for IT to step up to the plate to deliver dramatic savings in both IT and also business costs.

Most IT Managers, however, don’t have the experience of working in numerous IT organisations – compared to what we do as Microsoft Partners.  We should be able to offer a consulting methodology to systematically go through a number of options for them to identify potential IT and business cost savings – and to develop business cases to warrant the expenditure to put these in place.  If we can do this, we’re making more money – and we’re making the IT Manager a hero in the eyes of the organisation.  Everyone wins!

The HBR article compares “provocative” to “solution” selling, and provides case studies on how this approach has been successfully pursued by other IT organisations.

Audentis fortuna iuvat.

Sales Tactics for Tough Times - #2 Get the Field Technical Staff Spotting Opportunities

Here's a flow of logic that should lead to increased sales:

1. "Qualified Leads" are preferable to "Unqualified Leads"
2. A superior source of Qualified Leads is the existing customer base
3. On-site Technical and Consulting Resources - by definition - only deal with the existing customer base
4. Technical and Consulting Resources are (arguably) more trusted than sales people
5. Technical and Consulting Resources are ideally placed to identify and pass on Qualified Leads.

Great logic - but the only problem is that Technical and Consulting Resources generally aren't trained to spot opportunities - and indeed often object strongly to having to have anything to do with the sales process.

Our research at Carpe Diem, however, indicates that it is possible to train these on-site resources to spot opportunities whilst they're in the field - and by actually explaining what we mean by "sales" it is in fact not difficult to get them to take an active role in spotting real opportunities in the course of their everyday work.

Microsoft believes our research as well - so much so that Microsoft has internally taken on board a 1 day course we have built to train field services staff to identify opportunities whilst in the field - qualify the opportunities - and to then pass these on to sales on their return.  The course is being rolled out by Microsoft in Australia and NZ - and there are a number of Partners already trialling the course.

Check out an overview of the course here.

Perhaps tough economic times provide a good stimulus to critically review the success and potential of ALL your sales people - is it possible you could save significant money by removing the underperformers, and instead rely on your on-site resources to lift the returns from your successful sales people?

The McKinsey view - managing IT spending in tough times

Good article from The McKinsey Quarterly (December 2008) discussing the fact that "businesses badly need to extract value from their IT functions".

This sounds like a real opportunity for proactive sales people.

The flavour of the article is about reducing IT spending which initially sounds threatening - but if we're in partnership with the IT manager, and being proactive, we can add genuine value which will build the relationship into the longer term.

From a Microsoft platform perspective, we should focus on the part of the article that states "improvements can be made with modest investments".  Part of the power of the Microsoft platform is that subsequent minimal investments in different parts of the stack can actually unlock huge ROI from existing software assets.  For example - simply adding a mobility solution can mean a field sales force can better utilise a Microsoft CRM investment - increasing sales, improving customer satisfaction, and reducing downtime and travel costs:  utilising Performance Point Server can tap into deep Business Intelligence functionality that ships with SQL Server 2008.  The list goes on.

But is there urgency?  I suspect if YOU'RE not proactive and your COMPETITOR is - then you might be the one that is targeted for the cost cutting...........

The sales cocktail party rules

Throw away your corporate Powerpoint presentation - only present to customers about the customers themselves, their hopes, their problems, their dreams.

Don't talk about your product - only talk about the difference your product can make to the customer's situation.

Don't respond to "requests for quotation" - go talk to customers and find new problems to solve for them.

Don't talk about price - talk about customer value.

Don't close the sale - open the relationship.

Don't pay sales commission on receipt of the order or payment - pay on receipt of a customer signed case study/reference site.

Don't do canned product demos - do customised customer scenarios.

Any more to add to the list?

Sourced from the gapingvoid blog, brought to my attention at brand autopsy.

Sales Tactics for Tough Times - #1 Shedding Customers

This is the first in a number of articles I intend to write, focussed on outlining specific tactics for Microsoft Partner sales teams to achieve sales success during tough economic times.

 In Australia Microsoft is tackling this issue head on, outlining a number of strategies for Partners - check out Nick Mayhew's blog for details.  More on this in subsequent articles.

For now, I want to focus on the issue of customer profitability.  In our consulting efforts with organisations - both within but also outside of IT - inevitably we find that the Pareto principle applies to customer profitability ie often 80% of the profit comes from 20% of the customers.  (For a step by step guide on how to calculate cumulative customer profitability, download this extract from Carpe Diem's Action Oriented Marketing course.)

When we mention this to clients, there are general nods of agreement - but it is rare for us to see anyone doing much about it!

This phenomenon would not be so much of a problem, if it weren't for the fact that - in general - the majority of a Partner's resources are usually allocated to the tail - making this an unprofitable tail.  Chances are some of your larger customers are actually subsidising the smaller ones.

Here are the key steps you should consider following:

1. Undertake an analysis to identify which current customers are actually costing you money to service.
2. Divide this list of customers into 2 - customers which can be made profitable (perhaps by selling a managed services contract, or by renegotiating service levels etc), and customers that will likely remain unprofitable.
3. Implement a plan to exit the unprofitable customers from your business (perhaps by referal to an organisation that can service their needs, but that has a lower cost structure).

Don't, however, stop here - if you do exit these customers, there will be some loss of revenue - it is important you remove the costs associated with servicing these loss making customers.  This could mean shedding some staff - although it could also mean redeploying these staff into areas where they can generate more revenue, at the same time adding more value to the remaining customers.

If you think "exiting customers" doesn't happen in real life, check out this article from Brand Autopsy, that catalogues how US telco Sprint dropped 1,000 "demon" customers.

How good a plan do you currently have in place to ensure ALL of your customers genuinely contribute to your bottom line?  In tough economic times in particular - can you really afford to be charitable when it comes to supporting customers that will only ever cost you money?

Selling in difficult economic times

Have just finished reading an interesting blog by Gavin Ingham entitled 7 Tips For Sellilng in an Economic Downturn - and it caused me to reflect on the role of a solution sales process, and what its relevance is in difficult economic times.

Over the past 2 weeks I've had a number of "sales people" (quote marks intentional!) try to convince me that they should have a meeting with their sales manager to request a lower target over the next 6 months.  Their rationale is "tough times - less budget for IT - we will get less sales".

This sentiment should be offensive to professional sales resources!

The foundation of a solutions approach to sales is to bring to prospects' attention business problems they are experiencing BEFORE they decide to go out and obtain quotations.  Once the prospect achknowledges the business problem, a roadmap is then established so that both parties can work together to solve the problem.  This is why we sell outside - as well as inside - the IT department.

Now - it seems to me in "tough economic times" that businesses will be having even more problems - and hence if we come up with "problem solving opportunities" in fact there should be MORE business for us to do during a downturn.

To me this argument crystalises the difference between being a "high level sales administrator" (ie waiting for the customer to figure out the problem, come up with their own solution, and then approach the market - ie the world of competitive selling) and being a "true professional salesperson" (ie predicting in advance what problems a prospect may have, obtaining agreement from the prospect that the problem is real and needs to be fixed, partnering with the prospect to remove the pain).  If our role is to spot business problems and then work with prospects to solve them, our funnel should be even fuller than usual!

In their terrific book Selling is Dead, Marc Miller & Jason Sinkovitz offer this most appropriate quotation:

We see many high salaries being paid to glorified account managers and customer service people who bear the title of salesperson, but who are incapable of actually being consistent creators of business value and new business revenue.

That’s a lot of money to pay for a cream-skimming, easily replaced, noncreator of demand and growth.

In an earlier posting I wrote about the demonstrated link between IT and competitive advantage - surely in tough economic times it should be easier - rather than harder - to "genuinely sell"?

Are you a cream-skimming, easily replaced, noncreator of demand and growth?