Carpe Diem Consulting - Sales & Marketing Blog For Microsoft Partners

How to clone high performing sales people

The number 1 question we get asked from clients in relation to sales people is "where do I find a good one?"

The number 2 question would be "how do I clone this great sales person that I already have?"

Recently we've started working in partnership with the Sales Executive Council - they've undertaken reserach on a worldwide basis as to best practices in sales.  They've undertaken some fascinating research into the different "profiles" of salespeople, and which of these is the most successful.

In an earlier post, we spoke of the need to "provoke" the customer.  It appears the SEC research agress with us.  Out of 5 sales rep profiles, their research indicates the "Relationship Builder" (builds strong advocates within the customer; generous with time; gets along with everyone) is MUCH LESS SUCCESSFUL in sales than the "Challenger" (understands the customer's business, loves to debate, pushes the customer).

Specifically - whilst the proportion of sales reps that are Challengers and Relationship Builders are roughly the same - 39% of Challengers are "high sales performers", compared to only 7% of Relationship Builders.

But it's not just about provoking - the Challenger teaches customers something new about their business, something they didn't know before.  For example - in the IT world - I would think the Challenger salesperson could marshall the forces of their own organisation to bring the benefit of their experience in helping MANY IT departments to lower their costs, in a way that any individual CIO might not have thought of.  Provoke - Question - Teach Something New.  The art, obviously, is to teach them something new in an area where the salesperson's organisation does things differently to other suppliers.

As we say in our solutions sales training - if you've got something the customer wants and you're the only place they can get it - then it's game over.

So - are your sales reps "challenging" your customers?  When the CIO says they have no budget - does your rep meekly agree, or do they say "listen - I understand the pressures you're under - but do you realise if you invested in this virtualisation solution you'd actually end up saving your organisation money within only 5 months?  Here's a new approach for you, based on our experience with many other customers."

We're fortunate to be working with the SEC to build a process to identify Challenger sales reps within a sales team - and to then identify those with the POTENTIAL to be a Challenger, and to work with them to move to this profile - and hence sales success.

Are you looking to find that elusive Challenger in the marketplace - or would it be easier to take the members of the team you already have and train/support them to become Challengers?.........

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?

Why selling solutions is so hard!

Recent research from McKinsey and Co reports that 3 our of 4 organisations fail when they attempt to move to a solutions sales approach.

But how do you "successfully sell a solution" – indeed what is a “solution”? Why do some many firms fail?

What do we sell when we sell a “solution”?

Many companies think that, by bundling together various “hard” products with “soft” services that they’re offering a “solution”. Often, however, this combination of products and services is indeed “just another product”.

Think about McDonalds: a “meal deal solution” may comprise a burger, fries and a drink but – instead of being able to sell this “solution” for a premium, McDonalds has to discount the offering on the basis of volume. The bundling together of separate products actually creates no additional value for the customer – and this is the essence of what makes a true solution.

A true “solution” exhibits a Gestalt aspect – “the whole is more than the sum of the parts”. By integrating together various product and service elements – and by customising these for the customer – the customer receives additional value compared to what they would have received had they broken down the solution into its component parts.

An example solution

In my IT sales days I was responsible for developing a fixed cost, desktop outsourcing solution. The focus was on maximising the productivity of each user – so we provided regularly refreshed PCs, competency based training, maintenance, repairs, telephone support, asset management etc. By providing these as an integrated whole, however, we were able to charge significantly more than we would have by providing each product or service element separately.

Our customers bought the “totality” of the product – a single source solution for improving users’ productivity.

When prospects asked us to break down the pricing into component parts – we refused! It was the “wholeness” of the product that provided the real value – the whole was much more than the sum of the parts.

What drives companies to adopt a solutions approach?

McKinsey and Co reports that companies adopt a solutions approach for 2 main reasons.

Firstly – ambitious companies look for ways to deepen their relationships with key customers, achieve more margin, and reduce competitive threat.

Anxious companies, however, can see that their core product offerings are moving towards “commodity status”, with increasing competition and much more sophisticated buyers.

Why do some firms fail?

It appears that there are 3 main reasons why 3 out of 4 companies fail to successfully develop and sell solutions.

First, some firms suffer from delusion: they believe they’re selling customised, integrated solutions – but they’re really just selling bundles of products and services. If a customer can disaggregate a solution offering – if they can “pick it apart” – then it’s not really a solution at all (think McDonalds value meal – easy to purchase the component parts separately).

Secondly, some firms underestimate the difficulty in selling solutions: solution selling has longer sales cycles, and requires a much more intimate knowledge of customers’ businesses. Sales people expert in products need to transition to become expert in customers’ businesses.

Thirdly, some firms sell solutions the same as they sell products – same sales teams, same KPIs, same approach to dealing with customers etc.

Steps to successful solution selling

The McKinsey research points to qualities exhibited by firms that have made a successful transition from selling products to selling solutions.

The most important quality of firms that have made a successful transition is that they rethink their approach to sales. They realise that the solution path prescribes a longer sales cycle, with the need to influence many more people, most of whom are very senior in the prospect organisation. In the IT sales world, for example, the majority of sales people are comfortable selling to the IT department. A solution approach, however, will fail unless senior business managers outside of IT are consulted and persuaded.

Many successful firms replace up to 75% of their sales force, often preferring to hire industry specialists capable of intimately understanding target prospects’ businesses. They structure account teams around a customer relationship owner, and target small pools of prospects that have similar business needs. A different type of “market research” is required – how can we identify prospects suffering from business problems that our company is good at solving?

This “new look” sales team is often bonused differently: certainly revenue achieved is tracked and rewarded, but so to is the degree of additional business value that has been provided to the customer.

The article referenced in this newsletter is entitled Solving the solutions problem Juliet E. Johansson, Chandru Krishnamurthy and Henry E. Schlissberg The McKinsey Quarterly 2003 Number 3