“Congratulations, You’re My 11th Biggest Customer”

What’s it like to be someone’s “11th Biggest Customer”?

In the constant sales competition with bigger companies for bigger deals, at some point, if you are smaller, your size is going to become an issue. This can be in an obvious way or in a subtle way- even unstated. However, if you are competing with a company who is much bigger than you are, often that competitor looks like a safer bet than you. You have to turn their size against them- and that’s not easy, it takes a little magic.

Here is the magic trick -

Ask your prospect, “Who is your 11th biggest customer for your company?” As they fumble through the list in their mind, drop in this second question, “What’s it like to be somebody’s 11th biggest customer?”

You’ve set up the conversation about size, trust and promises. Be careful, it would be easy to swing on the point with an eight-pound sledgehammer when just a finishing hammer is necessary. Here’s how the rest of the conversation should go -

You: “Being out of the top 10 shows up in a lot of ways in a business relationship- not always up front, but over time, the bigger clients always get the first attention in any of our businesses. I would encourage you to ask anyone you are considering for this project/program/purchase/partnership where you will fall in the order of size of their clients. Just for reference, you will be my 3rd biggest customer, (fill in the blank with the correct number in the top 10 for your company or your personal book of business).”

It’s simple – we all know that being 11th sucks. Sometimes a prospect needs to be reminded of this fact. Then the prospect needs to be asked to make this reference real to his or her own business. In our own hearts, all of us, prospects included, know that we don’t treat all customers equally. They enjoy that leverage when they have it and resent it when they don’t. This is our chance to drive that point home. Works like magic.

When I was a kid, my dad would take each of the kids for one week each summer on the road with him as he was doing his sales trips. My dad was a territory sales rep in Iowa, Nebraska and Kansas. We would ride with him, talk on the CB radio to find out where “smokies” were, (I have already dated myself in a rather sad way), keep track of his appointment book, pull samples for his meetings and so on. We’d get chocolate shakes for lunch and go see movies at the movie theaters in the little towns we’d stay in at night. More often than not, he’d take us in the appointment and get to watch him sell and work with customers. I learned an amazing amount. Like most things you learn when you are a kid, I didn’t have any appreciation for what I was learning until I was much older.

One of the things he taught me was that success in sales is 90% process and 10% magic. “If you work your process, you earn the right to do your magic.” I heard that a thousand times. Nutty thing to say then, now I understand he was brilliant. The point is even more valid when it comes to sales management. Sales management is about process. Process, when done correctly, is boring. The 90% of the time that a sales manager spends on process creates the opportunity for him or her to be magical the 10% when sales leadership is necessary. This week I want to talk about the 90% process, next week I’ll talk about the 10% magic.

How to Manage Sales People The first thing I want to say is that management and leadership in the role of sales are not the same thing. Different goals, different skills and different muscles.  For sales management, I believe you are working on the execution of a process. Think of it like manufacturing. There is a design and engineering phase and then there is a production phase. The production phase is about efficiency and quality control. Sales management is what happens in the production phase of sales. To successfully manage sales people during this production phase I recommend the following:

1. Drive to a Step Process - Just like manufacturing, when you go to production, you set up a series of linked processes. In each process there are requirements to be completed in one step before you can go to the next step. Sales management’s role is to ensure that we are following the process and that this execution is efficient and meets quality standards.
2. Only Focus on the Gaps - It is tempting to try to armchair quarterback every deal in a weekly meeting with sales people. Don’t. The sales management process should be pointing out gaps in either the information that is supposed to be gathered in a particular step of the sales process, the people who are engaged or how long that step is taking in comparison to your expectations. Focus on just those gaps. If there are no gaps, then the process is working. Focus on only those accounts with gaps.
3. Compliance and Coaching Are Different - Coaching to solve gaps is a different exercise than ensuring that the machine is working. If you are brainstorming a solution for handling a thorny prospect or a stuck deal, set a separate meeting time. Production discussions are about running the machine, period.
4. Own the Time - Have your sales people bring their calendar with them. Their calendar is not their own, it is yours. Working through the next week or month’s schedule is a part of the meeting. Where will they be next period, are they going the right places with your right expectations, are they visiting to visit or are they advancing the sales process along the steps? These are the questions that sales management must ask as a part of the regular meetings.

Running the Sales Management Machine

1. Meet with sales reps 1:1 - As a sales manager, you have to drive sales process compliance and efficiency rep by rep and account by account. I advocate a 30 minute meeting every week with each rep for whom you are responsible. Set it for the same time every week and run it the same way. I know, it’s not sexy, but it is enormously effective.
2. No group meetings for sales people - There is a self-delusion that sale managers have. This delusion is the belief that sales reps learn from each other as we go through a sales meeting and discuss accounts. The only person learning in a session like that is the one sales person who owns the account. In addition, he or she is usually evasive or defensive when put on the grill in front of his or her counterparts. Group meetings are for product and process education, recognition and market planning.
3. Thirty minute rule - All sales reps have ADHD, (unless they are the one talking), so don’t have long meetings. A simple rule is 30 minutes of prep for you per rep meeting and 30 minutes of meeting with each of them, done every week. If you have 5 reps, that’s 5 hours per week to run the machine. If you run the machine, the machine will run and get better, but it is boring. That’s OK. Run the machine the right way and you get to make more magic, which I’ll talk about next week.
4. Be consistent - If you want to train someone to think like you, ask them the same questions every time and they will soon anticipate your questions. This means that they will prepare to answer your questions and begin to ask those questions of themselves every time. Soon you will have people who think like you. If you play “gotcha” by asking all sorts of different questions, they will give up because they can’t get it right. By working to a process, you can develop your series of management questions. By asking those consistently, you will soon get a group of sales people who are following a consistent process. That’s an efficient machine.
5. Get commitments, take notes - By running this meeting every week, you should be able to implement rigor and impeccable follow-up, which is what is necessary for a good sales process. Take the notes of what is to be done each week by each person and start off the following week with where the person is on their commitments from the prior week. Sounds simple, right? This is one of the biggest mistakes we see- a lack of consistent rigor around commitments.

We have seen as much as a 40% lift in productivity of sales people over a less than 90 day window in the companies who have implemented just this set of practices.

It’s boring, isn’t it? That’s why so few sales managers do it- they want to do the magic and they forget the need for the rigor. You get to do your magic because you earned that right by following your process.

No matter what else we’re talking about in seminars, workshops and coaching sessions, I’m always asked the same question: How do I deal with price resistance?

My answer is easy when price is the only issue. Present the buyer with the lowest price option and win the deal.

A lot of the time, however, price is not the only issue and it’s merely being used as a smoke screen. You are getting price pressure for a lot of the usual suspects that you already know—the buyer believes that they should push for lower price, uncreative people want more for less and so on.

I want to challenge you to think of price in a different way. If you are not offering a commodity, price is a byproduct of other issues. You must be clear on these issues with the prospect or client so you can get control of the price discussion.

• Price is relative to business problems. If you are selling in the iron-triangle of Service, Quality and Price, then you are not selling value that solves business problems. You are selling into a comparative matrix that boxes you into a same:same measurement with our competitors. When you solve business problems – Time, Money and Risk—then you are in a very different dialogue. An example of this comes from one of my clients. They sell programming services on a particular operating system. This typically means that they are being compared on a bid with other vendors by how many hours it takes to complete the job and what the hourly rate is. In other words, they are a commodity in that market.

  However, they changed the conversation by saying the following:

  “If you need this project completed in a year, anyone in our industry can do the work. If you need this completed in 6 months, we can give you a list of 5 firms that can do this work. If you need this completed in less than three months…we’re it.”

  By defining the business problem as a time problem, price became a smaller part of the discussion. The interesting thing is that for those companies for which time was not the major driver, my client was still able to win business at their price because an important value of time and ability to finish the project with confidence was elevated in the conversation. The issue for all of us is how we frame the business problem apart from price.

• Price is a reflection of confidence in outcome. If there were a 100% guarantee that there would be a resolution to a buyer’s business issue, then his or her willingness to pay that price could go up. When I get price resistance on my proposals, I ask this question, “If we could get you a $20 million increase in sales in one year, would it be worth a million dollar investment?” Their answer is almost always yes. Then I say, “Well, this discussion is not about price then. It is really about your confidence in the outcome of this proposal. So, let’s talk about what would give you greater confidence in this proposal and also let’s make certain that all of your concerns are on the table.” In responding to price resistance on large account sales, focus on the issues of confidence before you discuss price or terms.
• Price is a reflection of measurement context. In the world of business solutions, there is no such thing as a true “apples to apples” comparison. Complex solutions are almost never exactly the same in the solution architecture between two competing companies. That means that there is no valid comparison between you and your competitor in the area of price. I recently used the example that you would not ask a nurse to remove a tumor, or a neurosurgeon to cure a cold. On the spectrum of care, these represent the same industry, but different problems and different solutions. This happens to you as well. A lower quality provider in your market is held up as “just as good as your solution” by your prospect, so therefore the only point of comparison must be price, right? Only if you allow it to be.
• Never Haggle. The difference between negotiating and haggling is simple. Negotiating is when you are making adjustments in terms, conditions and scope of work between two parties. Haggling is when you are asked to do the same work as you have proposed, but for less money, period. I don’t believe in haggling. If your work is priced correctly, then any adjustment in price will require an appropriate adjustment in scope, terms or conditions.

In my experience, the price resistance comes when no better context has been established for the discussion. Establishing the right context for the evaluation of your proposal is 100% our responsibility. If you are getting price resistance and your offering is not a commodity, then the context needs to be adjusted.

I was gambling in Havana I took a little risk Send lawyers, guns and money Dad, get me out of this

- from “Lawyers, Guns and Money” by Warren Zevon

When is it time for the heavy artillery in the sales process? When do you bring in the CXOs and how do you use them?

I have found that companies typically use CXOs too infrequently in the sales process, not too frequently (or not frequently enough). Regardless of frequency, though, there should be some guidelines as to how to best use your CXOs in the sales process. Let’s focus specifically on the CEO and the CFO positions for the sake of this post. Using their clout correctly can improve your sales processes and your yield on big deals.

USING CEOs

The Do List

A CEO’s greatest power in the sales pitch is in conveying the following:

• Cultural alignment. The CEO’s role in the conversation is to communicate that our organization and their organization have similar vision, mission and values. That our people and their people can work together well and that we can smooth out any of the natural bumps in a relationship. This communication occurs between your CEO and their highest level people in the sales process.
• Financial and organizational commitment. The CEO has to be the one who communicates the company’s financial position. Where it stands, its history and what the financial future of the company looks like. This is not so much of a discussion of the balance sheet as it is a discussion of the underpinnings of the business and its plan for the future. Tucked inside of this is the CEO’s communication of commitment; “We are signing up to be your partner Mr. Customer and we are sincere in our commitment to you and to this work we will do together.”
• Creativity and flexibility. Big deals are often unique in their structure and need support. This requires the creativity and flexibility of the senior-most person in your company. When the CEO is not in the room for these conversations, the discussions devolve into “if-then” and “what if?” scenarios that may be creative, but end with a statement of “I’ll have to go and discuss this.” That sucks all of the oxygen and speed out of getting a deal done.

You want to make certain that you use your CEO on the bigger deals and in the right way. Careful use of the positional power and resource will help you to close more big deals.
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In the military academies, seniors preparing for their oral exams use two key processes for preparation and improvement called Murder Board and Hot Washes. These processes will increase your sales effectiveness by huge multiples if you include them in your sales process.

Murder Board. The Murder Board is a committee of selected peers and teachers who prepare a student for oral exams by posing anticipated questions to the student and then provide critique of the answers. This same process is now used by politicians who are preparing for debates and I hope you will use it for preparing for key presentations.

To get the full value of this process, you need a few things:

• Really smart people. This means that you are going to use people who are knowledgeable about your own business, your industry, your competitors and the prospect.
• Enough time. The Murder Board process will take twice as long as the presentation itself, and then some. To be successful, you will need to go through the presentation from start to finish without sidebar interruptions. Then there is the aggressive Q & A from your Murder Board that is designed to challenge you and help you shape your presentation as well as your answers.
• Your full pitch team. You need to have the people who are going to be doing the pitch, all of them. I have seen the absence of just one person during the Murder Board then create a dynamic in the presentation that was damaging.

You are doing this process with the intention to sharpen yourself and your team up to your razor level to deliver a fantastic presentation. To get the most out of your Murder Board, follow this framework:
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Chasing….I hate chasing. Wouldn’t you rather have a fast “no” than an excruciatingly slow “maybe?”

Do you know what the difference is between begging and professional follow-up?

Three unreturned contacts to your buyer.

After three, you have to be honest with yourself—she’s just not that into you.

I call this endless follow up process the “Maybe Whirlpool.”

You know that you are in the “maybe whirlpool” when one or more of the following conditions happen:

• Slow response cycles. Any response cycle outside of 48 hours from your point of contact. When these are repeated with your key buyer or contact, then you either have a very weak contact, or you are very low on the list of issues they are solving.
• Long consideration windows, like when you receive a message that says that they will be considering their options over a period greater than 3 weeks. You may need to modify the period if there are engineering requirements, IT configuration issues or other technical compliance issues. However, there is a cycle that you need to define and then honor if you are going to stay out of the whirlpool.
• Vague political maneuvering comments. “There are a few things going on here that I can’t discuss. I need to line some things up and then I will get back to you.” Again, you have a weak contact who will not be making a decision in the near future.
• Two delays. When a fixed decision date has been moved twice.

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Referrals, references, connections, networking, social media: they’re all about access and leverage. You get access to the people who make things happen and are able to leverage these relationships.

I want to focus on the second part: Leverage. How do you get the most leverage during the sales process from your past successful client relationships? If you have read my materials, you know that your prospects have to overcome their fears and concerns in buying from a small company before they buy from you and not from a better-known, bigger company. References can be a tremendous asset in getting a buyer to overcome that fear, or they can be perceived as worthless commentary delivered by your buddies. So, how do you get the most out of your best client relationships?

A couple of techniques for high-impact leveraging of your references: (more…)

Recently a client decided to say ‘no’ to an RFP opportunity. It was tough. It was a big company, a huge opportunity and a great chance to get a foot in the door. They said no because of their Red Flag Dozen (see RFPs Suck!). The Red Flag Dozen is a list of the must-haves in order for the company to invest in responding to the RFP. One of the red flags in this situation was that my client had to have an executive sponsor before they could answer an RFP. Another red flag was that my client would have needed to have done business with the company before. Finally, my client needed access to information during the RFP process, access that the company would not grant. Three strikes: no sponsor, no past history and no access.

Here is the letter that they sent to say no. I have made the letter more generic than what was sent, but this will give you a good template to follow.

“Dear Mr./Ms. RFP Sender,

We appreciate the opportunity to respond to your Request for Proposal for the XYZ project. That said, I would like to inform you of our intent to not participate in this process. This decision is not based on your process, which is fair and balanced, but rather on our own internal opportunity review process.

Specifically, we require client executive sponsorship and a thorough understanding of the guiding business initiative. This requirement is based on exhaustive experience that indicates that the success of complex projects hinges on executive sponsorship, relentless focus on the underlying business value and trusted partnership between the business and the solution provider. While I’m certain that you fully understand this reality and would never proceed on an important project without such assurances, I am not confident that we currently enjoy this level relationship with you.

Again, thank you for the opportunity to submit. Please direct questions or comments to my attention.

Executive in Charge Non-Responding Company”

This response stands on its own. It is not a move.

That said, the letter does create the opportunity for the RFP company to come back and make a strong request for your to participate. What should you do?

1. Make a simple request. “Who will be my executive sponsor?” (see “Executive Sponsorship Agreement” blog) 2. Make a second simple request. “I would like a phone call review of the RFP document for the sake of more complete context on some of the items.” 3. Do one more thing. Go back through your Target Filter and your Red Flag Dozen before you decide to respond.

One of the keys to winning in the RFP game is to say “no” early and often. Establish your best practices and stick to them.

I have been living in the world of sales training, writing, hiring and strategy for quite some time now. I have had a chance to look behind the curtain to see what is back there. Here’s what I have found: a lot of misspent money.

The consultants and trainers working in the field are well intentioned, and many are very talented and effective. There is among all of us, however, a myopic view of solutions and consulting. For example, if I sell selection testing, then I see testing as the solution to everything. If I am a trainer, guess what, training is the answer. Process guys love process, of course the CRM people believe activity tracking is the panacea and so on. The fact is that there is not a universal solution to a multi-faceted problem and as a result, your risk in buying into one solution to solve your problems is that you are bound to overspend on one part and get poor results on another.

The Big Picture

Companies hire my company when they are ready to double the speed with which they are going to double their company. We help them develop the strategy, process and techniques for big sales. But such exponential growth is not everyone’s goal. Some companies just want to grow at a more manageable rate. This means that some times—actually a lot of times—I’m the wrong consultant for the job.

Look at it this way:

• If you want to grow 5-10% per year, then skills training with your current sales staff can help you make that improvement. It is a smaller investment and requires the least amount of organizational change to accomplish it.
• If you want to grow 10-20% per year, then you will need to change personnel and the way that you attract and select them. It is a bigger investment in dollars and culture change. If you want to get bigger in this range, you have to bite the bullet and make the choice.
• If you want to grow 20%+ per year, then you can’t just use the same people with some better techniques to get there. You can’t just use new people to sell into your current market. You are going to need a few new players and a much better market/message/sales process strategy to land your transformational accounts.

In the ideal world, you do all three because no single approach will give you the sustainable growth and solid sales organization necessary. But because most organizations have a finite amount of resources, sales consultants wind up selling you their solutions as the complete answer. It’s not accurate and that is where consultants get a bad name.

The Quartiles

If no one solution is the best for everything, then how do you figure out what is best for you? I believe you should use the Quartiles method- Break down your sales staff in blocks of 25% performers, based upon raw gross sales. Be careful, you can over analyze this. Just force-rank them by sales and you can evaluate for exceptions later.

When you break down that group, the general guidelines look like this:

What you apply universally will kill the productivity of half of your team. Let me say it again. Whatever you apply to everyone reduces productivity in half of your sales staff. You are going to need to apply a blended approach if you want to dramatically change your sales results as it relates to your team.

EXAMPLES

• CRM. If you start using CRM as an activity measurement tool, then your top 2 quartiles are over-managed and annoyed. You are wasting their time by managing them like your lower 50%. The unintended outcome is that the best performers get marginalized
• Selection Testing. You are not going to hire your next rockstar through testing alone. Testing is great for identifying potential. It keeps you away from hiring those who do not fit the job and dramatically increases the possibility of high potential candidates who will develop into top quartile producers. This process doesn’t guarantee all top quartile hires, but it does avoid almost all bottom quartile performers.
• Strategy. Half of your team is not prepared to learn the strategic and nuanced call-coaching information that you are providing. They will take misunderstood ideas to their customers and confuse them. Strategy is lost on people who need tactics and those people who want strategy are bored by tactical training that they learned a long time ago.

THE TRUMPS

Here is my rule of thumb if you have to make tradeoff choices rather than implementing all of these investments at once:

• Strategy trumps talent
• Talent trumps skills
• Skills trump activity
• Activity trumps inactivity

In best-in-class companies, there is an attention and investment in all four. Picking consultants has to be an outcomes first consideration. Decide what you want, then look at the changes in which to invest. As always, buyer beware. If anyone promises a fast and effective answer, it is probably neither. And if anyone promises a universal answer, they probably don’t understand the problem in the first place.

I recently sent this email to the head of sales for a company with whom we did our Accelerator 1.0 program. He is a new “Shaman,” (a little whale hunting speak from my book “Whale Hunting: How to Land Big Sales and Transform Your Company” with Barbara Weaver Smith), and he has decided to change the roles of one of his people to that of a “scout.” A scout gathers information and is the first contact lead qualification and interest generation.

Here’s what I sent:

“As you get started in your first Shaman role over your scout, consider the following:

1. Keep him on a short leash. He needs you to set daily goals on information (dossiers), and eventually people and calls. This isn’t over-management, it is just holding onto the bike while the kid gets used to riding without training wheels. 2. Feed him. You need to be in the media information flow around your key markets. Do a quick Google search every day, and send him an article or a new key word to add. Do something that keeps you connected to leading him in the work he is doing in the market. 3. Take the first hits. If he is going to make his first calls to prospects, make them with him on a conference call. Let him listen to you. He needs to get confidence in this new space. 4. Keep your foot on the gas. At this point, you need to change planning into action, so keep the intensity up of your expectations. 5. Read and react, Manning style. Look at the information you are getting from the process and make the recalibrations to what the market is telling you. Reset the dossier, the script, the benefit language and so on, but wait until after the first quarter to do it. You can’t run one series of plays and think you have it all figured out and blow up the gameplan. Get the data, then recalibrate.

Finally, I’m on your team. All of this is new or newer. Let’s stay connected, especially on the ‘what ifs?’ that invariably come up when implementing new approaches.”

I often see the sales process get stalled out in the scouting process. We build a fantastic sales process, great market message and approach but then no one makes contacts into the market. It’s like leaving a Ferrari in the garage and wondering why you are not enjoying it. (I have a couple of clients who are probably reading this right now and cringing. And yes, I am talking to you. Out of consideration, I won’t name names, but the states are Ohio, DC and California). The easy fall-guy for this situation is the sales person, but the real accountability goes back to leadership and management one-layer up. It is our responsibility to drive the planning into action.