sales process

DV Week Part 2-Direct Your DV Towards the Emotional Decision Maker

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We all make decisions emotionally and later justify them intellectually.  This is a fact of human nature.  We look to our emotional decision making to finalize our purchases.  Granted, few people need to access this area of their brain to buy a gallon of milk.  However, think of a significant purchase you recently made.  You decided based on how the item or service made you feel.  Later, you used the logic centers of your brain to rationalize/support why it was a good decision.  If your salespeople are aware of this distinction, they have a distinct advantage over your competition.

The emotional decision maker is the person who suffers the consequences of life without your solution.  They pay a price for not having your DV, whether it be slower times to market, higher failure rates, lower productivity, missed ship dates...it could be almost any painful outcome.

Here is the advantage for your salespeople:  Emotional decision makers are usually harder to find, easier to close, not as price sensitive, and can typically tell the technical buyer what to do.

Now that you know this, you must direct your DV messages towards the emotional decision maker.

Here are some guidelines:

  • Define what matters to the customer - There is no point in highlighting benefits a customer doesn't care about.
  • Be unique and demonstrably better - If the competition offers the same item, whatever that feature/service/product is, then that item is not your competitive advantage.
  • Be specific and measurable - If you can't be specific and/or measurable, you sound like every other competitor.  Get rid of the fluff.

If you need assistance in defining and directing your Differentiating Value, we are here to help.

4 Steps to a Bankable Forecast

Forecasts are a true management challenge for almost every Chief Revenue Officer.

One reason is that salespeople know that their lives are more enjoyable when the forecast dollars are increasing…whether that is an accurate forecast or not.  This deceptive approach creates forecast bloat.  This bloat can be a actual loss to manufacturing companies that build their products based on the sales department’s forecast.

So how to fix this issue?  I provide 4 steps that will transform your data into a bankable forecast in this classic article in Upsize Magazine.  Briefly, the 4 steps:

1. Define what CAN go on the forecast.
2. Build an audit trail.
3. Use an up or out model.
4. Give Incentives for forecast accuracy.

Each of the 4 items is built out in more detail within the article.  As they say, I recommend you read the entire thing.

How To Keep Your Forecast On Track

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Everybody wants a sure thing. They want to kick back and let the money roll in.

But sure as Lucy is going to pull that football away when Charlie Brown comes running, your “prospects” are going to come back with reasons not to buy your product or service. It’s time to put an end to that.

If you’re experiencing fluctuating quarterly revenues, your business may have landed itself a seat on the revenue rollercoaster. Structure is your key to success here. You know that well-run production boils down to thoroughly developed and managed systems; it works the same way with revenue. Accurately predict and generate revenue by operating under the four interrelated core processes that constitute a complete revenue system.

But before we discuss the four core processes, let’s clear the air on prospects…

It’s great when your sales team envisions endless prospects as they gaze upon the world of business. Don’t ever let them lose that sense of the market being theirs to win. But help them keep their feet on the ground while they’re reaching upward. There are ways to identify a lead as a true prospect, or a potential waste of time. Your salespeople should be shaking the money trees, not chasing down tumbleweeds.  Teach them to focus on the Differentiating Value that your offering brings, and to also ask Critical Qualifying Questions (CQQs) to uncover problems, frustrations, gaps, losses, and challenges that the potential prospect is experiencing.

Once you’ve got your people going after the true prospects, set them up to lock in realistic sales forecasts. Here’s a quick rundown of the four interrelated core processes:

5 M’s Sales Process:  Message, Motivation, Money, Methodology and Market

It’s likely that you already give major consideration to the power behind these words. When all five are achieved, you have the foundation for an objective, measurable sales process. Put them to work for you based on your business today – not hypothetical models.

Bankable Forecast Process: Build your forecast objectively, rather than as a conglomeration of the unique forecasts created by your reps, using the four qualifying elements of the 5Ms above: Motivation, Money, Methodology and Market. These are called the Four Aces, and should be incorporated into your forecast math. If your selling system is well defined and connected to a direct audit trail, you will be able to extract the objective data to report and determine accurately where you are in the qualifying/sales process for each revenue opportunity.

Results-Driven Incentive Process:

If the incentive system isn’t structured correctly, companies typically wind up losing their strongest performers. Focus on improving these seven aspects of your incentive process.

1. Structure your incentives. It is important to keep your company strong and growing, and new business is the best way to accomplish this. So why would you offer the same incentive for both new and existing accounts?

2. Remove the caps. If your salespeople bring value and profits to your company, why shouldn’t they be appropriately compensated for it? If you put a cap on your salespeople’s earnings, you put a cap on your company’s earnings, and may ultimately lose your best salespeople along the way.

3. Create an incentive based on your company’s desired sales outcome. If you want your team to sell to volume, make sure they’re incentivized toward it.

4. Define your sales cycle. Having an understanding of how long a piece of business takes to go from an initial contact to payment for goods/services delivered is critical for both business planning and incentive structuring.

5. Integrate the incentive plan into the business model; don’t allow it to be designed by other groups, such as finance. It’s important that the incentive process supports and rewards a salesperson’s measurable level of contribution.

6. Make incentive payments at customer payment, not based on orders written.  Clarify that incentives are earned only upon timely payment of the complete transaction amount. You can pay incentives at any time, but waiting until the payment has been received can save your company money, and legal risk.

7. Help out the low and non-performing reps. Address their performance issues and create a plan for their revival. Leave top leads for high performers to help ensure the business can be closed.

Skills-Based Staffing Process:

If you hire people who fit your core sales force profile, you have better odds for success. The skills and characteristics that best fit your sales positions will be defined by selling process, forecast process, and incentive process metrics.

Not every hire will be successful, but the odds are significantly better when an objective, more structured process is in place.

Once you have built these processes into your business structure, forecasting will move from hazy and hopeful guesswork to a clear component of your operation. And remember to update your revenue forecast with changes on a quarterly, if not monthly, basis. Your forecast is a living document that should be constantly reviewed and updated to reflect the changes in your business. Set it up correctly and it will serve your business’ success.

CRO Rule #5 - Differentiating Value = Premium Price

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CRO Success Rule #5
The breadth and depth of your Differentiating Value platform determines the amount of traction your product or service has in target market segments.  It also determines the level of premium pricing you can achieve.  If you have zero Differentiating Value, it means you are selling only on price.

In case you haven’t notice, Differentiating Value (DV) is a bedrock of all successful selling.  The more DV you have, the more valuable your solution is in the marketplace.  Here are 3 keys to refining your DV:

  • Define what matters to the customer – There is no point in highlighting benefits a customer doesn’t care about.
  • Be unique or demonstrably better – If the competition offers the same item, whatever that feature/service/product is, then that item is not your competitive advantage.
  • Be specific and measurable – Get rid of the fluff.  If you can’t be specific and/or measurable, you sound like every other competitor.

CRO Rule #2 - Are You Worth More?

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CRO Rule #2
If you’re not clear about what makes you worth more, you will always compete on price.

We call it Differentiating Value (DV) and it is a foundational truth to any and all successful selling.  In essence, it is the key to what makes you worth more.  No DV, no deal…outside of having the lowest price.  The reason why?  From the Chief Revenue Officer! book:

1. Prospects do not invest the time required to fully understand all of your products or service “brilliance,” and even if they try, they frequently map your promoted feature/benefit data points into their world incorrectly.

Because of that fact…

2. Prospects make better decisions when you translate your unique product or service capabilities into their world for them.

The Sales Funnel is Dead!

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The new age of digital disruption is re-engineering the world of sales.

Many companies today are doing “OK” selling more to long established customers where they have inside traction but their new-logo business is best described as underperforming (aka nonexistent). The tough question Chief Revenue Officers address in planning sessions is: Why can we sell to our current base but we can’t grow new base? The real answer is – the game has changed and new rules apply.

Consider the new B2B prospect profile:

►74% of B2B buyers conduct MORE THAN HALF their research on-line before talking to a salesperson (Forrester)

►90% of B2B buyers say they NEVER RESPOND to cold outreach (HBR)

►75% of B2B buyers NOW USE SOCIAL MEDIA to research vendors (IDC)

►74% of buyers choose the sales rep that was FIRST to add value and insight (Corporate Visions)

Now apply this profile to your business. Obviously the first obsolete concept is the dinosaur sales funnel and all associated sales/marketing programs that reference it as a productivity metric. The new revenue models are based on digital merry-go-rounds. Prospects can get on and off anytime (welcome to the 24×7 revenue day) and will leave no tracks indicating they were ever there if your digital platforms lack effective engagement offers and Contact Us is not an effective offer.

At RoundTable, we work on getting the new basics right including:

  • Sales cycle & productivity tracking tools
  • Lead generation & routes (channels) to market
  • Talent profiles for inside/outside sales roles
  • Merry-go-round platforms for creating new logo opportunities

We are experiencing a time of rapid change within the sales paradigm. You, as a CRO, will have to make significant adjustments to continue to stay in a revenue-leading market position.

We can help.