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Fix Sales: Could a Business MRI (BMRI) Make Your Sales and Profits Healthier?

 

By Mark Allen Roberts

The new year is underway and soon we will be ending the 1st quarter. When I ask CEO’s and Sales leaders: do you feel you will achieve this year’s plan? I hear I hope so, I think so, and more often than not I hear I’m not sure, it’s too soon to tell. I recently spoke at the NAW event in Washington DC and asked a room of CEO’s and business leaders to raise your hand if you felt with 100% certainty your sales organization would hit your sales and profit objectives in 2020…. not one hand was raised. Will 2020 be like the movie Groundhog Day and be another year like last year where more sales team’s missed quota than achieved it? Or will 2020 be the year you make strategic adjustments to transition your sales organization? In this post we will discuss how to run a BMRI for your business now and detect problems before the end of year when they can become terminal.

 

There was an interesting article in the Wall street Journal some time ago about a reporter who wrote about healthy lifestyles discovering he had a blocked Carotid artery although he was not currently showing any symptoms. As I read this article it reminded me of how many business owners, CEO’s and sales leaders I speak with have deep issues in their businesses that need some kind of an early warning, a business health MRI maybe to identify issues today that could be potentially crippling  at year-end or fatal in the future.

 

Meet Thomas Burton, age 68 a journalist covering the medical field, and he has spent years writing about strokes, most of which are caused by clots blocking blood flow to the brain. Now he faced a question as he shared in this article: “Am I going to become a weird punch line? As in: Did you see that the guy who writes all those stories about strokes just had a big one?” He felt healthy, ate right and exercised. He considered himself a young 68, but inside his body small fat cells were traveling in his blood and forming a clot.

 

He had none of the common stroke symptoms like:

 

Slurred speech

Temporary loss of vision

One side of face droop

Arm or leg weakness

 

As I read the article I learned 700,000 strokes a year are caused by blood clots and 130,000 of them end in death according to the American Stroke Association.

 

A simple scan, an MRI saved this reporters life. I was so moved by this article I signed up for a body scan myself.

 

This led me to a a couple of questions:

 

What if we could provide a scan for the health of your business today and predict the future health of your business?

 

If we used a scan of your businesses health today could it help us prevent your business having a stroke and or going out of business?

 

Would you do it? Why or Why not?

 

What if we had a Business MRI (BMRI) and we could scan your business and share specific areas that need to improve before they become fatal?

 

For over 30 years of my career I was hired to “fix sales problems”. The first thing I would do is assess various parts of the business, understand the voice of their customers today, and determine the organizations’ overall health then work with the leadership teams to improve any areas that are not performing or could be a risk for the organization in the future. This process I used was the same but the time to complete it varied from 3-6 months to a year. (but that was many years ago) As a leadership team we would find, divide and concur the data and I would conduct four legged sales calls with the sales team and visit all the customers who represented 80% of the profits. I was assessing the sales team skills, beliefs, motivation, process, strategy alignment and the tools they were using. I was also capturing the voice of their customers today. Luckily today we have the technology and systems to complete a business health scan (BMRI) in less than three weeks.

 

What if, buried deep in your transaction data and your sales team itself are the answers you are seeking?

  • How effective are we?
  • How much more effective can we be?
  • How long would it take?
  • Does my sales team have the beliefs, motivation, skills and systems support to drive the sales and profit growth I need?

 

Could clots be forming that can cause a sales and or profit stroke in your business or worst?

 

If we could run a diagnostic scan of your sales and your overall business health what would we look for?

 

I would suggest seven (body) parts of your organization to scan.

 

Voice of your customers

 

Net promoter score

Customer satisfaction score

Company knows why they win and why they lose sales

Understand your customer’s buying criteria today

Understand your customers buying process today

Understand the business of your customer’s business

 

 

Systems and Processes

 

Sales Plan

Sales Process that is buyer centric

Systems to support profitable growth

Sales skills and competencies

Is the CRM your single point of truth or a box of lies?

Sales Support

Excess capacity

On time shipments

Shipment accuracy

 

Marketing

 

Web page rank

Web bounce rate

Web content in the form of problems you solve

Testimonials

Lead generation

Quality of leads generated

Cost per lead

Lead rolling 12 months close rate

Case studies with economic impact

Social Media presence

Digital marketing competence

Ease of online engagement

Content

Content, thought leadership positioned in key channel associations

Leads from events

 

 

 

Sales support

 

Ideal customer profiles

Buyer personas by channel and product type

Sales Enablement

Sales tools

Sales Management Skills

Sales Manager Coaching Mastery

 

 

Sales Mindset

 

Beliefs of your salespeople about selling

Motivation of your salespeople

Sales team Accountability

Will they sell?

Emotional intelligence

Figure it out factor

Empathy

Beliefs about your pricing

Beliefs about your quality

Beliefs about the economic value your team delivers

 

 

Sales Skills

 

Qualifying

Discovery

Value based sales skills

Product knowledge

Follow up

Build and leverage relationships

Account management

Project management

Problem solving

Critical thinking

Do what you say you will do

Listening, active listening skills

Business acumen

Market knowledge

Understanding of your customer’s customer

Understanding of how your customer makes profit

Negotiation skills

Closing skills

Understanding of company strategy

Understand sales behaviors that support company strategy

 

 

Metrics and Data

 

On boarding new sales associates and time to revenue

Sales skills assessment

Sales training content, time and delivery method

KPI’s (leading and lagging indicators)

Sales $’s

Cost of sale by customer

Sales growth trend last 24 months

Cash flow

Average sales profit last 24 months, total, by region, by salesperson

Net profit by customer

Share of wallet by key customer

Customer retention %

Customer defections $’s

Net new customer $’s and profit

Net new product and or new service sales and profits

Price override %

Cost of new customer acquisition

Sales turnover (planned and unplanned)

Sales close rate

 

Once we scanned your organization for all of the above, we could diagnose the overall health of your business today and predict the future success of your organization. We are establishing your current state.

Most of the teams I have served have a much clearer vision of their future state they desire than the current state they are working in today. We look at your business and customers today then create a plan, connect the dots between today and where your team desires to be,

 

What would you add to the list?

 

What else would you want to diagnose?

 

How healthy is your business?

 

How healthy is your sales and profits?

 

Are your salespeople doing the sales behaviors you need today?

 

I hear some of you saying: “Wow Mark that’s a lot of work, I am already buried in work and so is my team how will we find the time to gather this information?

Or another common concern: ” This sounds like a pretty big change and we are not typically strong at change management.”

If you have been following any of my articles or attending webinars there is an assessment tool and process to gather the above data points. We leverage technology to gain the insights we need to shape a healthy business plan for the future.

If you want to DIY your assessment have at it. Before the tools we available today I helped teams gather this much needed data and it typically took 6-8 months.

With the rate of change we are experiencing in this VUCA economy by the time you gathered everything yourself it may not be relevant anymore.

The other consideration you must assess is the organizations culture if you want to DIY your sales and profit health project. Your organization culture is like the blood flowing throughout your body. It touches every organ or as in this case every process and system.

 

Culture 

Innovative or Protect the Fort?

Comfort with change?

Leaders have fixed mindset?

Matrix structure, top down, very flat?

Decision making process?

Leaders open to new ideas or do they have deep biases that may slow down the process?

 

My recommendation is you want a 3rd party to give your business a BMRI so the data is not biased.

 

Be prepared some of what you learn will be great and confirm your beliefs and some of what your 3rd party discovers will make them seem like a Heretic. There is a tremendous value of hiring a heretic when it comes to adding value to your bottom line.

Keep your focus on the desired future state, processes and customers.

Create cross functional teams to help you get there.

You have a smart and experienced team give them data and watch them shine.

When you find the above you will complete a health assessment of your business.

You will have all the data. Where the art of this comes in is seeing all these puzzle pieces and knowing how to assemble them into a plan your team can execute that drives short term gains while establishing long term profitable sustainable growth.

 

If you want help let’s chat.

 

I can help you answer the above questions in 3-4 weeks and establish your current state, then together we can collaboratively build your sales and profit health plan.

 

 

 

 

Voice of Customer Identifies New Markets and New Product Applications

 

 

 

 

Capturing and leveraging the voice of your customers is a powerful tool to grow your sales. In addition to helping your sales team realize explosive growth in sales and profits, it also can identify new markets.

My daughter and son in law just bought their first home. Like a lot of starter homes it has a number of fixer upper projects. Each room needed painting, the kitchen cabinets needed updated and the wallpaper in the bathroom had to go. What I learned is, as dad’s we typically get the jobs no one wants like removing layers of wallpaper.

It is a small bathroom but the first day I spent four hours removing wallpaper. I shared my frustrations with a friend and without missing a beat she said…Did you treat the walls with downy fabric softener first? What? I was using a tool to score the wall and a steamer, what will fabric softeners do? I figured it could not hurt so I tried it.

It turns out this is something home remodelers use often to make removing wallpaper much easier and quicker. I searched the Internet and there are article about using fabric softener you typically would buy for your clothing for stripping wallpaper. There is even a You tube video that shares how using fabric softener helps making wallpaper removal easier. A do it yourself website talks about using this process.

It worked so well, if Downy did voice of customer research they might offer small 4-6 ounce bottles at Home Depot and Lowes in the wallpaper isles. I would recommend they charge between $3.50 and $4.95 for these small convenient bottles to be mixed perfectly with one gallon of water when stripping wallpaper.

 

How do your customers use your products and services?

 

What problems do your products solve?

 

Could you have a new market you are serving today that you can expand?

 

Take the time to capture the voice of your customers and learn how they buy, what they need to buy, and how they use your products.

 

You may find new markets and new distribution channels for current products that can grow into profitable new business.

Who Owns the Voice of Your Market and Voice of Your Customer? ..Hint (not sales!)

 

In my last few posts I have been sharing the power of capturing the voice of your customers and voice of your markets. Understanding how your buyers buy today, the journey they take and the criteria they must have is the quickest way to increasing sales. Who should own the voice of the market and customer? The answer may surprise you: Not Sales! In this post I will share who should own the voice of the customer and share a short video on the impact this information will have.

Who owns the voice of the market, voice of the customer in your company?

Before we unpack this topic we need to understand the differences between the voice of the customer (VoC) and the voice of the market (VoM).

Voice of the Customer

“Voice of the Customer (VoC) is a marketing research technique that encompasses the collective insights of your customers’ needs, wants, perceptions, preferences and expectations.”

Iperceptions

 

Voice of Market

Voice of the Market (VOM) is different in that it incorporates input from the greater market. The market contains not only your customers, but also those who chose not to buy your solution – those who bought someone else’s product and those who just didn’t make a decision.”

– On Product Management 

 

 

Capturing the voice of your customer (VOC) is critical to providing your customers the best overall buying experience and growing sales profitably. I also use the voice of the customer to help me understand how customers describe the problems my clients solve in similar markets. The Voice of the market is even more powerful because it not only captures your customer, but it also captures prospects in your market you want to serve as well as customers you once sold. The voice of the Market ( VOM) helps you scale your solutions to unresolved market problems to new customers in the markets you serve.

 

Who owns the voice of the market and customer?

 

Marketing!

 

Why?

 

A few reasons I have experienced over the years:

 

First, you want sales selling. I don’t mean to sound trite but this is about focus. You want your sales resources selling and not conducting market research. You do not want them doing any behaviors that do not align with their specific objectives and hitting their sales numbers. They need to be driving to serve their customers and solve their unresolved problems.

 

“Diluted Sales focus causes diluted sales results.”

– Mark Allen Roberts

 

Second, you want unfiltered feedback from your customers and markets. What if the reason why buyers don’t buy is the most common reason: the buyer-felt sales did not adequately understand the problem to be solved so they did not trust their proposal to fix the problem. Will sales tell you that? Maybe but it would be a difficult thing to share. For example, what if “the why “your customers do not buy more is they were unaware of the new products you introduced over a year ago?

 

Third, your customers have a relationship with your salesperson. It would be very difficult and uncomfortable for them to share concerns directly with the salesperson that calls on them. However your customers will share feedback if asked correctly to give them a better overall buying experience.

 

Forth, your salespeople are trained to sell. Great right? Not when it comes to understanding your buyers and how they buy. Your sales people may hear something then start selling instead of actively listening and capturing the entire thought. The quickest way to shut down a good voice of customer, voice of market conversation is to try to sell through objections the buyers shares.

 

Marketing owns the voice of the market and voice of the customer.

 

If you are like a number of companies you may not have marketing team members experienced conducting interviews. If that is the case I highly recommend you hire a 3rd party to interview your customers and markets. This is by far the best method of gathering what your buyers need and how they buy today. The outside 3rd party will interview your customers, customers you lost, and prospects you always wanted to be customers. Another approach would be to have a senior member of the leadership team conduct these interviews. As VP of sales and marketing I would often conduct this research.

 

The only companies you  should never interview are new companies who are currently at some stage of the sales process. You do not want anything to interrupt the flow of the sale through the funnel. I have seen companies inexperienced with this process call prospects they are quoting in an effort to help close the sale faster and lose the sale entirely.

 

Make sure when working with a 3rd party you are clear about the deliverables.

 

Possible market work deliverables include:

  • Present raw data
  • Map buying journey
  • Identify buyer personas
  • Prepare a summary report / Identify shifts and trends
  • Prepare a summary report and recommendations based on the raw data

 

When I conduct customer and market voice research I present a summary report and recommendations for a specific project fee based on the number of people interviewed, the time to accomplish the project, and how the customers and markets are interviewed. Some clients ask I personally meet with 2-5 of their customers so the cost is higher than a phone interview due to travel expenses.

 

I feel I need to warn you at this point: In this capturing voice process you will hear a number of great things, things that will make you proud of your team. You will probably also hear things your customers believe to be true (their perceptions) that may or many not be true. Keep in mind your customer’s perception is their reality and that is what you must use in your strategic adjustments.

 

After the market work your team will be nervous. Sales, marketing, operations and even quality will be nervous about what your customers and markets share. As the leader in the organization you must set the stage for this exercise. When I work with teams I have four meetings:

 

  • Project launch meeting with senior management team – I share what we will be doing, how we will do it, who we need to speak with and what some outcomes may be. I emphasize this is not a witch-hunt, but an opportunity to learn how to make strategic adjustments that insures we all hit our numbers. This meeting is about education and expectations

 

  • CEO/President/VP of marketing/VP of sales – In this meeting I share my summary report and some specific customer interviews with raw data and recommendations, adjustments to sales process and needed new sales tools. This meeting is about understanding opportunities not finding a throat to choke. We decide what we will share with team and in what depth.

 

  • Senior leadership team – present summary of finds and recommendations without specific customer interviews. I ask the CEO and other leaders to prioritize the action items and commit to investment if required in this meeting. This meeting is about gaining team understanding and commitment tied to outcomes and shaping a plan to meet what buyers need today.

 

  • Sales VP, Marketing VP, sales and marketing teams– present findings and design a new sales process and list new sales tools needed. Conduct 3-4 sales trainings over 6-8 months and provide coaching as needed. This first meeting is about applying the work your team has committed to do and reinforcing new behaviors. This is a great team building exercise to tear down any silos that have developed over the years. Following trainings are to reinforce new behaviors and coach team members through any difficulties they are experiencing.

 

The number and severity of the adjustments needed will depend upon the market and customer feedback as well as the senior management team’s prioritization; most teams learn a few opportunities, misperceptions of customers and make 2-5 strategic adjustments and add new sales tools. It is not unusual teams create a project roadmap with phase gates to tackle findings. You can have a senior manager lead the project internally or I have been hired to hold team members accountable to their assigned deliverables.

 

Once your team understands the voice of your market and voice of your customers you have the foundation for a strong plan to hit your sales and profit numbers.

 

Does your team understand the voice of the customer?

 

Does your team clearly understand the voice of your market (s)?

 

Who owns the voice of the customer and market in your organization?

 

When was the last time you gathered this information?

 

Are you sure your brand is in sync with your customer expectations?

 

How often do you feel you need to gather this information?

 

Market leading organizations achieve their sales and profit goals on a consistent basis.

They accomplish this by spending time understanding how buyers buy, what they need to buy, and why they don’t buy.

 

They take current market data and adjust their plans to better serve their current buyers and markets.

 

Would your team like to realize a 10X sales increase over the next 6 -8 years, and or a $38 million sales increase in 18 months like the companies I have shared recently? If so, it involves capturing the voice of your customers and voice of your markets which is a key part of the no smoke and mirrors process.

 

 

 

 

 

 

How Yeti Realized Sales Leadership Nailing Their Value Proposition

 

 

In my last post I shared a process to conduct a value proposition audit. The goal of this exercise is to insure the value proposition your sales team is communicating still resonates with your buyers. Once you understand how your buyers buy and key buying criteria you can shape your value proposition so it instantly connects with the buyers in your market. One company who has done an excellent job of this is Yeti.

 

 

Ryan and Roy Seiders identified a market problem they understood intimately. The coolers on the market were just not holding up for outdoor adventurers. The lids would cave in, handles would break, and latches would snap off and gave them a bad overall experience. Could Colman or Igloo or others owned this market for high-end coolers? Yes…if they were listening to problems their users were having. They both were in the market long before Yeti.

 

Like Gunner Kennels, these two brothers set out to solve a market problem. In 2006 they were on a focused and simple mission…

 

Build a cooler we’d use everyday if it existed. One that was built for the serious outdoor enthusiast rather than for the mass-discount retailers. One that could take the abuse we knew we’d put it through out in the field and on the water. One that simply would not break.”

img_0024

 

The more intimately you understand the problem to be solved the clearer your value proposition will be. Just as I shared how InVue has a simple yet clear value proposition, so too does Yeti.

 

What started out as a quest to make an indestructible cooler has led to other products the market needed when they searched for problems to solve. Each of these products are designed based on customer feedback.

 

“ We decided early on product innovation would come from necessity and first hand experience”

 

Once they solved the problem for outdoor enthusiasts they asked themselves who else might have similar problems and they share this …

 

We are so glad we were not the only ones looking for a Yeti. Today it is the cooler of choice for outdoor enthusiasts, pro tailgaters and back yard barbecue kings.”

 

As the company continues to solve unresolved market problems I believe they will add other buyer personas to their list. For example, my son is a police officer and he and all his other officers use Yeti to keep their coffee warm and their drinks cold.. As my son puts it…

 

“I can put some ice and a beverage in my Yeti rambler and I will have ice cubes in my drink at the end of an 8 hour shift.”

img_0023

 

I now see road construction crew members, firemen and other service professions paying a premium to solve their problems with Yeti products. Knowing Yeti you will soon be seeing other indestructible products for service professionals who work outdoors.

 

When you understand the problems to be solved the burden is on you to communicate how you solve them. Yeti does and excellent job in their point of purchase that only a market leader would do.

img_0025

 

So how about your company and your market…

 

What unresolved problems are your buyers facing today?

 

Are you going to build a category based on an unresolved market problem?

 

What if your competitor finds it before you do?

 

Is there any reason why you would not want to do a value proposition audit to find unresolved market problems?

 

Fix Sales Problems: Do You Understand What Your buyers Value Most?

 

In my last post I discussed the need to quantify the value the buyer experiences to increase your sales. In a typical sale the buyer has three options; the buyer buys, the buyer buys but not from you, or they do nothing. Market leading companies make it their job to understand their buyers’ problems and what they value most. When you clearly understand the market and problems to be solved creating a value proposition that instantly resonates with buyers is easy.

What is the buyers’ cost of doing nothing?

What do your buyers value most?

Let’s say you sell products that prevent people from stealing products on display in retail stores.

Having served this market back in the late 1990’s we asked a lot of questions and what we found back then was:

  • If a product is behind the counter because the retailer is concerned with theft, sales decrease 50% to over 75%
  • If a product is out ‘LIVE’ on the retail shelf without any mechanical security device or security tag you can expect over 50% theft
  • If product is behind a counter the overall customer buying experience is poor (this costs you a sale now, and more concerning with future purchases)

But that was old school…. check out this market leader in helping large retailers increase their sales!

InVue’s value proposition is focused and clear.

Their value proposition demonstrates they know their customers, their customers’ problems, and they have solved those problems completely.

“InVue develops and markets security products that enable retailers to openly display their high theft merchandise with confidence.”

They not only control theft, they help their customers increase sales as they share below.

“Displaying high value accessories next to hot selling smart phones and tablets will increase your accessory sales over 20%.”

This is a great example of a B2B company that took the time to do their market work and understand the buyers and the problems they want solved. When I speak at conferences I often have someone challenge me; “ I understand this knowing your buyers stuff when it comes to B2C products but I don’t see how it applies to B2B” My answer is it is absolutely critical to understand your buyers, the buying process they use and the criteria they must have to make a purchase. This is the case in B2B and B2C. B2B companies who do the market work prior to launch realize greater sales increases and higher profits.

 

How about your company?

 

Are you solving buyer problems?

 

What process does your team use to identify buyer problems?

 

How is your sales performing to plan this year?

 

The reason why some companies consistently achieve and surpass their sales and profit objectives is they understand their market, buyers and buying process.

Increase Sales: How Do You Establish Value?

 

 

 

In one of my last posts on pricing your products strategically I discussed the need to understand the value your product or service provides to the customer. Not long after that post was written I had a phone call from a small business owner asking: What is the best way to establish value for our buyers? In this post I will share some advice an excellent example of establishing value.

Before we get to that content I want to ask you a quick question:

Why do 42% of business start up’s fail?

 

The answer is they launched a business that had no unresolved market need. They did not clearly and completely understand the problem to be solved.

 

This group of entrepreneurs took the leap and often loose all their savings, their children’s college fund and so on. Why?

 

They failed to do their market homework before launching their business. Some questions they needed to answer include?

 

What is the problem you are trying to solve?

 

Who has this problem?… and how many others are like them?

 

Is the problem Urgent and buyers feel a pain to solve it?

 

Are buyers willing to spend money to solve it and how much?

 

It is not just small companies who make this mistake. Every day products and services are launched because companies can and not because they should.

 

How do market leaders, regardless of industry or company size consistently launch and grow their business?

 

They establish a high-perceived value for their products!

 

To do so they must first intimately understand their market, and the problems their buyers have.

 

With this information they solve the problem completely.

 

Then they make a compelling value proposition that resonates with their buyers.

 

They share this value in communities where there buyers belong.

 

Lets take a look at a great example of a company that established value: Gunner Kennels.

Man’s best friend deserves man’s best kennels

 

Gunner Kennels makes dog kennels. On the surface that does not sound too interesting. However if you have dogs, particularly hunting dogs they know you. They know the problems you often face when transporting your dogs and they solved that problem brilliantly.

 

Every detail of this kennel is built to make our traveling experience the best and safest it can be, whether we are on our way to the Mississippi Delta for a duck hunt or just running errands around town. Gunner has been my co-pilot since the day I drove to North Alabama to pick him up.

I built this kennel for my dog Gunner and for anyone else who loves seeing their dogs light up when you ask them to “Kennel,” and they know they are tagging along for your next adventure.

-Addison Edmonds, Founder

 

I wish I had found this company years ago! The downside of this crazy life of helping company’s fix their sales problems is we moved our family a lot. One of the biggest stress points for us as a family was safely moving our dogs. Will my Labs be safe in the belly of this big airplane? Will the baggage handlers be careful with my family members? What if something shifts in the cargo area and their crate gets crushed? (All these thoughts and more go through your mind)

 

Check out his video that demonstrates how much this company understand the needs of its buyers and how they establish value.

 

 

How about your company….

 

How do you establish value in the minds of your buyers?

 

Do you know how to quantify that value?

 

What techniques have worked best for your team?

 

When you clearly understand your market, buyers, how they buy, and the criteria they use to make buying decisions you can establish value.

 

In my next three posts I will be sharing other innovative companies who not only beat the odds of start up failure but also are extremely successful because they established their value in the minds of their buyers.

Fix Sales Problems: Price Strategically

 

 

 

If you had to pick one pricing method that consistently produces greater sales increases, increased market share and increased profits what would it be?Your  sales team has done the heavy lifting… and they have made it though emails ,voicemails and finally met and presented a targeted buyer. Your team has used social selling and selling tools designed specifically to get to this phase of the sales process and build trust along the journey. The buyer feels your proposal could solve their problem and asks the big question: “how much? What is your price?” Would it shock you to learn most companies spend more time negotiating the lease agreements on their office copiers than they spend on price strategy? There are many ways you can price your product or service.

 

Price is one of McCarthy’s four P’s of marketing. Pricing is a critical part of any value exchange. Why is it price often receives the least amount of research and strategy?

 

Let’s start with a few definitions….

 

What is the definition of price?

 

Price is the value that is placed on a particular product or service as the result of a number of variables, research and understanding of risk.

 

What is the definition of pricing strategy?

 

A pricing strategy looks at market conditions, competitive pricing, industry margins, costs, the dollar value of the sale,the product life cycle, the products uniqueness, as well as other factors.

 

What are the most common forms of pricing?

 

Cost Plus Pricing- as the name implies you determine your cost to produce, overhead cost and mark the product up based on the profit you wish(need) to realize. The trouble with this model is it is internally focused and not market driven. With this model you run the risk of pricing your product to low or too high. You run the risk of loosing sales you could have (and should have ) won and not making the maximum profit your product could have realized. Companies who practice this method often ask for “another kick at the can” when they are informed their price was too high. (In my post discussing kick the can I share the reasons this strategy is dangerous.)

 

Low cost strategy– in this model you price your products low and you have structured your company to have low overhead and low marketing  and selling costs. In this model you might hear someone say: “ the margin is low but we will make it up in volume” We often see this in commodity products where price is the only main differentiation .

 

Predatory pricing- you price your product low to “get your foot in the door” of an account or market. The intent is the price will rise after a specific period of time. Companies struggle in the price increase phase if they have not established a strong value proposition in the mind of their buyers before the price increase occurs.

 

Premium pricing- you price your product high. This is associated with a product or service that has little or no competition of similar quality and or performance. These kinds of products have clear distinction in the market place and buyers place a high value on them. These market driven, unique products are seen as the best of best and buyers are willing to pay for them.When you hear their names you think best in class; Gunner Kennels, TenPoint Cross Bows, Yeti coolers, InVue Security Products, and many more. Each of these companies have other substitute products in their markets and many competitors. What they all have in common is focus. The made it their job to understand their buyer, the problem the buyer wanted solved, and they solved it completely.

 

I have seen a number of companies try to be more strategic in their price methodology. Where I have seen some companies struggle is only talking to their current customers when doing market research. This is the most common mistake. The difficulty is, for most companies, your current customers only represent approximately 30% of your total market. If you only speak to your customers you are missing 70% of the market’s voice. Keep in mind that 70% is buying something similar to your product and they are not buying from you for a reason. You really need to know why some buyers buy from you and why some do not. Without this critical market data companies run the risk of becoming internally focused on what they want/ need to make. This one of the four P’s has more emotion tied to it than any other. One of the toughest sales I often have to make is not in the market with large customers, but internally to help companies want to be market driven.

There is an excellent article on the advantages of being market driven you can read here. A quote from the article shares;Your strategy should be driven by the needs of the market.  Becoming market-driven is critical to intentional product success.

Some of the advantages of being market driven that i have experienced include, but not limited to:

  • Quickly deliver new and improved solutions that address the changing needs of your markets.
  • Quickly identify and understand the changes in your market.
  • Higher than industry average profits
  • Faster sales growth than competitors
  • Higher sales close %’s

The best method of pricing I have found is “strategic pricing”.

-Mark Allen Roberts

In strategic pricing you have done your market homework. You understand the value of your product to your customer and you can quantify it. It is a marketing decision (not an accounting exercise) that is the result of market knowledge, knowing your buyers and buyer personas, competitors, substitute products, buyer process and buying criteria. Strategy work is hard work and it is not done overnight.

 

As you can see pricing is not as easy as some people believe. It takes a great deal of strategic thought and that is why a number of companies price their products incorrectly.

 

As consumers we are all buyers. Buyers are wired to spend until we experience pain. This is based on the field of neuroeconomics. As a buyer you stop spending when the perceived pain of spending is greater than the perceived gain. Your marketing team must determine that tipping point in their research and apply it to your strategic pricing.

 

If you want to experience rapid sales growth,increase sales close rates, increased market share and higher profits you must start strategic pricing. The burden is on your team to clearly understand your market and how your buyers make decisions. You must understand your distinctive competence and share it in a value proposition that resonates with your buyers.

 

What kind of pricing method does your team use?

 

What are some examples where cost plus pricing may work?

 

Has your team used strategic pricing? Any stories you can share?

 

Would you say you are market driven or internally driven? 

 

A cup of tea, and why strategy work is so difficult

 

Why is strategy work so difficult? What is the secret to developing strategy that drives profitable sales growth? Why will 90% of strategic plans fail? There is a high probability as you read this post your sales and marketing team have already decided the strategy your senior leadership team developed is not working and have retreated to the way we have always done things around here. Why? …and more importantly what can we do to create strategies that result in repeatable profitable sales growth? In this post I will share why most strategies are doomed to fail and how to write strategies that result in adding value to your business.

First we need to be grounded in common definitions because there is a lot of confusion when it comes to strategy work.

Strategy

Strategy is a careful plan or method for achieving a particular goal usually over a long period of time.

The skill of making or carrying out plans to achieve a goal

 

Marketing strategy

A marketing strategy is a process or model to allow a company or organization to focus limited resources on the best opportunities to increase sales and thereby achieve a sustainable competitive advantage.

Product Strategy

Is often called the roadmap of a product and outlines the end-to-end vision of the product and what the product will become. Companies utilize the product strategy in strategic planning and marketing to identify the direction of the company’s activities.


Sales Strategy
 

A sales strategy is a plan by a business or individual on how to go about selling products and services and increasing profits.

Tactics

Means by which a strategy is carried out; planned and ad hoc activities meant to deal with the demands of the moment, and to move from one milestone to other in pursuit of the overall goal(s).

Now that we have some common understanding with  words we hear often throughout the day we need to identify the leading reason why 90% of strategies (like those your team is supposed to be executing now) will fail.

One word: ….Hubris

Unlike the words strategy, marketing strategy and tactics, hubris is not a word often used so here is a good definition:

Hubris is from Greek, where it meant “excessive pride, violating the bounds set for humans” and was always punished by the gods. We no longer have the Greek gods, so in English it just refers to over-the-top self-confidence. If you call yourself the best in something, you better have the goods to back it up, since too much hubris can lead to embarrassment and humiliation. It’s an age-old human failing: pride goeth before the fall.

I have been very fortunate to have great mentors in my life that gave me gifts. One gift I use in strategy work ironically came to me through my Karate instructor Sensei Bill Marcum. I was attending Kent State University and I needed a non business elective so I took Isshin ryu Karate. After a few classes the instructor said she thought I seemed to catch on quick and I might consider joining the Isshin Ryu Karate club on campus go deeper than her class can offer.

I joined the club and the first year or so was just the basics and I grew anxious to learn more combinations of moves I could use in a self defense situation. The time came for me to start Kumite which is free style fighting. I found when I practiced all the new moves I was learning I could repeat them without much correction. When I stepped into the ring I went back to boxing which I learned at an early age. Looking back part of it was hubris….pride, not wanting to loose, not wanting to be embarrassed and the bigger part was what I was learning was new and often strange compared to what I have known for years and that I knew worked. However I was never going to become skilled in  the new , better techniques if I did not start doing them.

My instructor pulled me aside one day and read me a story titled; A cup of Tea out of a book: Zen Flesh, Zen Bones and it went something like this..

A Cup of Tea
Nan-in, a Japanese master during the Meiji era (1868-1912), received a university professor who came to inquire about Zen.
Nan-in served tea. He poured his visitor’s cup full, and then kept on pouring.
The professor watched the overflow until he no longer could restrain himself. “It is overfull. No more will go in!”
“Like this cup,” Nan-in said, “you are full of your own opinions and speculations. How can I show you Zen unless you first empty your cup?”

Just like Nan-in, my instructor Sensei Bill could not teach me new techniques that will feel and probably look awkward at first until I un-learn what I have been taught and believe to be true. The same is true when doing strategy work to fix sales problems.

I found a great quote in a book I am currently reading by Greg Bustin about accountability I want to share…

FullSizeRender (2)

How do you develop a strategy that works and results in profitable sales growth? You need a few heretics on your team to challenge truths and beliefs your strategy is built upon. In Art Kleiner’s book titled: The Age of Heretics , Kleiner‘s definition of a heretic is:

“a visionary who creates change in large-scale companies balancing contrary truths they can’t deny against their loyalty to their organizations.”

He discusses how managers get stuck into a rut and need heretics to point out new points of view to get past the deadlock and move forward. Later he describes some as “rebels unwilling to kowtow to the corporate bureaucracy.”

I also have used this quote by Peter Drucker often to keep me motivated…

“My greatest strength as a consultant is to be ignorant and ask a few questions.”

 

If your team wants to be one of the 10% of companies that have strategic plans that work…empty your tea cup of how you think the market works, how we do things around here, how things have always been… Fill your cup with current market data gathered from both customers and prospects recently sharing why they buy and do not buy today.

Strategy work is difficult so we should not be surprised so many strategies fail to be executed and fail to deliver on their promises to increase sales and profits. To insure your team does not fall into the trap of assuming why buyers buy and why they don’t you must tune into your market on a frequent basis and adjust.

Does your team have a strategic plan that is driving explosive sales growth this year?

When was the last time you conducted a SWOT analysis?

Do you have a culture where your salespeople are safe to share market truths?

When was the last time you adjusted your value proposition?

Are you a salesperson asked to sell with a value proposition that is no longer true? How’s that working for you?

As the leader of your organization is it time to conduct a value proposition gut check?

If you would value more to read on this topic may I suggest?

Report: How to Make Your Number in 2016

Your “gut” and “intuition” are not enough…today

Why do 78% of Sales Strategies Fail? … Culture Must Come before Strategy

Will Your Strategic Plan Work?

9 Easy Steps to Developing a Marketing Strategy that Drives Business Results

Differentiation – Is Yours Real or False?

7 Key Steps to a Growth Strategy That Works Immediately

Are “Politically Incorrect Market Secrets” (PIMS) Stalling Your Sales Growth?

Stop Asking Your Salespeople to “Sell Naked”

Increase Sales and Profits; Create Distinction!

Stop Making Your Salespeople “Assume The Position” …

 

If you have other content on the subject of how to create strategies that increase sales please add a link in the comments section.

Pic credits http://www.freshesttea.com/black-tea

Three Methods to Understand Your Buyers and Markets Today …ASK!



It is not unusual the simplest of strategies are often the most difficult for some people to execute. Why? Why is it so important to understand buyer and market needs today? Sales teams who understand their buyers, how buyers buy and what they need to make buying decisions today achieve their sales goals. When salespeople approach buyers and their markets with dated value propositions and not address current market problems sales teams fail to hit goals. In this post I will share three ways to better understand your buyers and markets.

In my last post I asked a question: What if I told you growing your sales profitably is actually “Simple” if you focus on one strategy? I shared the key to growing your sales and profits are: know your customers and markets. So far no one argues with that premise. However the behavior that needs to change (and quick) is companies who assume they understand their markets based on dated information. They have leaders who believe their gut and intuition that have gotten them this far will help them lead their teams to future wins. My argument is, as I shared in 2009, the sales game has changed and your gut and intuition are not enough to win today. We serve dynamic markets that are constantly changing and shifting. A value proposition that resonated with buyers six months ago may no longer connect due to a shift in economic conditions and or a new technology.
“Companies who build strategic plans based on dated market information fail. “
– Mark Allen Roberts
In a recent post by SBI they asked the question: Could last year’s market research be killing your chances to achieve next year’s sales goals? If you have not read this post I highly recommend you take a few minutes to review it. As shared in their post:
“Strategic alignment is the ultimate goal, but it’s not a fixed destination. It’s a moving target. That’s because market conditions are always in flux. If you continue to rely on outdated market research, you’re not just taking a step backward. You’re returning to square one, year after year.
How do you stay current with your buyer and market data to insure your sales strategy leads to goal achievement?
How do market leading companies equip and empower their sales teams to consistently achieve sales targets year after year?
In this post I will share three ways I have used to insure the sales and marketing teams have value propositions that resonate with their buyers and markets.
The best technique is time in the market. I enjoy working with my sales and marketing teams in the field with what I have referred to in previous posts as “four legged sales calls”. You shadow your team members with current customers and as they call on new customers. Your sole purpose is to listen and observe. I have to warn you though it is very difficult to not jump in on a sale that feels like it is heading south or take over the call that seems to not be leading to a close. I highly recommend you listen with the intent to learn rather than to show what you know. You must put on a market research hat and leave your sales hat in your reps car to receive the most benefit. In this post I shared things I am listening for and setting out to understand;
• What are the buyers’ buying criteria today?

• What is the buying process?

• Who else is involved in making buying decisions? 

• Does your sales process mirror the buying process?

• What sales tools does your salesperson have and which ones do they use? Are they current, or something they created themselves?

• Does the buyer have other problems they verbalize but your salesperson fails to hear?

• Where does the buyer turn today when faced with an unresolved problem? …the internet, a trade journal, calls a local representative…

• What other products does your buyer buy from competitors that they could be buying from you?

• What % of the time is your salesperson listening versus talking? ( my favorite indicator)

If you are experiencing “death by meetings” at the corporate office and find it difficult to meet with buyers in your market I highly recommend win-loss analysis . I prefer win-loss calls face to face however if this cannot occur I have seen where win loss phone interviews have proven extremely valuable. If you have not heard of win loss analysis I shared how I use it and common questions I ask here. After approximately 12-20 phone interviews you will quickly see trends on why buyers buy from you and why they don’t. You will discover the buying process and criteria your buyers are using today to make buying decisions. Market leading companies strategically plan win loss analysis as an ongoing strategy to stay tuned in to their market.
A new technique to understand your buyers and get target buyers to share insights on their problems and how they buy is shared in the book: Ask… The Counter intuitive Online Formula to Discover Exactly What Your Customers Want to Buy…Create a Mass of Raving Fans…and Take Any Business to the Next Level , by Ryan Levesque. I just finished reading this new book and found it very useful.
In this book the author shares a proven process he developed and personally uses to understand customers, get customers to speak to you, and ultimately fall in love with your product or service. In 1970 we saw approximately 500 ads per day. With the average consumer seeing over 5,000 Google ads per day how do marketers break through all the noise today? In his book he shares a process to get answers to the following questions;
What do buyers want to buy?
When are they ready to buy?
Why did they not buy?
What I liked about this book is its’ “how to “approach. The author uses 4 primary surveys to capture current buyer process, criteria and it is done in such a way the customers fall in love with your product.
The key to insuring your team achieves their sales goals is a clear and current understanding of your buyers and markets and how they make buying decisions.

Companies who take the time to strategically  understand their markets and buyers and recognize shifts early achieve and surpass their sales goals.

Nothing compares to meeting with buyers and influencers in the markets you serve and asking them questions. If you struggle to break away from those “important” meetings at corporate you can conduct win loss analysis calls and now the book: Ask provides a step by step process to use surveys to capture what you need to know.

There is no excuse to lead by gut and intuition in today’s dynamic and shifting marketplace. Make understanding knowing your customers and markets a key action item in your strategic plan and your will consistently achieve and surpass your sales and profit goals.

Stop Making Your Salespeople “Assume The Position” …

the buyer pat down without a positioning statement

By Mark Allen Roberts

In my last few posts have been about how buyers become “Brand Damaged” and this preventable disease will quickly eat away at any chances your team thought they had of achieving their sales goals. It is very difficult to heal damaged brands. Another marketing disease that frequents particularly large companies occurs when sales has to : Assume the Position of your product or service when presenting buyers. If your salespeople do not clearly understand your product positioning they are left to be pat down by buyers . Sales then assumes what it must represent to make this uncomfortable experience end,and the result is very dangerous. It is dangerous because you fail to close sales you probability could have won  and your sales team is promising things you can not execute.

I can hear some of you now, “ok, you have discussed branding and positioning in the last two posts, enough already!” My answer is no, I have shared branding and how your brand can become a damaged brand in the minds of your buyers. In this post I will discuss how far too many companies force their salespeople to ; Assume the Position their product or service has in the minds of their buyers and this results in lost sales that could have been yours.

Let’s go over a couple quick definitions;

Brand– Unique design, sign, symbol, words, or a combination of these, employed in creating an image that identifies a product and differentiates it from its competitors. Over time, this image becomes associated with a level of credibility, quality, and satisfaction in the consumer’s mind (see positioning). Thus brands help harried consumers in crowded and complex marketplace, by standing for certain benefitsand value. Legal name for a brand is trademark and, when it identifies or represents a firm, it is called a brand name. See also corporate identity.

Read more: http://www.businessdictionary.com/definition/brand.html#ixzz26NttsbS1

Position, Positioning, Positioning Statement –  Written description of the objectives of a positioning strategy. It states (1) how the firm defines its business or how a brand distinguishes itself, (2) how the customers will benefit from its features, and (3) how these benefits or aspects will be communicated to the intended audience.A positioning statement is a subset of a value proposition that optimizes it for marketing communications purposes. It identifies the target audience, the product and its category, a specific benefit, and is differentiable from the nearest competitive alternative. It is an internal, non-emotional statement that becomes the messaging cornerstone of an integrated marketing campaign.

Read More : http://www.businessdictionary.com/definition/positioning.html

You can control your “positioning” by creating a unique selling proposition and using it in all your marketing communication. Over time, as people become aware of your products and services, you start building your brand in your prospects’ and customers’ minds. Positioning is something you can do now when you state the problems you solve and how you uniquely solve them. Branding happens over time. Branding refers to what your customers think or feel when they hear a specific word. Positioning refers to your position “relative to” or “in comparison to” your competitors. Positioning is sharing your distinctive competence with your market. Branding is your product’s identity established over consistently executing what you promised.

With that said…

Are your salespeople trained and aware of your product positioning? …are you sure?

When your salespeople meet with new prospects do they know your product’s distinctive competence?

Is your brand and position  true in the minds of your buyers?

Are some of your products; “positioning dated”?

Are your salespeople “assuming” they know what your product position statement is or sharing a dated position that worked five years ago?

Is it time to re-position your product(s) based on the market conditions and problems your buyers face today?

Salespeople are focused on closing new business and if you do not provide your product positioning that resonates with buyers, sales will assume and make their own tools to drive the sale to a close. The trouble is, from a buyer’s perspective, it feels very uncomfortable as they have to pat down salespeople to find products that may solve their problems. For a buyer it feels like the salesperson is playing feature and benefit BINGO. They keep tossing features and benefits expecting  the buyer to yell; “BINGO …I get it now, I know what problem you can solve for me.” The more this salesperson is left to find your product’s position the less credible they becomes in the mind of your buyer. The more salespeople you have on your team creating your positioning, trying to sell dated positioning, your market will lose trust in your company.

Don’t make your salespeople Assume the position when meeting with buyers.

Train your salespeople to seek unresolved market problems and understand your product’s position to solve those problems. The goal of positioning is when your target market associates a benefit with your company. When you fail to establish a strong foundation from a position that resonates with your buyers, you fail to create brands that create raving fans.

So hopefully you can see now that when salespeople are forced to Assume the Position of your product or service it creates an unstable foundation for a trust based relationship and is it any wonder buyers become brand damaged? A strong position in the mind of the buyer, reinforced over time connects to the buyers’ emotion and they begin to trust. It is at that point your positioning becomes a brand.

When salespeople are forced to assume the position of your product ;they make an ass out of you and your company.

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