ROI4Sales Webinar with Sales Coach
Transcript of the entire Webinar
John: Hi, everybody. Welcome to the Adapt or Fail webinar this afternoon. This is John Schumann. I’m from the Whetstone Group. Let’s cover just two things before we get into the program. I’d like to get a little bit about ROI4Sales and then a little bit about the Whetstone Group; and then in case you might be wondering what are these guys offering, we won’t disappoint you. We’ll tell you what we’re offering on this and then we’ll get into the program. So first, Michael, tell us a little bit about ROI4Sales.
Michael: Well, thanks, John. My name is Michael Nick. I’m the president and founder of ROI4Sales. We’re about a 14-year-old software company. What we do is we specialize in developing tools, design, development, and deployment of ROI, PCO, value estimation, and risk assessments for your sales enablement group to use throughout the sales process. As we get a little bit further into the presentation, I’ll tell you a little bit more about what we’re doing and what we’re offering. But until then, John, why don’t tell us about Whetstone?
John: We’ve been training salespeople for over 20 years and have delivered common sense selling in over 100 industries in 14 countries in three different languages. Jim and I have written three books including the bestseller “Common Sense Selling” and that’s our proprietary process. We work in a complex sale environment where long-term relationships are key. Our typical client is frustrated and trying to reduce the sales cycle, differentiate from competition, build value, reduce discounting, put on new business, and really also try to get the decision makers.
So what are we trying to offer this afternoon? Michael, want to go ahead?
Michael: Well, yeah. We’re going to put up a presentation for you today, and then out of that presentation there will be a workbook that we’ll send to you after the presentation or after the session today. You’ll have to email us and ask us for the document because it’s been weeks since the original presentation, but we still have a document for you on Adapt or Fail.
I think Jim is going to cover what has changed first, and then why don’t you come back to me and I’ll tell you a little bit about the format and how we’re going to do this? Jim, any thoughts on what has changed in the market today?
Jim: Yes, sure. Thank you very much, Michael. This is Jim Dunn. John and I are partners in Whetstone Group.
I think it’s important that we kind of give you an overview about how selling has changed. It has changed in three very important aspects, and these changes have occurred over time. They’ve been very subtle, no announcements were made, and consequently, most sales organizations have been very, very slow to adapt to these changes if they’ve adapted at all.
So let me talk about the three changes. First, we’re in the information age today, and the amount of information that’s available to buyers is immense due to the Internet. And because the buyer is so much better informed, this basically changes the role of the salesperson. I mean it wasn’t all that long ago where it was the salesperson’s job to educate buyers because they couldn’t get the information nearly as quickly as they can today. So the salesperson needed a ton of product knowledge. They needed to be good talkers. And it was all about the sales pitch and all about closing the deal. Now, you guys will recognize it as feature and benefit selling, and the focus was all about the seller and the seller’s products and services. I’m sure you’re quite familiar with it.
The second change – today’s deals are generally much bigger in terms of dollars, and that means more risk for the buyer if he or she makes a bad buying decision. With more dollars involved, sales cycles are longer, more people get involved in the buying decisions, and it’s much less transactional and more complex than it was just a few short years ago.
Finally, it’s hard to get appointments these days. People are more pressed for time. They’re busier. They’re inundated with information, emails, and meetings, all of that stuff. They just don’t have time to listen to long-winded sales pitches. In fact, the research says that the biggest turnoff for buyers these days is that, and this is not going to be a big surprise to you, salespeople talk too much.
So fundamentally, this changes the relationship between the buyer and the seller. Trust is much more important today than it was before. So the skills that were needed for a transactional sale, skills like product knowledge, making good presentations, overcoming objections, all the stuff that we’re used to, they’re far less effective today. In fact, they can be counterproductive.
[0:05:02]
Today the role of the salesperson in this increasingly complex selling environment is to be a problem solver, not a product pusher. Let me say that again — to be a problem solver and not a product pusher. So salespeople need to be good at building trust, they need to be good at eliminating pressure, and they need to be good at asking questions and being a good listener, in fact, almost the exact opposite of what we perceive as the stereotypical salesperson.
We need to be able to understand the buyer’s needs at a deeper level than we have before so that we can come up with some creative solutions and not just give the buyer what they asked for. The problem is, and we see this every day in our training, is that salespeople, their managers, their companies, they really never got the message. They’re still operating as if nothing has changed. That’s why you need to adapt to today’s realities or you’re not going to be successful.
So why don’t we get started with the program?
Michael: All right. You mentioned about time. I want to thank everybody also for taking the time to listen in with us today. You’re going to see a format where we cover five topics. The topics are prospecting, pre-call planning, qualification, presentation, and closing. And then under each topic, we’re going to come up — we have an issue that a sales professional has expressed to one of us in one way or another. So we will read the issue and then each of us will explain from our experiences and our customers and our prospects and our time that we spent with sales professionals how we think you need to adapt or in some cases potentially fail.
So we’re going to start with prospecting. We want you to also realize one other thing that none of us mentioned that this isn’t a sales pitch. This is about learning how to adapt. So we’re going to take the first one which is about cold calling. I hear this a lot, guys, and I’m sure you do as well, but “Cold calling really stinks. I wish there was a better way.”
John, why don’t you start us off? What have you heard and what do you think?
John: Well, first of all, the reason most salespeople don’t like cold calls is they don’t know how to make a pressure-free call. They get put off by the rejection. They get put off from dealing with gatekeepers and kind of fear of the unknown.
So first of all, you really have to learn how to make a proper cold call. There are several great trainers out there, and the trainers, the pros always work off books’ scripts, but you can never sound like you are reading it. Now, if you would like one of our scripts, email us and we will send you an example.
When salespeople know how to make the calls, know how to deal with gatekeepers and voicemail, and these are all skills, it takes the fear out of it. It’s all about putting a process in place. Jim?
Jim: Yeah, John, I agree. A couple of things I would add, and one is our attitude about something really impacts how we go about it. And if our attitude about cold calling is negative, chances are we’re going to find other things to do. Now, I’ll grant that most of us aren’t too crazy about cold calling, but in a lot of environments, it simply has to be done. So we just got to step up and do it. Now, obviously, if you have a good script, if you know what to say, and by the way, most salespeople don’t know what to say, then you’ll be more effective.
Finally, it’s important to understand that you can’t control anything besides picking up the phone and making a call. You can’t control whether you’re going to get through to somebody. You can’t control if they’ll give you an appointment. So you got to stop stressing out about things that you can’t control and focus like a laser beam on what you can control, which is picking up the phone and making the calls.
Then you got to figure out how many calls you need to make to get an appointment and how many appointments you need per week, and then make sure you make enough calls every day to get the number of appointments that you need. And when you’ve made your quota of calls, you’ve had a successful day prospecting, regardless of the outcomes.
I’ll add that there is no silver bullet about prospecting. Find several ways that work and focus on them. This is probably a good time to talk about drip marketing. Maybe some of you have heard about it. Research says it takes 7 to 15 touches before a prospect will agree to take your call. Research also shows that most salespeople quit after three attempts.
So find other ways of touching the prospect. Touch them at networking events, emails; if your company has made an announcement about something, send that to them, newsletters, invitations, whatever it might be. Send them something you think they might find interesting, mix it up a bit and start to create a relationship with them. It takes time but it pays dividends.
[0:10:15]
Michael, how about your take on this?
Michael: All right. Well, actually, I want to add a little bit to what you had said. I’m a big fan of exactly what you’re talking about. I want to go back real quick to the drip marketing concept. A lot of people don’t know what that means. That’s a concept that continuously hits your prospect after they have hit your website, and it’s an automated program.
I know several companies that do this. We at ROI4Sales, we use a company called LeadLife and you can find them at leadlife.com. Another one is Infusionsoft and Software Infusion. I don’t know how that happened but it did. And then probably the big guy in that area was HubSpot. They do a wonderful job in that whole drip marketing area.
But check that out. That’s a great advice. That’s really, really a good advice. It has done wonders for my organization.
The other thing I’m a huge, huge fan of is LinkedIn, and a lot of people think LinkedIn is just a way of collaborating and talking and finding people that you already know. LinkedIn has a feature that probably the best feature within LinkedIn is something called advanced search, and if you look in the upper right-hand corner on a LinkedIn front screen, the home screen, it says “advanced search.” What you can do is you can type into that space the person that you want to try to get to, that you want to meet, and what it will do is it will spin through the entire millions of names in the database of LinkedIn, and it will look for how many people that you know in your circle of friends that know that person or know somebody that knows that person. So what it does is it tells you how far away you are from actually knowing that person.
What that does is if you take advantage of that is you get an introduction to that person, and that turns your cold call into a warm call. So don’t make it a cold call. Look for help on how to get introduced or at least know somebody that knows somebody that knows that particular person
There are also a couple of other tools that I would suggest to help you understand people that you’re trying to contact, an organization called InsideView, and again, insideview.com, great resource for doing research. They charge for their service. Jigsaw, which used to be a great company; now it’s a good company because salesforce.com screwed them up.
One of my favorite products is absolutely free and it is awesome. It’s by a company called SalesQuest. It’s called CrushArmy. They also produce a report that’s for fee to I think it’s the top 1000 companies called the Crush Report. But CrushArmy is free and it’s a way of exchanging leads with people. It’s kind of an online lead trading portal, but it also tells you, if you type in a name of a company or a name of a person, it tells you the articles that are out there that are written on that. So again, turn that cold call into a warm call.
And you guys mentioned scripts, so get those scripts from Whetstone and integrate your information that you’ve done your research on because that’s a great starting point. And as you said, scripts, without them, you’re just talking in the dark. It’s a waste of time.
The last thing, I have one other comment on cold calling, is if you can’t get to them, try to get them to come to you. The way you do that is through things like what we’re doing today – content-driven webinars, good social media skills, speaking events. Go join the local organizations in your area like the Chamber of Commerce and the Moose or whatever they are. Find organizations where you can get up and speak and talk about your products and go out and meet with people in a social environment. That will help you a lot, and I’m telling you, it takes a lot of the pain out of that cold calling effort.
So in summary, here’s how you need to adapt. You need to sign up and use the advanced search future function in LinkedIn. That’s a free service. You don’t have to pay for that.
The second thing is implement drip marketing. Again, we gave you a couple of names that you can look at. Don’t you guys use a program? Who do you use?
John: We use Infusionsoft.
Michael: Infusionsoft, yeah, another great organization. These are really good products.
Finally, good scripts, and Whetstone is offering you those scripts, so hey, take advantage of that. That’s a nice deal.
All right, we’re going to move on to pre-call planning. The thing I hear a lot about is “What am I supposed to do to prepare for a sales call?” I hear this so often it’s unbelievable. Again, I kind of go back to what I said a moment ago about using companies like CrushArmy, InsideView, Dun & Bradstreet, or companies like those organizations.
But here is what I would say. Get yourself a pen a paper out. I hope everybody has one in front of them. Start with the prospect’s website. Start with the About Us so you learn a little bit about the organization before you make that talk.
Secondly, I like to go to the news and articles. I always look up the news articles so that you can see if the person you’re talking to is in the news.
[0:15:00]
A lot of times I’ve even done YouTube searches on people, and I found one time, strangely enough, I was meeting with somebody that they had a YouTube video of their house that was on fire a few years earlier. So it was a good icebreaker. We had a conversation about that.
Next is if they’re a public company, go to their annual report. Go in and look at the president’s letter on the first page. That is probably the most important part of an annual report because they have to tell you the truth. They tell you where they’ve been and where they’re going. This is for the shareholders. And because of Sarbanes-Oxley, those front page letters will become very, very valuable to salespeople.
Next, of course, LinkedIn is a big advantage, I believe, and you could turn that cold call into a warm call by getting an introduction; and then the research tools I mentioned like crusharmy.com, insideview.com, Dun & Bradstreet, those kinds of organizations.
Another little known fact is you can use the public library to gather information. We had a prospect that sold solar panels and they sat on these industrial type roofs. They went to the library and got the librarian to find all of the buildings in the United States that had a certain kind of a roof. So they had a whole target list of prospects to call on.
The library is a public office or a public facility. It’s free and you can get their help. They’ll help you. So that’s like having free resources for you.
Finally, complete and review what I would call a pre-call planning worksheet. The data you need to collect is on this sheet. So who are they? What’s their function? What’s the organizational structure? Miller Heiman had a nice document about 25 years ago called a blue sheet and it was the same kind of a concept. Kaz is another one that had that as well.
So prefill this document in and use it so that when you make that first initial meeting and that first initial call that you’re prepared. John, what do you think?
John: It’s so important not to wing it. When we wing it, the prospect will get in control of the call by asking us about our company or how we are different. They manipulate us into making a premature presentation. This is happening more and more today as our prospect sort out their options. In any performance, it’s the prep and the practice makes the performance. Our performance in sales is when we are in front of the prospect. So know how you are going open the call. Avoid being seduced into a presentation. Learn how to get the prospect talking about their pain, their problems and their goals.
Remember, great selling is about asking questions. Questions are the most persuasive form of human communication. They facilitate a discovery and make the prospect think. So be prepared with your questions. If you would like one of our pre-call planning sheets, again, email us; contact us; we’d be happy to provide it for you. One of the things I think that we do differently is we’ll teach you exactly again how to open the call so that you can take some control and manage it but without being pushy.
Jim?
Jim: Thanks, John. Yeah, I want to talk about first impressions. I like to treat an initial call with a new prospect as if it was opening night on Broadway, a brand-new Broadway play opening up. If we think about it, who is in the audience? Well, you got obviously the people that bought the tickets.
The audience is also full of critics, and if the critics don’t like the performance you read all about it in the paper the following morning. Bad reviews means the show closes early, the actors lose their jobs, and the producers lose their investment. Well, your audience is your prospect and he or she is evaluating your performance to determine just how much time to give you and whether or not to even invite you back for another meeting. So preparation is a really big deal. I find that when you’ve done a good job preparing, you’ll be far more confident when you get to that office, and that’s going to come across to your prospect.
One final thing, go on their website — I think Michael mentioned this — and find something that you might bring up at the beginning of the meeting. I like to tell the folks that we train to say something like this: “As I was preparing for this call today, I noticed on your website…” and then you’ll mention something that you saw and get them talking about it. It’s a good ice breaker; and if you need one, it certainly sends the message that you’ve done your homework and that’s absolutely critical.
Michael?
Michael: That is great advice. I love that one.
So here’s what you need to do to adapt. First, pre-call planning research tools, a pre-call planning worksheet which again Whetstone has so generously offered to send you. Just send them an email. We’re going to give you the address at the end of the presentation for what the email address is so you can get all these things that you’ve all been promised.
[0:20:00]
An initial discovery document sent in advance. I didn’t mention this, but this is one of those things I truly believe in is oftentimes when you meet with a prospect and you ask your initial discovery question, they give you the “I don’t know” or the blank stare like I need to go get that information. If you create the questions in advance and send them in advance like monetized type questions, how many salespeople, what’s their quota, things like that, if you send those questions in advance, they can prepare as well. So you’re going to help them prepare for the meeting as well.
Then finally, the bigger the opportunity, the more preparation you need to do, the more research, the more diligence, the more information you’re going to need to collect. Again, I love this one. As I was preparing for this call, I noticed your website use this. Make sure you go and read those news articles and talk to your prospect about that. That’s a great icebreaker and opener.
Funny, I was in the bookstore the other day doing some research, and I looked over and I saw a book title, “What the Bleep Just Happened?” And I thought of this so I thought, “Holy cow! And then opened it and realized it was a political book, but I was thinking of a sales situation of what just happened? I was on a sales call and the prospect started pumping me for information. What a great…” And then I opened it and realized it was a political book.
But I was thinking of a sales situation of “What just happened? I was on a sales call and the prospect started pumping me for information. I never got any of my discovery questions answered.” John, do you ever hear this one?
John: Oh, man. You know, people today are being bombarded with pitches and they are getting more and more wary about being “sold.” So the prospect doesn’t trust us and they get into control by asking us questions. They are qualifying us. It’s all backwards. They are asking, “Is there value spending time with this guy? Is there something that they can educate me about?” They trap us into the old “show up and throw up.” We have to avoid this.
One way, if you take only one thing from this webinar, when you get trapped into talking about your products and your services, keep your answers very short and ask another question. Jim?
Jim: Yeah. I think one of the most compelling things that we’ve learned over the years and have taught to people that we train is that the prospect has a process and this process is pretty darn powerful. What prospects are doing is they’re looking for information, so they hold out the carrot. That’s a metaphor for enticing somebody to start talking.
So they say things to us like, “We’ve been thinking about making a change. We’re not totally happy with our current supplier. How can you help us?” So the salesperson interprets that as well, we’ve got a live one here. I probably don’t even need to qualify this. We get happy ears because we’re easily seduced into providing a lot of information because we’re eager to do this because we think we’re building a good relationship and we think we’re showing off our expertise.
But once they get that information — and by the way, they are very good at pumping us for information. I’m sure you can all relate to that. Once they get the information, and usually it’s in the form of a proposal or some sort of a presentation, once they get that, they rarely say, “Yes, I’ll do business with you” or “No, this isn’t going to work.” It’s that they give us some sort of a stall. They’ll say, “I need to talk to my partner.” “Oh, I need to evaluate this a little bit further.” “I need to think it over.” I know everybody has heard that one a million times.
That forces us, the salesperson, into the old follow-up mode, and we wind up chasing them and eventually even pestering them. Then they disappear because they don’t need us anymore to do anymore free consulting for them. So clearly, and this is really important, folks, clearly the prospect is controlling the sales process. So this dynamic is a big part of why salespeople are not very good at qualifying the prospect.
Michael, what do you want to add to that?
Michael: Well, I mentioned it on the previous issue this initial discovery document. It’s that basic questionnaire that I believe you should send in advance. It’s the questions that you are going to review with the prospect when you meet. This gives them an opportunity to prepare before you arrive, and then when you arrive, you make sure that they got it, you explain the fact that you’re going to review it with them and go over the questions and so forth.
Also, one of the things I didn’t mention, and I wanted to make sure you do, is I see a lot of salespeople make the mistake of not establishing a timeframe when they get together. When I show up, I like to say, “We have an hour. Is that true?” And they would say yes or no or whatever it is that they have or a hard stop.
And I’d say, “Look, I need to make it really clear that the questions that I sent you in advance or the questions I need to get through,” so that we truly have a partnership or a consultative approach that says, “Hey, I want to answer your questions and I want to be in the interview and get you the information you need, but I also want to make sure that I walk away with the information I need to see if we even have an opportunity here or if we can help you or if we can’t help you.”
[0:25:20]
I would assume that you guys have qualified the prospect by now, so at this point, John, what do you think?
John: Well, we have a very similar tool that we teach. We call it a meeting agreement. For each meeting we set up we want to clarify with the prospect the time for the meeting; we want to understand what the prospect wants to get out of the meeting, their agenda; we want to define our purpose for the meeting, which is to ask questions and get a good understanding of their issues; and then we want to manage the meeting to an outcome, if we have a fit that we’ll move forward, or if we don’t a fit, we won’t waste a whole lot more time.
We use the meeting agreement. It’s also in our pre-call planning worksheet. Again, it’s an important tool that the salesperson practices before it goes into the meeting. Michael?
Michael: Yeah, that is great advice. Absolutely!
So to adapt, we came up with two primary things, and I know we talked about a lot of stuff. Again, in the document we send you after the webcast, it covers all of our notes. But the two big things right now is to use some type of an internal or initial discovery document so that you can send it in advance and have your prospect prepare for that initial meeting; and then secondly, these meeting agreements, that gives you the control. It ensures that you get your information and they get theirs, but it also makes sure that you get yours, the most important at this point.
All right, guys, we’re going to move on to qualifications, so qualifying that prospect. I hear this one, “I can’t get to the real decision maker.” Now, my ROI4Sales, me, Michael Nick, my experience is in communicating with decision makers. I wrote a book called “The Key to the C Suite.”
So when you offer a product called a value hypothesis, this is a product that says — it’s like a business case. This is my suggestion is that you create this value hypothesis and that’s like a business case that you send in advance to the C suite. What it is it’s an economic impact analysis based on a similar size organization that you’re trying to get into. It’s a document that has typical issues, pains and goals, cost of status quo, cost of decision delay, and impact on your financial statements, impact on your income statement or balance sheet. It breaks down cash flow analysis over a three to five-year period of time.
If you create this type of a document and you add to it a letter that says, “I’ve created this value hypothesis for you based on a similar size organization, based on organizations like yours have that similar issues, pains, and goals.” So you’re educating and you’re informing the CFO or the C suite individual that you’re trying to get into. You add just one brochure, just an overview brochure of your products. You add a typed letter that says, “Here are the issues, pains and goals that we are covering.” You also include in there metrics from similar size organizations in the same market.
So for example, there’s an organization called Sageworks and it’s sageworksinc.com I believe. It has this information for free on their website. But if you were selling to say financial services, they give you 13 metrics on the financial services industry, like what should net profits be, what are DSOs, what are gross profits, ROE, ROA, those metrics.
Then you want to compare your value to the metrics that you impact. Add that into your letter and then add a handwritten note on top of that and say, “Look, I’m going to give you a call tomorrow at 2:00 or Friday at 2:00 to discuss this particular document.” You put that on a FedEx package or a UPS overnight or 2Day Air or whatever it might be. They’re going to open it. You’re going to get into that C suite.
So going back to “I can’t get to the real decision makers,” I know that’s an issue, bring them to you. That’s my advice. John, how about you?
John: Michael, when we train a client, Jim and I also act as a coach on call, and we hope the sales team strategize and give them the confidence to try new things. Jim and I love doing this. There’s nothing more satisfying than seeing a salesperson be successful.
In our coaching, we find that probably 60% of the time, the salespeople are calling too low. It’s where they’re comfortable. And Michael, as you indicated, we need to learn the language of the C suite. C level people want to talk about their problems and their financial issues. They don’t want to talk about features and benefits.
Now, getting back to calling on middle managers, there was an article not too long ago on the Wall Street Journal about middle managers. It indicated that middle managers in America have stopped making decisions. They were afraid of the visibility of a bad decision.
[0:30:00]
It indicated further that they were putting taskforces together to spread the risk of the decision, and if one said no on the taskforce, the decision would stall. In today’s environment, we need more and more to get to the decision maker and get to the C suite. If you’re thinking, “I can’t get the decision makers,” we need to change that thinking because this becomes a self-limiting belief or a self-fulfilling prophecy. Jim?
Jim: Get your pencils out or pens and write this down. It’s called the California Rule. Get high and stay high. I was going to say we ought to have a little canned laughter there, but…
Michael: Oh, I love that. I’m still on show up or throw out.
Jim: Is that right?
John: We don’t do this in the south by the way.
Michael: Oh, yeah, good point.
Jim: But the deal is all too often salespeople don’t start high enough and they don’t work very hard to get high in the organization. I guess that’s because it’s really not easy. So we take the path of least resistance and after a while that becomes kind of a comfort zone for us, as John said.
But you have to understand the problems that you create for yourself when you don’t get to the decision maker. The first is you won’t understand what his or her issues are, so you may not be addressing the right issues when you commit and make a presentation. The second thing is that you are depending on somebody else to sell your idea for you, and the Vegas odds on that one aren’t very good.
So what you need to do is tell your prospect that in order for you to come up with a really good solution that addresses everyone’s challenges, you’re going to need to meet with all the stakeholders. Tell them that if you don’t do that, your proposal is probably going to miss the mark and that’s not going to be in their best interests. And if you can get them to agree with that, you’re making some progress.
But if you come across like a greedy salesperson, like a product pusher, you’re not going to get access to the C suite. So what you got to do is start acting like a solution provider, not a product pusher but a solution provider who has their best interests in mind, and then you’ll find you will be getting higher in the organization.
Finally, and this is important, folks, don’t be afraid to pull the plug if you keep getting blocked. Some prospects simply are not worth the effort.
So Michael, I turn it back to you for a summary on this one.
Michael: It reminded me of one comment. When you’re talking to people, make sure you’re not talking to people that can only say no. I mean you want people that can say yes. If they’re no, then you’re never going to get anywhere. So you kind of remind me of that thing.
Here’s what you need to do to adapt. First, bring them to you through social media content, other things like the technique for the value hypothesis that I mentioned earlier as well.
Don’t act like a salesperson. Actually like a consultant. You’re there to help them.
Use referral introductions and then call high and stay high as the California Rule. Love that.
All right, here’s a good one. “I keep coming in second? Why is that and what can I do about it?”
I believe that you need to use tools like an economic impact tool. Think like the buyer. Why would I buy this? Why now and then why for me? You want to create questions that expose pain. Pain is why people buy things. So you want to expose the pain and drive your value.
Use a business case, an economic impact study to help your prospect understand your value prop and how the cost of status quo just isn’t free and that your value proposition is the best alternative. So in other words, if you want to keep coming in second, you’re skipping important steps in the sales process. So what I’m trying to say is that if you’re using these tools to capture information, help people realize that status quo isn’t free and that you can use these tools to help expose pain. If you’re skipping those steps, then you’re probably not going to get the deal. If you go from hello to here’s our proposal, or as you guys said, show up and throw up, you’re going to be on the cold. There’s no way that you’re going to be able to do this.
Finally, when you start to build that trust and build that relationship with your prospect and you’re using these economic impact tools and studies to help people realize their pain and the issues that they’re facing, you want to be able to identify the pain, capture the cost, and extrapolate that cost over time. Because when they look at pain, they only look at pain as it is today. You want to make sure they realize that by not doing anything over time, the pain is going to continue. It’s not going to just go way. It’s going to continue, and in many cases it’s going to get more and more expensive over time. So helping people identify and agree to those issues, helping people capture and calculate that cost, extrapolate that cost over a period of time, and then helping them with the math as to what it takes to understand that doing nothing is not free, doing nothing is — there’s a cost to it.
[0:35:20]
John, what do you think?
John: This coming in second, to me this is really the worst situation. We put in time, energy and resources that we put it our pipeline and we lose. If you are not a good fit, you’ll lose early. Work at Harvard has indicated that in the services business, you will win the business in the investigation phase.
I believe this is also true for an awful lot of other businesses, not only the service business. The prospect wants to work with the company that has the best understanding of their problem. Again, it is all about asking good questions, really qualifying the prospect. Most salespeople don’t want to disqualify anyone. They want to sell everybody, but that is wrong. Not everyone is a good prospect.
Jim?
Jim: Yeah, John. I want to mention and give some kudos to Neil Rackham, the fellow who wrote the book “SPIN Selling” a few years ago, and I’m sure a lot of you have read it. But it’s based on a ton of research that he was asked to do. His client wanted to know who are the best closers, so he went out and interviewed 10,000 salespeople, whatever it was. He found out that to everyone’s surprise, the best investigators, the best qualifiers close the most business. It’s absolutely true. It’s also a great differentiator. If you ask better questions than the other guy does, that resonates with the prospect in a very positive way. John said if you’re going to lose, you might as well do it early.
I want to address another issue here. Buyers have a nasty habit of playing one supplier off against another. They may want a proposal from you just to keep their current vendor honest. So one of the first things that you’ve got to do is get them to convince you. Yeah, you heard it right. I said get them to convince you that there’s some serious dissatisfaction with their current supplier. Ask them why they wouldn’t simply give the business to their current vendor. I mean if they can’t give you a good reason why they’d be willing to change, you’ve got to wonder whether or not they’re worth pursuing.
It’s not an easy question to ask, but I’ll tell you what, it’s not manipulative in any way, and if there’s a real problem with the incumbent, it’s great to get the prospect to tell you about their problem. But if there’s no pain, there won’t be any change.
One more thing, oftentimes prospects need to get three bids and they just need to fill in a couple of columns on a spreadsheet. Oftentimes they have the incumbent or a very strong favorite, but they need to satisfy some sort of internal rule about getting competitive bids. So again it’s a qualifying issue. The better you qualify, the fewer times you’ll be coming in second. Once again, some prospects simply aren’t worth the effort.
Michael?
Michael: Great advice, guys. Great advice. Let’s go back to what you need to adapt. Don’t skip steps in the sales process. Make sure that you are in sync with your prospect that you’re on the discovery phase when they’re in discovery and you’re on proposal when they’re in proposal.
Ask yourself, “Did I build trust? Do they believe me? Do they trust me? Do they look at me as a trusted advisor?”
Have you eliminated the competition? Finally, were you just column fodder? Ask yourself, “Am I?”
Moving on. “I have so many deals that I lose to status quo. I don’t know what to do about it.”
Well, I kind of touched on this on the previous slide and I didn’t want to get too detailed because I wanted to get detailed here. We are at ROI4Sales, we teach a simple calculation called “cost of decision delay.” I hope you have your pencil ready again.
The first thing you need to do is to capture and calculate the current cost of status quo. So go through and identify issues, pains and goals with your prospect, isolate an issue and the capture the cost of that issue. Extrapolate that issue over three years.
Now, we like to use accelerators like the rate of inflation. So labor is probably going to increase at the rate of inflation. So if they’re caught, if the issue they have is we’re spending too much time doing X or it takes too long do Y, then you want to capture the cost of doing X or Y and extrapolate it over time, but use an accelerator because you’re going to show that the cost doesn’t remain the same. The cost is actually increased over time.
[0:40:05]
Then you want to divide that number, multiply it times three, divide it by three and then divide it by 220 days. I realized that I just said to calculate it over three years. Because you’re using an accelerator when you divide it by three, it averages it over those three years. So it isn’t the same number three times. It’s actually a little bit higher.
Then divide it by 220 days in a year so you know. What this is going to do is it will tell you their daily cost of status quo over a three-year period. Daily costs are far more painful than annual costs because you look at it on a daily basis. And when you start to add up all these issues together, the daily cost of all the issues becomes usually a pretty significant number.
Next, you need to estimate your value over that same three-year period. In other words, identify the pain, capture the cost, prove you can deliver value, and then estimate what that value is, okay? So you want to make sure that you use the prospect’s input and make sure that they agree with you on the three-year values. Then you do the same math, divide it by three, and divide it by 220.
Finally, take the investment that they have to make over that same three-year period and do the same math. Divide it by three, divide it by 220. So what you have is you have a daily cost of status quo, a daily investment which is what you’re going to charge them; you add those two numbers together, and that becomes one number. That’s your cost of status quo with the value that you could deliver. Then you subtract the value that you can deliver. Now, what that does is that gives you a difference called the daily cost of status quo.
So very quickly, one more time, I’ve got the cost that I’ve calculated over three years on the issue. I have the investment that they’re paying. That’s one number. Add them together.
Then you subtract the value that you can deliver. That’s going to give you the daily cost. Every day they don’t make a decision that’s a cost of decision delay. So you multiply it times 30, 60, 90 days, and now what you have is you have a prospect and can see here’s my daily cost to doing nothing, my daily investment, and the daily cost of status quo and decision delay.
Jim?
Jim: Status quo, yeah, that’s an interesting one. There’s a very good research organization called Chief Sales Officer Insights, CSO Insights. They do a lot of very good research about selling. They came up a couple of years ago with some numbers that I found very fascinating, and it was about forecasting and how accurate or inaccurate the typical sales forecasts were.
We have a couple of numbers here. You might want to write these down. 93% was the number that they said of forecasts that were inaccurate. When I say inaccurate, either the dollars forecasted or the date that the revenue could be booked were off.
What that tells us, I mean if you think about it, is that salespeople really don’t have much of a clue. They’re only right 7% of the time. It also tells that they don’t qualify well enough to forecast accuracy. So we’re getting back to the qualifying thing.
The interesting part about this though is that the research showed that 54% of the deals, just over half of the deals that salespeople said they were going to get, and they said to their boss, “Go ahead. Book it. It’s coming in.” 54% of the time those deals never came in.
Now, let’s take that 54% and break it down into two numbers — 30 and 24. The 30 means that 30% of the time the client stayed with their current supplier in spite of the fact that the salesperson was convinced that they were going to change, and 24% of the time the prospect did nothing. Status quo was maintained. There wasn’t enough pain to do anything.
No wonder salespeople’s closing averages are in the 20%, maybe 25% range. In other words, they’re creating five proposals to create one piece of business. It’s all about qualifying better and chasing only the best prospects and discarding the worst ones before you have too much invested in them.
John?
John: Yeah. Losing to the status quo, this is a real worst-case scenario. Let’s look exactly at what happens here. We have several meetings with a prospect. They generally keep asking us for more information about our offering, or we offer and they take. They may want to see a demo or do some form of a trial, usually all free. They ask for pricing. They want to see a lot of detail.
[0:45:00]
We have “happy ears” and are egger to comply. They will take all of our white papers. They will allow us sometimes to do some form of a study. We keep telling our manager every month that they’re interested and should be in the forecast. They keep asking for more information. They never say “no” and then finally, they do nothing.
Now, in this case, the salesperson had absolutely no clue what was going on in the prospect’s company. At least when we lose to a competitor, we know the prospect was “qualified” in that they had a problem, they wanted to solve the problem, they spend the money and make a decision. If doing nothing is an option, most prospects will take that option. Our number one rule in selling is, and this is a little counterintuitive, my prospect must convince me that he has a problem and that the problem is serious enough and needs to be fixed. If my prospect cannot convince me they are serious, they are probably not a very good prospect.
Michael?
Michael: All right, awesome. Let’s go to the how you need to adapt.
Better qualify in or out early in the process. It’s always less expensive to get out of it sooner. That’s for darn sure.
Use cost of decision delay calculations. Again, you can contact me if you wanted those in writing and I can put them down for you.
Roughly 25% of deals go to no decision. Ask the hard questions and get rid of those happy ears.
Finally, prove to me you’re a real prospect. That kind of goes back to when you ask about the incumbent, whether what it is that you’re unhappy about with the incumbent.
We’re going to move on to presentation. “Look, I showed the prospect how they could save $100,000 the first year. Why didn’t they buy?” Jim, hear this one?
Jim: Absolutely, yeah. It’s a common situation. But when I hear that, what it sounds like to me is that the salesperson said, “Hey, I can save you X number of dollars if you give us the business.”
I’ve had more than a few salespeople come into my office over the years and make all these promises about the great benefits I’d get from switching this service or that service over to them. They’ll save you a bunch on the phone bill. Why are you spending so much for this or that? Well, $100,000 sounds like a lot of money, but does the prospect believe you or is it just another BS statement that is made by a salesperson? That’s the real question. You got to get the prospect to tell you what they expect. Ask them what would happen if you could deliver the results they’re looking for. Their answers are really going to tell you volumes.
John, what do you want to add to that?
John: Well, sometimes salespeople go into a situation where they want to go in and do some form of a “study” to show a return or an outcome. It is usually a canned study that was developed by the marketing department. The prospect will agree to the study. Think about this. Why would they say “no” because they just might learn something?
But the prospect is not stupid. They don’t look at these studies as objective. They look at them as being designed to either sell or justify the product. So remember, if we say it, the prospect can doubt it and probably will. If the prospect says it, it’s true.
So a couple of important points. When we do this kind of a return calculation, and this is the kind of calculation that Michael was talking about, make sure we are using the prospects numbers. The key to this is asking questions and letting the prospect come to the conclusion that they would save money or get some other return. When they come to their conclusion, they own it. They won’t argue with their own data. With any savings we also have to find out if the savings is significant to make a change. $100,000 savings may not be enough to justify the energy, resources and risks associated with the change. Again, we need the prospect to convince us that $100,000 savings would be enough to justify making the decision to switch. If they can’t convince us, then we probably don’t have a very good prospect.
Michael?
Michael: Yeah, I totally agree with you guys. Obviously the prospect didn’t hit their threshold for pain. In other words, it really didn’t matter to them that they say they could save $100,000. We had a client once where they were telling how they saved Verizon $100,000 and it was ten headcount, and they went to AT&T and said, “Hey, look, we can save $100,000.” $100,000 didn’t mean anything to them.
So you need to make sure early in the sales process that you understand their tipping point or their threshold their pain. Have that conversation early enough so that you can qualify them in or out. This is a seriously key qualifying point.
[0:50:05]
So your value has to exceed the cost, yes. Do you have to resolve the problem? Absolutely. But also, you have to offer enough value to move them from a no decision, and that’s where that tipping point comes in is is that enough? John, you nailed it. You’ve nailed it right on the head.
So determine that tipping point early. Get the prospect to give you the number he may or may not believe in. As John said, they can’t argue with their own numbers so you want them to give you their numbers.
And then we didn’t mention this, but it’s an important factor, is make sure you’re talking to the right stakeholder. Again, make sure you’re talking to the person that can say yes, not just no.
The last topic is closing. “Every single deal is delayed; I don’t know what to do.” Jim, do you?
Jim: Do I know what to do? I can tell you this.
Michael: That’s how we get set up.
Jim: We hear this every day. Sales cycles are longer and longer and longer. But let me go to a big picture to start the discussion.
The first thing is get in front of the right people at the beginning. If you’re in front of somebody who can’t make a decision, that only slow things down.
Secondly, focus on solving problems rather than pushing products. People, just by their very nature, will take quicker action to solve a problem than to just go buy something. I mean pain is essentially the change agent here.
The third thing is uncover land mines and roadblocks and stuff early. Eliminate any problems that may compromise your ability to work together early so that things don’t get sidetracked at the 11th hour. So when you see something come up, for example, you’re not in front of the decision maker at the beginning, tell your prospect that that needs to happen.
The next one is get out of dead deals early. This alone is going to shorten your average sales cycle and gives you more time to spend on real deals. As the saying goes, if you try to chase every rabbit, you’re not going to catch any of them.
Last but not the least is follow a process. Anytime you follow a process, it streamlines things. It eliminates waste. I think John will probably talk about that a little bit more. John?
John: I mentioned that article in the Wall Street Journal earlier about how middle management in America have stopped making decisions. They just want to avoid the exposure of a bad decision. The article talked about how the decision has been moved to task forces or teams to limit that exposure and get group “buy in”.
The article pointed out that the danger in this is was that if one person in the task force does not agree to the initiative, it stalls. Things are delayed. Time kills deals as priorities are changing. So it’s so important today to get to the corner office, more important than any other time in selling. This is where the decisions are being made today.
In addition, it’s always important to get back to the basics of good selling. We should always be asking the question, “Whether you pick us or a competitor, when is the latest you want to make this decision and why is that date important?” If they can’t convince you of a date, it’s hard to forecast the sale; and if they don’t have a date or it’s an option to do nothing, things will stall.
Michael?
Michael: Yeah, I’m a big fan of our calculation for cost of decision delay and cost of status quo. I have you those calculations earlier. This process is the key to capturing the information. The math that you do in this process is the vehicle to make your point. So people move when they reach a tipping point. The key is to help them realize what that cost is so that you can compare it to their tipping point by calculating cost of decision delay and cost of status quo. So remember, use the numbers their numbers, the prospect’s numbers, to get buy in, real buy in.
So to adapt, ask the prospect if it’s an option to do nothing or how long he can continue to suffer the financial consequences that goes right to cost of status quo. Again, you can’t get this information or validate this information unless you’re talking to the right stakeholder. You need to be in the C suite. Middle management, those decisions have moved from the shop floor to the board room and it’s really important that you’re at the right level having those types of conversation.
[0:55:00]
Finally, use status quo and cost of decision delay calculations in your presentations and in your discussions with the C suite.
Our final closing comment was “I don’t need to follow a sales methodology. I usually make quota.” Jim, why don’t you start us off?
Jim: Yeah, I will quote Neil Rackham again, the guy who wrote “SPIN Selling” and the principle of the Huthwaite Research Organization. A couple of years ago, Neil wrote, “A good sales process can turn ordinary mortals into rock stars.”
Winging it is not a strategy, folks; neither is hope. You wouldn’t build a house or try to assemble something without a process. Selling has changed. It used to be the process was just show up and throw up, but it’s so much more complex today. There’s way more moving parts. Without a good process a lot of things are going to fall through the cracks and you may wind up on the losing end.
Plus selling today is more competitive than ever. Most salespeople don’t have a process. Believe me, we ask at the beginning of every training session if they have a sales process and we get a lot of blank stares. All things being equal, if you have a process and your competition doesn’t, don’t you think you’d win more business? Or put the shoe on the other foot. If they have a process and you don’t, you’re going to be at a distinct disadvantage. John?
John: Michael Webb wrote a really good book called “Sales and Marketing the Six Sigma Way.” It’s a really good book and it helps people look at sales using continuous improvement tools like Six Sigma. In continuous improvement, we are always trying to eliminate waste and reduce variability. This drives efficiency.
Michael Webb makes some really great points about how we go about making a product. We start with a list of specified raw materials and then we have work in process. These are the sequential steps in the manufacturing process, and the output is a product. With each step we try and reduce waste or variability. If we have a defective product, the engineers look at the raw materials first and then look at each step in the manufacturing process. They identify where changes should be made, change the process and everything become more efficient.
In the sales analogy, the raw materials are our leads in the lead generation process. Once we begin to interact with the prospect, we have Sales in Process. These are the discrete steps or meetings that have to occur to develop the output, which is a customer. There could be three or more of these steps depending on the complexity of the sale.
If we’re not getting the types of customers that we want; with that I mean in size or margins or long-term potential; we need to look at the leads that we are working with. And as we look at the steps, we need to reduce variability and eliminate wasted time or efforts. Small changes improve efficiency, reduce the variability in forecasting and eliminate wasted efforts in proposals and demos that go nowhere.
Michael?
Michael: Well, a sales process alone just isn’t enough. You need to supplement that process with things like sales tools, training, tools that include things like the pre-call planning worksheets and scripts like you guys are offering, discovery documents, a business case, a value hypothesis for example. You also need to give access to your sales force on research tools, like I mentioned Sageworks earlier or InsideView, CrushArmy, one of my favorites, Jigsaw.
And then finally I think economic impact tools that can help a prospect realize there’s a cost of status quo, there’s a cost of decision delay, and that you can truly impact their financial statements with your value. I believe the tools will enhance and improve the results of the formal sales methodology. So again, I don’t think the process is enough. I think we need to supplement that with tools and training and access to additional information.
So look, to adapt, you do, you absolutely do need a sales process. CSO Insights has said and their research indicates that statistically 63% more people achieve quota when using a formal sales methodology.
Also a post-sale autopsy. Now, we didn’t mention this, but this is a good exercise to go through on any deal so that you understand what you did right and what you did wrong. The nice part about this is that you can replicate success by understanding what was successful to begin with.
[1:00:00]
Finally, I believe that you need to supplement your process with tools and training.
So here’s a recap. We’re going to send you a reference guide, the Adapt or Fail. You have to request it from us. You’ll send one of us an email and we’ll send out that document to you.
Also, we’ve added you to our newsletters. So when you come in and ask for information, if you don’t want them, just hit the unsubscribe button or send us an email and you’re out.
And then we’ll take some questions. If you want to go ahead and send those questions to us, we’ll all be happy to respond.
I believe we have contact information for you. You can find me on our blog, roi4sales.com/blogs. I’m at Twitter @roi4sales at Twitter and also mjnspw is my personal Twitter account. The risk assessment that we’re giving away for free, that’s the URL for it. Again, it’s right on the information we’re sending you in the Adapt or Fail reference.
You can get Jim and John at whetstonegroup.com and they’re 100% money back guarantee on the online training program at salescoach.com.
Guys, do you have any other comments?
John: That’s it, Michael. Thank you very much.
Michael: Thank you, everybody. I appreciate it.
[1:01:20] End of Audio
