January, 2013

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Personal Sales Cycle

Sales Cycle & Buy Cycle   |  Buy Cycle  |   Sales Cycle    |    Personal Sales Cycle

The sales person has to understand the Buy Cycle and act accordingly as explained in the Sales Cycle discussion.  A successful sales person is one that not only understands product knowledge, domain knowledge, and sales skills, but also understands that there is a specific cycle that must be followed.  The successful sales person is also thinking of a more Personal Sales Cycle – one more dependent on personality and style.

personal_sales_cycle

sucess

Personal Cycle

Success!

Buyers prefer to deal with people that they like and trust.  It is not uncommon for successful sales people become friends with their customers.  Those customers not only become good references, they also evangelize the products at meetings, conferences, and other forums where other potential customers attend.  What better way to enable potential customers to become “Aware” of your company’s solution?It has become clear that the Internet is making an impact on the buying process.  Buyers now have more resources available to them.  This easy access to information enables them to conduct research on their own in a more efficient manner.  As a result, buyers are frequently further along in their Buying Cycles before bringing in sales people.  The change impacts the amount of time required for some steps of the Buying Cycle and can therefore reduce the amount of early-on involvement from sales people.  However, the actual steps a buyer goes through remain the same.  Therefore, it is now more important than ever for companies to have web sites that meet prospective customers where ever they are in the buying process.  Although buyers are now more informed, the sales person’s job remains one of helping them visualize your product as being the best solution for their need/pain.  Companies whose sales and marketing people have the ability to match their Sales Cycle to their prospects’ Buying Cycles with a predictable, repeatable process will be successful in the marketplace.

Buy Cycle

Sales Cycle & Buy Cycle   |   Buy Cycle  |   Sales Cycle    |    Personal Sales Cycle

The Buy Cycle represents the steps buyers must go through to acquire an item.  One of the ways a successful sales person becomes effective is by understanding their prospect’s Buying Cycle.  With this understanding, he/she will attempt to influence the Buy Cycle at as many steps along the way as possible.  The length of time for each step may vary from company to company and will depend on several factors including:

  • Product complexity,
  • Product price,
  • Nature of the industry, and
  • State of the economy.

Although the length of time for each step may vary, the actual steps will remain consistent.  A sales person might be able to influence some of the steps, but it is almost impossible to skip a step.

 Buy Cycle

1. Awareness - The buyer must have some notion that things could be better.

  • A need arises to solve a problem or pain that exists in the buyer’s environment
  • A buyer is creative and begins searching for a possible solution that will improve their company.
  • A sales person, friend, or business associate suggests a product that’s been successful in other companies.

2. Need/Pain Recognition - Before a buyer is motivated to move to the next step in the cycle, the buyer must “feel” the pain or recognize a potential opportunity to the point they are willing to research potential ways to do something about it.

3. Visualize Solution - Research is conducted to identify possible products that might satisfy the identified need/pain.

4. Evaluation - The various options are analyzed in an attempt to determine best fit.

5. Decision - The product that best meets the buyer’s needs is selected.

Sales Cycle

Sales Cycle & Buy Cycle   |   Buy Cycle  |   Sales Cycle    |    Personal Sales Cycle

Companies operating in a B2B marketplace depend on their sales organization to generate the revenue necessary for a viable business.  CEOs of those companies are more likely to have a successful sales force if they can provide a predictable, repeatable sales process.  Basic to the sales process is an understanding of the classic Sales Cycle.  As with the Buy Cycle above, there will be some variations in each specific sales opportunity, but each of the steps needs to be taken to help insure a successful outcome.

A successful sales person will adjust their Sales Cycle to best match the Buy Cycle of the prospective customer.  Although the length of the Sales Cycle can be impacted by a salesperson, the Buy Cycle will be the main control and will be guided by the factors mentioned above.

Sales Cycle

1. Qualify Lead – Identify Need / Pain – An effective sales person recognizes that their time is limited, so qualifying a lead up front is critical.  Qualification can be based on factors such as whether the prospect’s environment is a fit, whether they have an identified pain or need, and whether there is a project/budget for the product.  Qualifying new lead is crucial to determining the best prospect that warrant the sales person’s time.

2. Identify Decision Maker(s) & Build Relationships – There is always someone at every company that will be willing to occupy the time of sales people.  However, in many cases, those people will not be able to make a decision or sign a contract.  As soon as possible, a sales person must identify the individuals in a company that can influence or make a decision, and build relationships with them.

3. Offer Vision / Solution / Value Proposition - After the level of pain or need is identified and is clear in the mind of the prospective customer, the sales person’s task is to create a vision of the prospect being successful using their product in such a way that it is a better solution than any other alternative.  Having in-depth product and domain knowledge is essential to being able to create a clear vision of success.  Prospects must understand the value of your solution before they will move to the next step.  If the level of pain or need is relatively low, the sales person must decide whether to take the time to try and influence the pain level, or to move on to more viable prospective customers.

 

4. Provide Proof & Handle Objections - During the evaluation stage of the Buying Cycle, the sales person must provide proof that their solution will fit the buyer’s needs better than other alternatives.  The process will vary depending on the product and the buyer.  More than one type of proof may be required:

    • Presentation
    • Demonstration
    • Testimonials
    • References
    • Site Visit
    • Trial

There are typically some bumps along the road.  Usually, competitors are involved and they frequently supply the prospective customer with some perceived weaknesses in your product.  These disadvantages sometime come back in the form of objections.  Other times, the objections are due to lack of knowledge on the part of the buyer.  Having a good understanding of the strengths and weaknesses of one’s product is crucial for being able to handle objections.  Occasionally, objections are presented just to see how the sales person will react, but are not important to the person posing the objections.

5. Establish Terms & Conditions / Negotiate - Terms and condition of the sale must be clear to the buyer.  Knowledge of the license agreement or contract terms is important to being able to successfully negotiate a deal.  Knowing what terms are negotiable and then knowing when and how much is appropriate will lead to win-win agreements.

6. Close – Get the business – get the agreement signed at terms fair to both the buyer and the seller.

A somewhat confusing aspect of the traditional Sales Cycle is that some terminology used in the cycle is used at multiple stages of the cycle – making it seem not to be a “cycle” at all.  For example, one may “Negotiate” on the best date and time for a presentation.  And, then may “Close” on the date and time for the presentation.

One of the complexities of managing the sales process is how to keep up with multiple prospective customers that are progressing along their varying steps in the buying process.  Because prospective customers drop off for various reasons along the way, there are typically more prospects in the process of being qualified than there are prospects about to close.  This concept is typically described as the sales funnel.  One of the key metrics of sales management is to monitor the number of prospective customers in each stage of the process and to make sure enough qualified leads are being added to keep the funnel at efficient levels for each stage.

Sales and Marketing. There are people who do that, right?

pifall_sales_and_marketing Ironically, once the Founder is stretched beyond breaking and decides to bring on a Sales Person, the thing that previously was too important to delegate is now dispatched to the new VP, Sales and Marketing.  The Founder congratulates himself on this major step forward:  “Now I can focus on the Product and know that Sales/Marketing is happening…whatever that means.  The VP tells me everything is on track, we’ve got good Traction in the marketplace, the pipeline is filling up, and two new contracts will be signed next week.  Sales and Marketing—Check!  It’s good to be King!”

“How’s that new Marketing, I mean, Sales guy doing? (My new Sales guy tells me we need a Marketing guy, so he wasn’t as qualified as I thought.)  It’s been 3 months and no new Sales?  Sure, I understand, it takes a while to understand the Product.  Training, yeah, I get it.  Our products are very sophisticated.”

… [ 3 months later] “Still no new Sales?  I guess that’s understandable, these Sales Cycles do take time.  But the pipeline is better than ever!  Great!”

… [3 more months later] “Whatever happened to those two contracts that were going to sign 6 months ago?  Yes, please do get back with me with the details.  I read in the trade magazine that our competitor signed a big contract last month?  Were we in the running?  Oh, inside job?   That’s tough.”

… [more time passes]  “If the new VP of Sales doesn’t sell something soon, he’s going to leave unless we extend his commission advance.  Then we’ll have to start all over! “

I’m about done with that Sales Guy!  The only sales we’ve had since he came are the ones that I closed!  And he expects me to pay him a commission for those!  Fire him!”

… [3 months later] “Wrongful Termination?  He’s got an attorney?”

Channeling

Channel Partner Relationship Management.  If it sounds complicated, it’s because it is.  You might think it is a game for big companies, run by a Senior VP, somebody who has a lot of experience with that sort of thing.  However it is exactly when you are a fledgling company that the channel partners are so appealing to you.  You haven’t yet built out your own Sales staff, you haven’t gotten in front of enough people to really get your messaging down.  A guy comes along, “I like what you’re doing here.  I think I can sell this.”  You go back and tell your team “I have found the solution to our Sales!  I have the guy who’s going to make us all rich!”

Your new Channel Partner (two months ago, you didn’t even know what that was!) says, “I’m already in the market talking to everybody.  I can use your product.”  (Everybody wants another arrow in their quiver.)  So you say “Sure!  Great!  All my problems are solved.  I don’t have to worry about Sales anymore.”  The Channel Partner is out there rattling around for several months.  Every now and then you get a call and answer some questions.  “This is going great—lots of prospects in the pipeline.”  After a while, you realize nothing is really happening.  You ask the Channel Partner how he’s doing.  He’s selling alright, just not your product.  You wonder, “What’s wrong with my product?”   During the next phone call with one of his prospects you suggest to the Client, “I think you should really switch your focus.  It makes more sense to buy my product first, then from that platform your staff will be better equipped to use Channel Guy’s product.”  You’ve just stepped into Account Control Hell.  Now your Partner is upset because you’re trying to take control of his account.  Forget it.  It is not going to work. chaneling

If a Channel Partner looks really good to you, there’s a good chance it is probably because they have a Sales staff and you don’t.  They have client relationships and you don’t.  They’re most likely bigger than you.  They think you should be satisfied with being along for the ride.  If it will be a good relationship it’s because they actually need your product to sell theirs.  You have managed to have a product that they cannot easily reproduce.  That is going to bother them forever.  And when you don’t do what they say (because it is your product after all) they are going to get angry with you.  Here you are, helping them sell their product, a product that is clearly missing key functionality that the client needs.  And they’re mad at you, primarily because you exist!

The Channel Partner’s Sales staff don’t really understand what your product does.  You find out they’re saying that your product does things that it doesn’t and that it doesn’t do things that it  does!  When you ask “Why didn’t you sell this option to the last customer?”, your contact replies, “I didn’t know you had that!  Why didn’t you train my salesmen properly!”  He’s right, you should have.  In fact, you would have provided training if the Channel Partner had allowed you time at his last national sales meeting, but the agenda was already full with their products.

Pretty soon you have three or four Channel Partners out there, all rattling around, talking to the same accounts.  A highly motivated Client Prospect calls to you to ask, “Which of these Sales people represents you?”  You don’t know.  You’re just excited that he cares!  You manage to work through the confusion by engaging the Buyer directly.  He buys!!  (You decide on whose “paper” it gets contracted, whether it’s yours or one of your Channel Partners’, more on that later.)  Now three Channel Partners say “You owe me a commission.”  If your commissions are typically 20% for the first year revenue, 60% (!) of your top line is going to pay off your channel partners.  Probably none of them really closed the deal.  You had to sort it out at the end and close it yourself.  You lose money, nobody’s happy and you had to do most of the selling work anyway.

Bottom line:  Channel Partners don’t save you any time or effort.  All the hard work of figuring out what happens in your product’s Sales Cycle, what it takes to buy it, what Buyers need to know, and when they need to know it, all comes down to you if your product is ever going to get sold.  You might have an excellent Channel Partner who is perfectly complementary and non-overlapping with your product and has an excellent sales force.  Even then, you still have to do all your own work.  The Partner is just funding the Salesmen, not you.  It is their investment in the Sales organization that you have the opportunity to leverage.  But proceed with caution.  You don’t control those people.  Sales people follow their compensation plan rather than what their manager tells them to do.  With the stroke of a pen, the Partner can change their compensation structure and now your product is not getting sold.  They have focused on something else.  You don’t control them.

Build It & They Will Come

They might come, if they actually knew about the product.  But how will they know about it and what is the process you use to make it happen?  A friend could tell a friend, they could read it in the paper or a trade magazine, somebody might phone them at dinner time and sign them up, they could see an ad in a magazine–“Call this number” or  “Scan this code”, follow a sponsored link, find you at the top of a Google search.That is the Marketing Challenge.  How will your Buyers discover that it is your product that they want?  It doesn’t happen by itself.To make matters worse, somebody is probably already out there telling your Buyers things that sound like the same thing…and they’ve already tuned it out.

Once you hit on something that really makes a lot of sense, your competitors start to say the same thing whether or not it’s true.  You always have to stay one step ahead.  But it’s hard!  You had trouble getting the first message articulated.
Build It & They Will Come

Got Marketing?

Marketing is about making sure you get your message to your Buyers in time: before they buy.  Marketing is the art of getting the right ideas in the right heads at the right time.  (Not to be confused with Sales, which is about getting a “natural person”, not a “market segment” to sign on the dotted line–yesterday, if possible!)  But where to start?  Here’s the short answer:  Talk to potential clients—Today.  While you are developing your formal Marketing Plan, start now with this informal one:  make time (early and often) for substantive ongoing dialogs with actual and potential clients.  Use that information to best structure the rest of a plan that fits your organization’s capabilities and budget TODAY!

What could possibly get in the way of starting Client Conversations?  Several things, actually, stemming from the Technophile Founder Personality.

Fear of Landing

Worried that the flood of activity will overwhelm you once your marketing plan is put in motion?  “Let’s not prioritize marketing yet, we have more work to do to be ready.  There are product features that still need to be built, customer support staff to hire, management books to read….  “   What if you could see the lay of the land clearly?  A quality conversation with a potential client can clear the fog for a smooth landing.

Solutions Looking for a Problem

Technologists like Technology.  Technical achievement is how they measure their worth.  It’s what drives them to create wonderful products before the rest of the world even dreams them.  Notice that last point, “before the rest…even dreams”.  There are few things more frustrating to a Technologist than creating a product that people don’t know they want—“The Fools!”  Whoa, there, big guy.  Remember, you  ARE special and it takes a different kind of creativity to translate your new vision into terms the rest of the world can understand.  People begin listening when the conversation turns toward a problem they are experiencing. If you can’t find words to define the problem your product solves, keep talking to the Clients until you do.  Oh, and there is a slight chance that not enough people have that particular problem.  That solution might need to take the back burner for now, because that last Client mentioned a huge problem that you can easily solve with the components you already built!

Pet Features

We all love our children, don’t we?  Technophiles love their creations that way.  They remember the moment they had that special insight (Ah yes, that nobody else could have seen).  They sacrificed days, no months, in the sunshine to imagine, design, and bring into existence this functional work of art.  They treasure the inspired relationship between the light and dark, words and image, action and response so special to that feature.  “Oh, I see an area here and that could be even more functional.  No, no!  Don’t look at it yet!  Wait.  It will speak for itself as soon as I get this last little…..”  Don’t take too long before you start that Client Conversation.  Lose as few sunny days as possible getting the concept articulated then start talking to (Future) Clients about it.  If you do find your creation to be pearls before swine, don’t hesitate to put it aside (at least for now).  Client tastes evolve, too. If you become part of their life as a vendor today with the product they are envisioning, your more perfect creation(s) may yet see the light of day.

Stealth Mode

Being the Best Kept Secret in your market is not a good Marketing strategy.  “Our new product is so revolutionary, we don’t want the Competition to get wind of it.”  At some point you have to tell people what is special about what you’re doing!  If you don’t, not even the Clients will know you exist.  Remember, the Competition will not be concerned about you until you actually start winning in Sales, and that won’t happen until the Clients know about you.  No need to be overly cautious.  Aware—yes.  Paranoid—no.  The key to winning against Competition is getting the Message right first.  That’s accomplished by staying in touch with the (Future) Clients.

Sales vs. Marketing

Technically oriented companies frequently use the terms “Sales” and “Marketing” interchangeably.  In fact, they are closely related because the purpose of both is to generate revenue, although through different but interrelated roles.  By understanding the purpose of each function and their differences, productivity and related revenue increases will be obtained.

Sales

Sales is where the rubber meets the road – the up close and personal process of getting the business; convincing prospective customers to sign on the dotted line.  Sales is Marketing’s direct channel of distribution for the products.  Sales is defined by Michael T. Bosworth in Solution Selling as: “Helping people buy – facilitating the buying process”.

 

Typical Sales Tasks Include:

  • Time & Territory Management, Forecasting, and Reporting
  • Prospect Qualification
  • Identify Key Players/Decision Maker(s)
  • Identify Pain/Needs/Goals
  • Identify Buying Cycle
  • Provide Vision of Solution
  • Handle Objections
  • Negotiate Contract
  • Close Sale/Execute Contract of License Agreement
sales_vs_mkt

Marketing

Marketing’s goal is to define the products, who needs them, how to get the word to those who need them, and at what price.Typical Marketing Tasks Include:

  • Market Research
  • Target Market Determination
  • Product Definition
  • Competitive Analysis
  • Product Pricing
  • Product Communication – Promotion/Advertising/Website
  • Product Collateral/Presentations
  • Lead Generation
  • Product Profitability

Four P’s of Marketing Marketing is frequently defined by the “Four P’s of Marketing” as explained in E. Jerome McCarthy’s, Basic Marketing, A Managerial Approach:

  • Product – developing the ‘right’ product or service for the target consumer.
  • Place – getting the right product or service to the target customer.
  • Promotion – any method which communicates to the target consumer about the right product or service which will be sold in the right place at the right price.
  • Price – determining the ‘right’ price to move the right product or service to the right place with the right promotion to the target consumers.

Sales and Marketing Organizations are Related, but Different

Marketing’s job is to get the word out to the many target customers while Sales’ job is to work one-on-one to close business, to obtain signed contracts.  Sales accomplishes this goal by identifying each prospective customer’s pain, needs, and/or goals and then communicating the vision of how their product or service solves the prospective customer’s pain, needs, and/or goals better than other alternatives.

Both Sales and Marketing evolve their processes as technology changes.  The Internet has opened opportunities for change to both functions.  For example, through Marketing Websites, companies can deliver their story anywhere in the world to anyone with access to the Internet.  Buyers then have more resources available to them.  As a result, they are able to conduct research on their own in a more efficient manner.  Armed with additional knowledge, Buyers now can move further along in the buying process before bringing in sales people.  Therefore, it is now more important than ever for companies to have websites that meet prospective customers where ever they are in the buying process.  The goal is to not only provide critical information, but to be a compelling resource whose product is worthy of further consideration.

Social media marketing has also opened up direct access to customers as well as prospective customers.  As prospective customers hear from actual customers, the marketing process is enhanced.

New sales processes are also available via the Internet.  Think of the impact that Amazon.com and ebay.com have had on retail sales.  Retailers now have the option of providing an online storefront as an alternate channel of distribution.  However, for the larger, consultative sales, sales people are still required for the one-on-one sales process.  Prospects still need to recognize their pain, needs, and/or goals so they will be able to visualize the best solution for them.  Although the Internet has had an impact on the buying process, the actual steps a buyer goes through remain the same.  (Link to: Sales Cycle vs. Buying Cycle)

Sales people who are savvy and recognize how the Internet influences buying cycles will be much more productive.  With awareness and the ability to spot the status of the buyer in their buying cycle, sales people will be more efficient, close business faster, and produce more revenue for your company.

It is important to understand the differences in the two functions in order to hire talented, experienced people to fill these different roles.  It is true that there are some maverick sales people who can do both jobs effectively, but most individuals are better suited for only one of the functions.  Just because someone has the ability to create a compelling marketing scenario about a product, does not mean they will be able to hold up from repeated rejection from prospective customers.  Likewise, a salesperson who handles rejection well, might not have the creative ability to produce a winning marketing program.

Organization

Where should these functions reside within an organization?  Should Sales report to Marketing or should Marketing report to Sales?  Or, should they be organized at the same level reporting to a common vice president?  Or, should they be combined into one origination?

In a new organization, both the Sales and Marketing functions may be accomplished by the same person or group of people.  Eventually, the time and effort to keep the promotional materials up to date with an evolving product will take time away from selling activities and sales activities will take time away from marketing activities.  Eventually, personnel with specialized experience will need to be added in order to meet both Sales and Marketing goals.

Organizations can be successful regardless of whether Sales reports to Marketing, or if Marketing reports to Sales, or if the Sales organization and the Marketing organization both report to a VP of Sales & Marketing.  What is important is that both functions focus on the prospective customers and keep the message up to date with their needs and with the product’s evolution.

The two organizations may not always “get along”.  As sales people make calls on prospects and observe their reaction to the marketing materials, there is a tendency for sales people to make local modifications to fit their style, and in their view, improve the message.  Marketing personnel will complain that the sales people are not accurately portraying the product by modifying the message.  What needs to happen is for both groups to listen to existing and prospective customers’ reaction and feedback and work together to make sure the message and materials are up to date and delivers the best vision of how the product meets their needs better than other alternatives.

Sales and Marketing Pitfalls:
Confessions of a GEO (Geek Executive Officer)

Confessions of a GEO Banner

Build It & They Will Come

Posted on Jan 21st, 2013 - By BaylonST - 0 Comments

They might come, if they actually knew about the product.  But how will they know about it and what is the process you use to make it happen?  A…

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Channeling

Posted on Jan 21st, 2013 - By BaylonST - 0 Comments

Channel Partner Relationship Management.  If it sounds complicated, it’s because it is.  You might think it is a game for big companies, run by a…

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Sales and Marketing. There are people who do that, right?

Posted on Jan 21st, 2013 - By BaylonST - 0 Comments

Ironically, once the Founder is stretched beyond breaking and decides to bring on a Sales Person, the thing that previously was too important to…

Continue Reading