Achieving new sales of your business product or service solutions requires care and finesse, especially in lean times. Mike Cameron explains what makes a ‘good’ customer and how producers can use that profile to achieve mutually beneficial ends.
Think about your ideal customers – the people you enjoy working with and the companies who value the relationship that they have with both you and your organisation – and then compare that thought with the people and customers associated with your most difficult and/or challenging accounts. You may ask yourself:
- Is it easier doing business with our best accounts?
- Do our ideal customers share similar values to our own? Is their culture one where they seek to create valued partnerships rather than chasing a lower price?
- Can we clearly identify the key characteristics of both our best and worst accounts?
Successful sales professionals don’t look at every sale in the same way; they plan well, aligning their strategy with their customer’s profile, in order to establish a realistic Key Account Plan (KAP), with action steps and a clearly defined sales objective.
Table 1. The six important components of a Key Action Plan.
An effective KAP isn’t just about winning business or creating a product/service/price fit; it is about establishing whether the organisations share similar values while creating long term, and mutually beneficial, relationships.
A KAP has six important components: objective; strategic focus; target contacts; core strategy; competitors’ reaction; and action steps (see Table 1).
Key account plans are an integral part of the total business planning process (see Figure 1).
The impact of change is clearly evident in today’s fast-paced business, requiring you, as a sales professional, to develop specific skills that will lead to reliable selling strategies.
- Selling strategies and the tactics that have delivered your current success will not necessarily guarantee future success and/or business growth.
- To succeed in tomorrow’s world, you need to continuously review your position to know what you are doing, why you are doing it and how to implement your tactical sales plan.
- A good tactical sales plan is only as good as the strategy that led to its creation, supported by realistic action steps and a regular reviewing and monitoring process.
Figure 1. The considerations that underpin a Key Account Plan.
AN ‘IDEAL’ CUSTOMER PROFILE
As a sales professional, you are employed to generate revenue through sales, so obviously, you can’t always pick the ideal customers. However, through utilising a structured planning and monitored account management process, you will know where and how to spend your time more effectively – which is often the best investment you can make.
Ideal customers and prospects are the accounts with the highest value return on your effort. You should be nurturing them with a passion since, apart from the obvious enjoyment of working with people you like and respect, when an account is not ideal the impact on you can be:
- Longer sales cycles.
- Challenging relationships.
- Lower margin business.
- No referral-ability.
- No reference-ability.
- No repeat business.
- Difficult to manage.
- A source of frustration.
In managing a sales process, especially when dealing with prospects and/or substantially growing an existing account, you need to focus on personal wins for each of the target contacts that you have identified within your KAP.
These wins are intangible and non-quantifiable but when you focus on identifying and addressing them, you start to work on meeting their individual needs, establishing rapport and building a relationship rather than filling a procurement requirement.
It is important to understand that your attitude, behaviour and credibility during this initial sale will largely determine your customer’s perceptions and impact on how they will treat you and your organisation in the future. As a strategic and sales professional, you need to think in terms of:
- Shared values.
- Long term relationships.
- A source of enjoyment.
- Projectable sales cycles.
- Equitable margin business.
- Good referral-ability.
- Good reference-ability.
- Repeat business.
One way to achieve the above outcomes is to ensure that the sale is seen as a “win-win”. There are perils in other approaches that leave you either stronger or weaker than your customer, eg:
- You may obtain an order through unethical and/or deceptive behaviour and, thereby, generate a short term revenue gain. However, in the longer term, your reputation will be tarnished and your organisation will be excluded from future business opportunities.
- You should also be aware that, rather than gain respect, you can quickly lose credibility when you succumb to pressure from your customer to (i) trim your margin in order to make a sale or (ii) have your proposal shared with other product/service providers. Your customer doesn’t see the value you offer; they see you only as a cost or a commodity.
Note: Buying the business, or gaining a partial share of it, may seem like reasonable strategies at times, but usually they are not. You should never negotiate giving something away without receiving something in return.
There are four possible outcomes with every sales encounter between a customer and a provider/supplier. They are:
- WIN-WIN: Both of you – the salesperson and the customer – win. You both appreciate that you have each achieved what you needed from the transaction, but not at the expense of the other.
- WIN-LOSE: You win at the expense of the customer. It is a short term scenario, because that person, or their organisation, will always find out with the likelihood of repeat business being minimal.
- LOSE-WIN: The customer wins at your expense. You are subsequently categorised as a commodity because you ‘bought’ their business.
- LOSE-LOSE: Both you and the customer lose. You make the sale but neither one of you feels good about what happened to make the sale occur.
Many sales professionals work on the premise that people buy when you demonstrate to them that you can meet their immediate business needs. However, this is a product-orientated process focusing on features and benefits that frequently require the salesperson to carry out demonstrations in order to obtain orders. It is not a relationship or partnership scenario.
People buy for one of two major reasons:
- To gain a benefit or avoid a loss.
- To gain a feeling or avoid a feeling.
In a practical sense, it may be that the customer perceives an opportunity to meet a new goal or exceed a pre-determined revenue target, or the customer sees an issue in achieving their budget and can rectify the situation by applying and using your product/service or solution.
The result, in either case – the impact on both the customer’s business and the opportunity for relationship development – is positive.
The seven steps in the key accounting process.
Obviously, as a sales professional, your role is to sell but you will also want to do more than just sell, you will want to create a “win-win” situation or “partnership” scenario.
The “win” is buying psychology. It’s a personal gain that satisfies the personal self-interest of the many “buyers” within your customer’s organisation. “Win results” are tied together and are the real reason why people buy.
The “win result” concept rests on the following terms:
- Selling: Selling is a professional, interactive process directed toward demonstrating to all the “buyers” within your customer’s organisation how your product or service assists their individual self-interest.
- Product: A product or service or solution that is designed to fix or improve one of your customer’s business processes.
- Process: A process is an activity or series of activities that converts what exists right now into something else.
- Result: A result is the measurable impact that a product has on one or more of your customer’s business processes. Results are objective and corporate, and they affect many people at the same time.
- Win: A win is the fulfilment of a subjective, personal promise made to oneself to serve one’s self-interest in some special way. Wins are always different for different people.
- Win result: A win result is an objective business, a result that gives one or more of the “buyers” within your customer’s organisation a subjective, personal win.
Note: It is important to understand both halves of the “win results” concept.
A result must take place before a “buyer” will perceive a “win”.
A result is the precondition to any win.
You may think that a result you bring to a “buyer” is exceptional but if you don’t think about the personal win, it may be irrelevant to his/her situation or it could even be interpreted as a personal loss.
A win-lose situation frequently arises due to the salesperson not appreciating the motives that drive the individuals who are involved in the buying/sales process. To avoid this problem, always remember the following key point:
Companies get results – people get wins.
- Use deductive reasoning.
- Appraise lifestyle.
- Evaluate attitude.
- Consider what is communicated.
- What grabs each individual’s attention.
You can ask open questions, like the following examples, without creating embarrassment, eg:
- How do you feel about our proposal?
- What is your opinion on the product/service/solution?
- Do you believe that our product/service/solution will support you in the achievement of your goals?
- Does our proposal meet your personal objectives?
- When we deliver, as promised, what does our proposal do for you?
Additional questioning, done correctly and face-to-face, will assist you to identify any difficulties that any individual “buyer” may be having in making a direct connection between your proposal and their own personal wins.
Remember that the main reason for asking questions, such as those above, is to ensure that you identify any/all issues that may hinder your achieving the sales objective within this particular customer’s Key Account Plan. So, don’t feel uncomfortable, it is a necessary part of the sales process.
- Ask about results first then, when appropriate, ask “win” questions.
- Don’t interpret results as the “win”.
- Don’t assume that your own “win” is the same as an individual “buyer’s” “win”.
Mike Cameron is an IQA member and the principal of Strategically Yours. Visit strategically.com.au