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Guest Faculty post by Eric Protzman
The Prospect Screen should be your most trusted advisor.
Think of it this way. You date and you date and you date, then you find the right person and you get married. Dating can be random, opportunistic, indulgent and impulsive, all characteristics you simply can’t afford in marriage.
In the past, what you call prospecting may well be impulsive or opportunistic dating. You may not be taking the time to investigate what is in your best interests.
What we are talking about in prospecting large accounts, transformational accounts, is not dating, it is marriage. Look at the long term implications of having the right customer, or having the wrong customer. I think you’ll get a feel for the strength of the metaphor.
I started Aim Direct Marketing in 1995. Tom Searcy was guiding my business development and very late one night after imagining this and designing that I said to Tom,“I don’t like mission statements and I think most business plans are just a list of things that don’t happen, but I do think we should talk about our core competency”. Bleary eyed and exhausted Tom tilted his head and said, “Where you are right now Eric, your core competency is anything anyone will give you a check for”.
That was just a phase. Do you recall this phase in your business too?
It is an exciting, thrilling and frightening time. But that time gives way to more stable and intentional times. As we become more sophisticated in our mission, our operations and our innovation we may not bring along the same sophistication in our sales efforts.
Is there a misalignment between your company’s sales strategy and your business strategy? Perhaps you are driving toward significant growth, but your sales force is chasing small accounts that will never result in enough revenue for your company to achieve your goals. Or, maybe your sales team is focusing their efforts on landing large accounts when your business strategy is to grow by diversifying your client base with multiple smaller accounts. Either way, a misalignment between your sales strategy and business strategy results in lost growth opportunities for your organization.
See the article I wrote for Chief Executive on how to examine what sales strategy your sales force is currently following and determine the one you should be following.
“Is your Sales Strategy Properly Aligned with Your Business Strategy?”
Strategy 1: Get Super-Efficient at Transactions
Gartner estimates that by 2020, customers will manage 85% of their purchasing transactions without talking to a human. Therefore, if your business strategy relies on your sales force targeting numerous, small accounts, your sales strategy should drive your sales force to become the most efficient and effective transaction processor it can be. This can be accomplished by improving transaction efficiency. This is typically done online, through a portal, a store, or an inside salesperson. Through this process, your company is valued not for the salesperson’s knowledge, but for how quickly, accurately, and cost-effectively you can provide value.
To review the other strategies go to: http://chiefexecutive.net/is-your-sales-strategy-properly-aligned-with-your-business-strategy
Want to learn more about how to grow in this new era of sales?
You’ve heard it over and over again as CEO—delegate, delegate, delegate! Learning how to delegate is crucial for every CEO, yet research shows that one of the top areas board directors say CEOs still need to work on is “sharing leadership/delegation skills.”
With all of this focus on delegation, is there such a thing as over-delegation? You are, after all, CEO—NOT Chief Delegation Officer. So while it is important to delegate some things, not everything should be delegated.
Below are 5 areas of your business that are your responsibility to always monitor closely:
1) Quality Standards
As CEO of your company, as soon as you stop paying attention to the quality of your products and services, so will the rest of your employees. While you can delegate quality control to employees, you cannot delegate setting the quality standard. That comes from the top and should be protected by the top. The quality of your product or service will only be as high as the bar you set as CEO. No one has sharper eyes, ears, and intuitive knowledge of what quality means for your company than you.
2) Financial Health
Having your accounting and reporting tasks performed by trained CFOs and accountants is necessary, but what is not necessary is to yield all decisions about your company’s future and supporting tactical initiatives to your financial team. While your financial team is your right hand, you are exclusively responsible for telling that right hand which tasks to focus on accomplishing to maintain the financial health of your business.
The Oddsmaker – What’s Your Chance of Winning?
Vegas has its oddsmakers. These experts evaluate all sorts of data to determine the likely outcome of some event- usually a competitive sporting event. All sorts of information is considered in the calculation- health of the contestants, past win-loss records, positional match ups, even weather. Then they make their predictions.
The good ones have a secret formula that they use that, when combined with their experience and instincts, allows them a higher accuracy than their competitors. They call it their “system”.
For large account sales, I can give you my formula- the rest of the system you have to come to The Academy to learn.
- Start with zero
- Executive Sponsor: If you have a Executive Sponsor, add 30 points
- Buyer’s table: If you have established contact with three or more of the members of the prospect team’s buying group and have met with them face to face, add 10 points. If not, then subtract 15 points.
- The Eel: If you have identified the Eel and are engaged with them in the sales process, add 5 points. If you have not identified the eel, or if you cannot get their engagement, subtract 15 points.
- Hunt team connections: If you have introduced three or more people in a meeting or on-site visit for a period greater than 45 minutes to members of the prospect team’s buying group, add 10 points. If not, then subtract 15 points.
- Needs assessment: Add 15 points if you are able to perform an in-depth needs assessment as a part of the preparation of your proposal.
There is a simple test to understand your relevant power position as a trusted adviser with your clients. Ask yourself these questions:
- Do they call you first? Whether it be issues of opportunity, challenges, or a need for market insight – whom does your customer call first? In uncertain times, people look for certainty and authority – qualities provided by the most trusted. If you are not getting those calls, someone else has their trust.
- Do you get last look? When your customer wants to keep you as the preferred partner, they assist in the buying process. That shows up in the form of access to influential people within the prospect’s organization and information that will help you in winning the business. If you are not getting unique access or last look at scope, specs and price, you are not in the favored position.
- Do you receive a premium price? Competitive bidding will diminish the range of prices that can reasonably be considered on many of the commercial purchases in the marketplace. A premium is expressed as any amount over that of the next most credible provider’s price. When a customer wants to keep your insights and value, you will be able to keep your price premium.
Often with customers we believe that we have a great relationship. This can lead you to believe that you have a unique relationship or a powerful connection. The real measure is behavior. Ask the three questions to determine if you are really in a power position.
An entrepreneur shares the 5 most important lessons he learned while undergoing through the traumatic experience of closing down his business.
My friend Richard just closed his business. He’s a smart person, creative, ethical and hard-working. It was a big blow, but he’s a positive person and now he’s back at it. I asked him to share what he learned from the experience and I found his response so encouraging I wanted to share it:
“Having closed a thirty-year old commercial plumbing contracting business that I bought from its founders in 1999, I share these lessons learned for the benefit of my fellow serial entrepreneurs.
#1. Be Careful When Choosing Partners
After previously doing two large, successful projects in partnership with another specialty trade contractor, I learned the hard way that who you select as partners matters. Really matters, as in life and death matters.
When the senior executive with whom I had done the other projects left the firm, I had no reason to think that things wouldn’t continue in the same positive manner. Unfortunately, that wasn’t the case. Not only did the new executives take $8 million of my scope of work after we secured a big hospital deal together, I ultimately had to file a lien and lawsuit for damages approximating $1 million.
#2. Don’t Wait to Deal With Problems
When my partner company started shorting my monthly draws by $30,000 to $40,000 towards the end of the project, I should have reduced payments to my vendors in kind.
Is it time to go back to some broken relationships?
Lots of business relationships end. Customer-vendor, business partners, alliance and channel relationships…they often run their course and they end. Some end ugly.
Time does heal many things because the people, circumstances, challenges and experiences change. After the earth has made a couple more loops around the sun, it may be time to go back to some former customers or partners and see what has changed.
Keep in mind:
1) Personal integrity – In circumstances of gypsies, tramps and thieves it is highly unlikely that those people’s personal integrity has gotten better. I encourage you to check and see if the people have changed if your exit was based upon someone’s poor integrity. Don’t forget the mirror. Maybe someone in your organization was the villain. Are they still around?
2) Go in curious – Ask what has happened in the past months, years and so on as it regards their business. What have they learned and what has changed. Don’t ask for business until you understand if they have learned anything that will give them new perspective.
3) Go in open – Be willing to enumerate what has changed and what you have learned in the past cycles that have given you new perspective.
If you can go back to some of your old customers and partners and determine what has changed, it is possible to find new business opportunities that make sense.
If your business is going to grow, you need employees who can think like an owner. Here are a few techniques to make that happen.
One of the great challenges in running a fast-growth company is aligning your company’s vision, mission, value, and culture with the daily activities of the business. It is vital, however, as the growth of your company is in part dictated by how quickly you can transfer these values from the mind of the owner to everyone else.
I have built four companies that grew at 10x each in less than 5 years. Here are some of the techniques I found useful in developing “owner’s eyes” in my people.
1) Pair up–As a leader, if you are operating alone, you are missing an opportunity for development. In growth companies, there are always new opportunities just around the corner, so you should always be developing people to go beyond their existing positions. Skills-training is relatively straightforward, but imparting the company’s mission, vision, and values to employees is more difficult. Spending time with your people and exposing them to your approach is a good start.
2) Repetition changes minds and habits–If you want people to see like you do, it helps to ask the same questions over and over. As you ask these questions when you are pairing up, they will subconsciously begin anticipating the questions and will seek to have the answers ready when asked. This is training that allows for the alignment of company values from one leader to another.
Ask these questions to your employees:
- How do we make money?
- What is our biggest cost that we control in our service or product?
- How do you help make us profitable?
If your employees in your company can answer these questions to your satisfaction, stop. You are doing everything you need to do and you should just keep doing it.
However, if not, then go to work.
Make it clear – You are not trying to teach an MBA level course. You are seeking clarity of what the 2-3 big levers are that make the key difference.
Connect the dots – Help every person to see what his or her contribution is to those few levers. Be specific. By getting people to see how their efforts change the numbers, you can reward behaviors that fit and correct behaviors that don’t. A trucking company I know explained to their drivers what the ratio of idling time was to fuel cost. Simple change, shut off trucks on deliveries that are two floors above the first floor, or unloading over more than one palette.
Monitor and reward – Behavior modification 101- what gets measured and reinforced gets done.
Forget the long-winded speeches and pointless anecdotes. Tom Searcy’s advice for the new crop of graduating entrepreneurs is short and sweet.
Tis the season for the drudgery of graduations. No offense to the graduates, but most graduations are 90 seconds of interest, (the march across the stage by your child or one of their friends), packed into hours of tedium, often pinnacling with 20 minutes of platitudes in the form of the dreaded “Commencement Speech.” With a few exceptions, most of these speeches are just recycled encouragements voiced out to a hot and sweaty crowd which is more excited for the after-party than the graduation itself.
If I were to give a commencement speech to all of the new entrepreneurs of the 2012-2013 graduating class, it would be short and sweet. Here it is:
“Congratulations on getting started in the great adventure of building businesses and realizing your dreams. As you launch out into the world with your ideas, business plans, and market-conquest offerings, let me give you a few words of advice that apply to all entrepreneurs regardless of your business.
First, Always start with your customers–You may be tempted to start with your logo, website, message, pricing, or methods of approaching your market. Resist these distractions. Get clear on your customer. If you really want to build an amazing company, you need to be crystal clear on who your customer is. Where does she eat, shop, walk, visit online, and follow on social media. What does he worry about, pay too much for, and scrimp on as he makes his purchases in life.