The average experienced and trained salesperson could close more sales. They don’t go as far as they could   in uncovering their prospects’ needs, raising how high the prospect ranks the importance of benefits and boosting perceived value to the highest level possible. They do enough to be a good producer but lose some sales they could have closed had they done a little bit more. The reason these salespeople don’t do more has nothing to do with sales techniques or process, both of which they are usually good at. They do not fully understand what is going on inside their prospects’ minds and what would increase the probability of their saying yes.

Why People Buy

The top 10% of sales producers understand what goes on inside a prospect’s mind, which allows them to go beyond other sales professionals. While talent or a gift may account for up to 40% of a star performers production, 60% of that production gap is due to a deeper understanding about why prospects say yes and no, and a realistic sense about what they need to do next to get prospects to buy.

First Concepts has prepared a research report about why people buy and why top salespeople sell more. This report describes in more detail what is behind these findings and what salespeople can do to address them. This research was conducted by observing hundreds of salespeople calling on prospects, interviewing those prospects, and then interviewing the salespeople about the call. It was confirmed by comparing what was learned to the results of having over 3000 salespeople call on First Concepts founder Don Shapiro where he recorded what was going on in his mind during those meetings.

This study presents new information for salespeople that, while subtle in nature, can have a dramatic effect on how many prospects a salesperson closes.  First Concepts offers a sales training program to teach salespeople why people buy and what that “little bit more” is they need to be doing with every prospect to increase the probability of a yes decision.

Today, salespeople have more methods, techniques, and training available to them than ever before. There are more account management systems and CRM software programs to support their efforts. Everything about the world of selling has become much more complicated. With all of this, it can be difficult for salespeople to keep their eye on the ball, which is the most critical element to make a sale.

Salesperson uncovering the prospect's needs

My thirty years of research into why people buy and the empirical research of others have all arrived at the same conclusion. People buy because they have serious, compelling needs. Without that, they don’t buy. Period. This is why virtually all sales training and selling systems today put a major emphasis on uncovering prospect needs.

What Is The Prospect’s Need?

Most salespeople remain unclear about when they have finished the “uncovering needs” stage and are ready to make their presentation. What is a prospect’s need? When does it become compelling? When is the need enough to justify buying something? How serious does the need have to be to justify the price? All those “uncovering need” techniques don’t offer clear enough answers. That leaves salespeople to their own interpretations and judgment calls. Too often, they call it wrong.

Salesperson who just lost a sale

Many salespeople think that if they get the prospect complaining about the way things are right now, they have uncovered the prospects needs. Then, after trying to handle a barrage of objections during their presentation, they walk out of the prospect’s office without an order. Unfortunately, some salespeople and even their sales managers might think this calls for learning better objection handling techniques!

The term “need” doesn’t actually have a useful meaning to a salesperson. It’s not a prospect’s complaints. It’s not a prospect’s frustrations. It’s not a prospect’s issues. It’s not a prospect’s wishes or goals. Could all of those become a part of the “need” that drives the sale. Of course they could. But by themselves, none of them constitute a serious, compelling need that justifies hearing a presentation let alone the price. There are only symptoms that a need may exist.

So we now have all these salespeople who have been trained to follow certain question-asking approaches, but those salespeople often remain clueless as to when the prospect needs have actually been uncovered. They think the answers to their questions constitute the uncovering of the need and justify moving into the presentation. In most cases, it doesn’t.

Only The Prospect Knows When They Have A Need

This all stems from one simple shortcoming in all our training about uncovering needs. Salespeople haven’t been taught the signposts that confirm the prospect is aware of a sufficiently compelling need to justify buying something. Only the prospect knows what they consider a serious, compelling, and costly need—the type of need that calls out for taking action. The “need” is not something salespeople can figure out themselves. It isn’t based on hearing a certain quantity of need type statements because each prospect has a different threshold for what constitutes a need. What might be serious and compelling to one prospect could cause another to just shrug their shoulders.

Really listening to a prospect

I first discovered this problem back in 1976 as a commissioned sales representative. These discoveries formed the foundation for The ABCs Of How People Buy. Each prospect defines a compelling need in their own unique way. No two are alike. And no amount of observations alone can give a salesperson the confirmation that the prospect is ready to hear their presentation.

A prospect goes through three distinct thought stages as they travel on the road from no to yes. At the end of each of stage, they arrive at a very clear understanding, which they could state clearly. These are called buying milestones. The prospect must cross each buying milestone before they are ready to move into the next stage of their buying process.

The Prospect’s First Buying Milestone

The first buying milestone is A= Action Needed. The prospect admits they have serious, compelling needs, and want to do something about it. This means they have a need that is compelling and costly. The ABCs teach salespeople the signposts they need to confirm when a prospect is ready to move to the next step in the sales process.

Prospect need has been uncovered

It is the prospect who must be aware of his own needs. It is the prospect who must confirm this. The fact that salespeople are aware is not enough to move a sale forward. The sale happens in the prospect’s mind. When salespeople get this verbal confirmation, they have officially uncovered the prospect’s needs and are ready to move the sale forward.

More sales are lost due to this one issue than any other. Research confirms that over 60% of what affects a salesperson’s ability to close a sale comes from helping a prospect arrive at the A=Action Needed buying milestone. If salespeople did this every time, they would close a lot more sales.

Learn more about Don Shapiro’s speech for sales groups on The ABCs Of Why People Buy

Questions?

Schedule a phone conversation with Don Shapiro, President of First Concepts Consultants, Inc., to answer your questions and explore how a deeper understanding into how prospects think out a decision to buy could help your salespeople close more sales.

This article shares discoveries to improve selling effectiveness based on 35 years of studying salespeople and buyers about how people think out a decision to buy and figure out value. These discoveries show new ways salespeople can influence a purchase decision and get prospects to accept their price that go beyond typical sales training and other practices.

The Prospects Mind

In fact, a recent win/loss interview survey revealed that 38% of prospects cited a salesperson’s failure to understand their needs as the number one reason a firm lost the sale. And these were salespeople from large corporations. That means over 1/3 of sales are still being lost because of what salespeople do and, it appears, existing abilities and sales training are not addressing this problem.

The article identifies some major reasons salespeople lose sales and why these are more about the choices salespeople make than selling methods or skills. Then it reviews the discoveries about how prospects think out a decision to buy and determine their perceptions of value. Finally, the eight ways these discoveries can improve salespeople’s performance are covered in detail.

This research offers  new ideas on how to address price resistance, value issues and help prospects justify a purchase. While this focuses on sales performance, these discoveries are equally effective at improving marketing strategy and tactics. Some of this research studies conclusions about the “buying process” and how salespeople can apply this knowledge to close more sales are not covered in any sales training program, workshop, speech or book. This is new information for sales executives, managers and salespeople that can help boost sales performance.

Please click on this link to see the PDF of this white paper.

The ABC’s Of How People Buy

Tax Credits, Small Businesses, Large Corporations, and Individuals

Economic Recovery

To really get the economy cooking, it will take the whole country and all its parts. If the public, large corporations, and government all took the appropriate actions outlined here, we would be on our way to true economic recovery. This plan is simply a management consultant’s pragmatic look at what can really affect the decisions of those who can produce economic growth. The problem with government and political analysis is that, for the most part, they don’t understand what does and doesn’t affect business choices.

There are three steps that—if done together by the general public, larger corporations, and the government—could add 1 million jobs in 2011 and up to 5 million jobs within five years. Will everyone do what I’m suggesting? The past does not give us the warm and fuzzy feeling that enough people will step up to the plate to do what needs to be done. But none of us have been thorough an economic nightmare like this before so maybe people are ready to stand up and take pragmatic action.

Let’s start with some basic concepts that form the foundation for these recommendations. Fortunately, almost everyone from all political persuasions agrees that these are a key. So we do have something in common to build from. First, small business is the key to hiring and job growth. They can hire more people and start things happening much faster than big business. Second, large corporations are mostly hiring people who are already employed instead of the unemployed. Third, America has shipped way too many jobs overseas.

While most people agree with these three concepts, ideas on how to get small businesses to come out of their cocoons, how to get companies to hire those who are out of work, and how to end or minimize outsourcing do not reflect what it will really take to make this happen. Small businesses are trying to avoid risk at all cost because what they see is a gloomy picture and they are cash starved. Large corporations generally do what is in their best financial interest and need incentives and pressure to change.

Here are the actions that can change the decisions of small and large businesses.

Business Tax Credits

Business Tax Credits

The key idea here is to offer large payroll tax credits for businesses that hire new employees and major first-year depreciation write offs strictly for small businesses that buy equipment.

The focus here is on small businesses. Large businesses don’t need these credits and will benefit greatly from the increased economic activity of the small businesses. Currently, large businesses are mostly hiring people who are already employed, so a smaller credit to hire the unemployed should be offered to them.

The HIRE Act passed by Congress in March 2010 is an example of Congress voting an act to brag that they did something, but the act itself doesn’t motivate anyone to do anything. It offers a 50% credit on Social Security taxes (not Medicare) for payroll in 2010, and if a new employee stays a year, the business gets a $1000 tax credit. Wake me when it’s over. The act produced no results because it didn’t offer enough incentive to cause a business to do what is needed—hire the unemployed right now. Compare that to my proposal with credits on actual payroll from 30% to 50% for smaller businesses and 10% to 25% for larger businesses. We are talking about thousands of dollars, and maybe even $10,000 or more in tax credits for each employee hired.

These credits will work because they attack the cause of small business inaction—risk. Small businesses don’t want to borrow money right now because they don’t want to add to their expenses in any way. Borrowing is risky, especially when the outlook doesn’t look promising. It’s too bad the government didn’t actually talk with small business owners and management consultants before they passed their recent legislation providing small business loans. But before we go further into why these credits would work, let’s dispense with the most common political proposal to help the economy, which involves income taxes.

A deep review of income tax cuts from the Bush and Reagan administrations does not provide a clear connection between these cuts and economic growth. Yes, hiring did increase and the gross national product did go up after these cuts, but a thorough economic analysis does not show a strong cause and effect relationship. In both cases, the cuts occurred right at the end of a prolonged recession. In all recessions since World War II, with the exception of the current one, economic activity and hiring rose substantially when a recession ended. It is more likely that caused the increases then the tax cuts themselves.

In my forty years in business and twenty-five years as a consultant working with business owners and executives, I have yet to hear that income taxes were a major factor in making a go or no-go decision on a business expansion plan. If a business can generate more profit, it will do so even if the tax rate is higher. Just because the tax percentage goes up, a business is still left with more money after tax from expanded sales than it had before the expansion.

I have discovered that when income tax rates are higher, businesses often spend more to get additional tax deductions and use those to help fund their expansions. The higher the tax rate, the more it pays to increase deductible expenses as long as those expenses can contribute to growth. While there may be an occasional business person that puts more emphasis on income tax rates, generally taxes do not drive business decisions.

What does affect business decisions, especially small business decisions? First, business people look to see if there is anyone else out there who might buy what they offer. They need to see prospective customers. Second, they tend to respond to anything that will help them reduce their expenditures while allowing them to pursue more business. Third, they want to grow but not take on additional burdens like loans or more employees in a weak economy. Fourth, they do want to grow and are thinking about how they can do so if only there was a way that made economic sense. It’s sort of like the old adage about which came first, the chicken or the egg.

So the answer lies in doing something that substantially reduces business risk and offers an economic deal like we’ve never seen before and likely will never see again. It has to be that good. There are tens of thousands of businesses out there that are thinking about expansion. Many see opportunities where they could sell more, but are afraid to take the risk right now.

Businesses need something huge to get them off the dime—and really big, targeted business tax credits will do that. If the risk of hiring a new employee and purchasing more equipment is reduced enough, it creates a deal that’s just too good to pass up. They will want to take advantage of this deal, especially since it only last for one year. It’s now or never to take advantage of one of the best small business deals of all time.

Targeted Tax Credit Details:

Businesses with 2010 gross sales under $2 million

50% tax credit on all payroll and payroll taxes paid on new hires who come from the unemployed during 2011 only. This is huge. It’s gigantic. My business is planning on hiring someone near the end of 2011, but if this credit were in place, I’d probably move that up to the second quarter to take advantage of the savings. This would pay for all my hiring and training cost and much more. It’s simply too good to pass up. Hire in 2011 or lose the tax credit.

50% first-year depreciation write-off on equipment purchases in 2011. Large corporations will love this one because this will get small businesses buying a lot of equipment from them. They will also have to hire more people to meet the demand. Once again, it’s only good for a year. Buy in 2011 or lose the write off.

Businesses with 2010 gross sales under $10 million

40% tax credit on all payroll and payroll taxes paid on new hires from the unemployed during the year 2011 only.

40% first-year depreciation write-off on equipment purchases in 2011.

Businesses with 2010 gross sales under $25 million

30% tax credit on all payroll and payroll taxes paid on new hires from the unemployed during the year 2011 only.

30% first-year depreciation write-off on equipment purchases in 2011.

Large Businesses and Job Growth

1. Large Businesses

10% tax credit on all payroll and payroll taxes for new hires only from the unemployed during the year 2011. A 25% tax credit if they hire someone who has been out of work for at least two years.

While large business don’t need any tax credits and have the cash to hire, the problem right now is that they are mostly hiring people who are already employed. So the little hiring from larger corporations that is occurring is not promoting job growth or economic recovery. While this tax credit is much lower, it is enough to get big companies interested because of the number of people they hire. These dollars add up fast. They are generally extremely focused on saving money and if they can get a small tax credit for hiring unemployed people instead of the already employed, it will cause them to shift their hiring practices in 2011 dramatically. If they can only get this incentive in 2011, they will hire more than they normally would to take advantage of the credit.

Large corporations have been very short sighted in their hiring practices during this recession. They have become a part of the problem instead of a part of the solution. To maximize job growth and economic recovery, it’s the unemployed who need to be hired, not those who already have a job. It might be nice if every large corporation voluntarily reported what percentage of their total hires each month came from the unemployed and how long they had been unemployed.

The special 25% tax credit to motivate larger companies to hire people who have been out of work for at least two years could really make a difference. This is not a normal recession. It’s not just that the unemployment rate has stayed stubbornly high for a long time. It’s that there are too many people who have been out of work for years. They really need jobs and they need those jobs now. To hire someone who is already employed over these people is disgraceful. Large corporations need to be doing their part to improve the economy and this is one of the best things they could do.

The key to this is the size of the tax credits and write offs and they are only available for one year. There should be no extensions on this for any reason. It ends December 31, 2011. Use or lose it by then.

The high tax credits for small businesses benefit large businesses. When people are put back to work that gets more money circulating in the economy, which increases demand for goods and services. Large corporation sales will rise. A large percentage of equipment purchases by small businesses will be from large corporations further increasing their sales. All of that will cause large corporations to start hiring more too. If the large corporations hire more people from the unemployed, that further drops the unemployment rate.

If congress and the executive branch tweak this recommendation at all, I will not support it and recommend against its passage. It’s time to leave the party ideologies and lobbying effects aside and finally do something that will work. Pragmatism trumps ideology.

2. Small Businesses

Small Businesses Need Help

In addition to the ideas above, large businesses need to dut prices on their products and services to small businesses by 25% to 50%. The tax credits and write-offs are only part of the entire solution. These do substantially reduce risk and create an attractive savings, but considering how scared small businesses are right now, they need even more of a break to really get them cranking and growing. I realize that no large corporation wants to cut into its profits. I personally believe the shareholders will understand and support this action. It’s the right thing to do.

This economy is not responding as previous economies have responded. This is the recession that just keeps on going and going (even though we’ve been told that technically the recession is over). There may be more here than just an economic contraction—it is entirely possible we are in the middle of an economic restructuring.

The more financial breaks small businesses can get right now, the more likely they are to hire and invest for growth. That gets more money flowing in the economy, which lifts all economic activity. At the same time, it gets people back to work and off of unemployment.

Why should large businesses help small businesses? Because large businesses know that small business is the economic engine that can lift the economy. Large businesses can, for the most part, only respond to what is already happening or take away sales from a competitor. In this economy, their activity will not break us out of the economic log jam we are in. This discount can prime the economic pump which will accelerate large business growth. It’s a win-win situation. It’s also time for small businesses get a break, and not just the businesses that can buy at the highest volume levels.

I recently approached a firm that specializes in generating sales leads about using their services for my consulting practice. We could easily increase their hiring by over 500% within two years. That’s the type of hiring growth the economy needs. But this firm, whose services tend to be used by businesses much larger than mine, refused to drop their prices or minimum purchase level for me even after I had explained my size level, cash dilemma, and ability to help the economy. Their decision was very short sighted. They admitted to me their sales are down, but seem to be unwilling to do something that could get the economy moving.

If I was the CEO of a large corporation selling in the business to business market today, I would create a special program just for small businesses with a pricing structure lower than any of my other customers paid. This is what all large corporations should do right now this month. If they did, they would be amazed at the economic activity it would create.

3. All Americans and Outsourcing

Outsourcing

Everyone in the United States must demand that large corporations make a written commitment by a specific date to bring overseas jobs back to America and hold them to it.

The issue of outsourcing has been talked about for decades. While there has been a small group of Americans who have been very vocal about this, most Americans have never lifted a finger to do anything about it. This is not about buying American because many of the products that Americans want are made overseas. Asking Americans to buy something they don’t want will not go very far and most of the jobs that went overseas are for things that are not done in America much anymore.

So what would it take to get large corporations to bring their call centers and manufacturing jobs back to America? They are not going to do this on their own just because I suggested it. Americans do not understand the economic power they have, which is one of the reasons they hardly ever use it. If they really knew what they were capable of, a lot of things could change and change fast.

Corporations do everything based on what their customers actually demand and what keeps their cost low. The jobs went overseas to lower their cost so they could offer better prices. Americans like low prices, so they were willing to accept all these goods and services from overseas without putting up a fight. But with today’s advanced manufacturing and technology processes, facilities can be built in America that would be so productive there would be little change in prices especially when companies don’t have to pay shipping and import taxes on those goods anymore.

The truth is that if a corporation knew it was going to lose a significant number of customers unless it brought jobs back to the US, it would make the change. No corporation can afford to lose a large portion of their customers. That would be business suicide. But, up until now, they haven’t lost customers or faced a legitimate threat of losing many customers due to shipping jobs overseas.

Americans can change this anytime they want. Now would be a pretty good time. There is one and only one thing everyone needs to know about corporations. It’s all about the numbers. They count. Everything they do comes from adding up the numbers. If only 10,000 or 50,000 or 1,000,000 out of 350,000,000 Americans tell a corporation they will stop buying from them unless they change a business practice, the corporation will shrug it off. Those numbers are just way too low to matter. And the corporation will discount these numbers because they know a certain percentage of those individuals are probably bluffing.

It takes numbers much, much larger than that to move corporate America to change something as entrenched as outsourcing. We are talking about 50,000,000 or 100,000,000 or 150,000,000 Americans all demanding the same thing at the same time and not bluffing about it.

If 50,000,000 people wrote letters to the CEOs of every major bank, credit card, computer company, airline, and hotel company to bring all their customer service and technical support call centers back to America by a certain date or they will switch to another company, you would see something happen. This will work if nobody bluffs. If a commitment letter signed by the CEO and Board is not forthcoming by X date, they all have to stop buying or using that company. Period. When this happens to just one company, all their competitors will immediately make the commitment.

If 100,000,000 people write to the CEO of Wal-Mart, Target, Kmart, Macy’s, Gap, and a few more that they want all of their clothes and shoes to be made in America or they will shop elsewhere, it will happen if they are not bluffing. That means if Wal-Mart does not produce a commitment letter signed by the CEO and Board by a certain date, everyone has to stop buying their clothes and shoes from Wal-Mart until they do. It’s just that simple. Huge numbers and decisive action. When enough Americans walk the talk, they can change anything corporate America does.

The problem is that most Americans don’t think their voice or their single action makes a difference. It is an act of faith to write the letter without knowing that 100,000,000 other Americans may write that letter too. But these are the type of numbers it will take to get companies to bring the jobs back to America. The kinds of jobs that would come home include customer service and technical support call centers; computer and computer component manufacturing; cell phone, smart phone, iPods and other electronic device manufacturing; clothing and shoe manufacturing.

We can stop there. If we bring those back, that would represent several million jobs. It might be nice if these returning jobs are placed in the communities that need them the most instead of the states that offer the best incentives.

This is a three-step pragmatic plan that is guaranteed to drive economic recovery and sustain that recovery over the long term. Our government can’t solve problems of this size. They can’t even come close. Sorry, all you politicians running for office with job creation and economic boosting promises you can’t keep. But the government can do some things that will help as long as all businesses and Americans do their part too. It takes everyone working together to right an economy that’s gone wrong. Let’s all pitch in and show we can get the job done.

How Salespeople Can Drive Economic Recovery

If salespeople could all start selling more, it would create more jobs because it would increase the need to produce more goods and deliver services. Is that possible? Based on our 30 years of our studying prospects and salespeople the answer is a big yes. Every sales force in America could boost their sales by at least 10% over what they are budgeting for 2012. We have conducted a research study about why people buy and how this can help even experienced salespeople boost their sales.

Eleven Essential Steps To Turn Sales Training Into Long-Term Sales Increases

Preparing The Sales Budget

Right now sales executives are either getting ready to negotiate their sales budgets and goals for next year or they’ve already been set. Either way, you are now faced with the big question: how are you going to get your sales people to deliver those numbers in this economy and is there any way to actually beat those numbers? Further, is there a way to move past the quarterly quota push and wow top management, the board, and shareholders with an ever rising, sustainable increase in sales that can carry into 2013, 2014, and beyond?

Many sales executives are probably making list of all the tools, tactics, and strategies that have worked in the past, trying to figure out which ones might make the difference this time. Maybe more sales training or a new type of sales training will help. Or a new sales contest. Possibly ramping up field coaching could do the trick. Some will simply focus on raising activity quotas like cold calls or some new fangled sales report. The list goes on and on. Trouble is that these tools usually result in short-term sales bursts often followed by performance returning to where it was before. To break out of this cycle, you have to manage everything you and your sales people do as one integrated sales management system.

Consider these sobering facts. A survey of 10,000 prospects after they made a purchase decision (win/loss analysis) showed that prospects only tell salespeople the truth about why they lost the sale 40% of the time. That means for 60% of the sales your firm has lost, you and your salespeople don’t know why you really lost those sales. Add to that recent surveys of buyers that show they are saying no to salespeople primarily because the salesperson didn’t understand their needs well enough, didn’t focus enough on their issues, and were not prepared to talk in depth about their firm’s issues in a presentation. These were salespeople from Fortune 500 corporations who are very well trained.

First Concepts has studied sales why people buy for 30 years. Even experienced and trained salespeople can use this knowledge to increase their sales.

Effective Sales Management Systems and Championship Sports Teams

You can think about your sales management system like a professional sports team. Notice that each team has the same number of players. Those players have been carefully selected to represent the best talent in that sport. There are coaches and trainers for every specific task and skill required by each player on the team. They use measurements of each player’s performance that, through statistics and observations, go much farther than most businesses measures their sales people.

Yet not all teams perform the same. Some consistently perform better than others. Certain coaches can take over a mediocre team and turn it into a championship force then go to another team and do the same thing. Through all this, the other teams that have all the same talent and support don’t seem to be able to get the whole thing to come together and perform at a peak level. On paper, some of these teams have every part and piece necessary to win. But on the field, their system does not function well enough.

Think of Your Sales Management System Like a Sports Team

In championship teams, the sum of all the parts and pieces of that team is greater than the whole. For the other teams, the sum of all their parts and pieces is less than the whole. The difference is in how well the head coach and manager work the team as a complex and integrated system so that every part and piece supports and enhances every other. Together, all those parts and pieces add up to something much greater than any single player or support element.

Without Treating Sales Management As A System Too Many Sales Are Lost

Unfortunately, in the vast majority of sales management systems, the parts and pieces that make up all that sales management does do not equal the whole output. They actually produce far less than the potential sales that system could deliver because those parts and pieces are not working like a system at all. Instead, most actions are treated like a separate island under the notion that somehow doing all these individual activities will cause the sales force to keep selling more. Lots of activity does not make a system function as a system. It just wastes a lot of time and effort, produces huge inefficiencies and lowers productivity.

Too many companies are leaving 20%, 30%, and even 40% of potential sales on the table instead of the income statement. And yet, as the end of each quarter approaches, sales management runs around like a chicken with its head cut off, pushing everyone to meet and beat their quota.

If we added up all the time sales management spends just pushing for the quarterly quota, it would probably add up to 25% of management’s time during the year and maybe even more in some cases. Just think about that. 25% of your time spent on a short-term sales push that does nothing to pour a stronger foundation for lasting sales increases that could blow away your typical quarterly results. Pushing for the quarterly quota is just one of many activities that is a part and piece of the sales management system, which is not run like a system at all.

So do you want to continue carrying water uphill by pushing, pushing, pushing to meet those quotas and maybe squeak past them? Or do you want to start acting like a championship sports team and run the sales function as an integrated system where every single thing you do supports and enhances everything else you and your sales people do?

Eleven-Step Sales Management System To Deliver Effective Sales Force Training

A real world example may help clarify what it means to manage everything as a system. If you want to improve how well sales people sell, they need some type of training that involves skills, techniques, and knowledge that should be tailored to the specific sales force’s needs. Training does not exist in a vacuum. It must be implemented as part of an integrated sales management effort for a long enough period of time to be effective.

This means sales people have been conditioned to apply close to 100% of what they were trained to do with every prospect on every call, every day. Total retention and reinforcement of what a training program covered is the measure of whether the training is successful, but 99% of all sales training currently being delivered fails to come anywhere close to that standard. So what is all that sales training money going for? Short term sales burst? Sales people picking up a few techniques to put in their toolbox? The only way to produce a high return on investment (money, time, and effort) is to manage everything you do as a system.

Here are the minimum sales management elements that must be integrated together for a company to come anywhere close to condition 100% of their sales people to apply 100% of the training:

1.  Customized Training. Any training offered must be specific to your company’s products or services, your industry, your prospective customers’ needs, and your selling methodology. Additionally, it should address weaknesses that have been identified in your specific sales force. Is your training an isolated event or is it integrated into your sales management system? Generic training can’t raise all your sales people’s performance consistently and build a foundation to sustain those increases.

Further, does your training teach your salespeople how prospects and customers actually think out a decision to buy? Do they know what really affects them? Do they know what turns them off? Do they know how prospects figure out their perceptions of value which affect their level of price resistance? There is new information about how people think out their decisions and what affects them during the sales process your salespeople need to know if they are going to consistently win against the competition.

2.  Follow Up Training. Multiple training sessions on the same subject matter provides sales people with clarification of those parts of the training that are fuzzy or not working for them in the field. Usually, there needs to be at least two follow up training programs to provide sufficient clarification and review. These programs also tell the sales people that what was covered in the original training is important. It helps reinforce the message that they do need to learn this and apply it.

3. Communications and Coaching. Daily communications and regular field coaching by management needs to emphasize what was covered in the training. Every phone conversation, email and in-person contact with sales people must reinforce the training. This often involves asking sales people questions about what is going on with their most recent sales calls where the answers require knowledge and application of the training. When sales people know this is what their sales manager is going to ask them about, they will make sure they are up to speed the next time they talk.

Coaching also delivers in-the-field training to further clarify what they learned and see how to apply it with real prospects. Finally, coaching provides immediate feedback on how well they are applying the training and goals for what they need to improve at. There is no way to condition sales people to apply training without this level of management involvement.

4.  Measurement. There must be a way of measuring sales activity and results that can be tied to what was trained. Measurement tells sales people the training is important and connects their clarity at applying the training to feedback about how well they are doing.

5.   Sales Meetings. Every sales meeting must have time allocated to discuss how the training is being applied. It is important for sales people to have an opportunity to talk about their experiences, hear success stories from other sales people, and identify areas that have proved challenging. Sales management needs to listen carefully so they can provide the necessary additional training and clarification that will move sales people toward conditioned application.

6.  CRM and Reports. Elements of the training should be built into the CRM and other technology solutions as well as sales reports.

7.  Evaluation. Sales people should be surveyed about their experiences applying the training so common issues can be identified and presented in follow-up training. This will also help improve future training.

8.  Compensation. Sales people must see a strong connection between their compensation and their own efforts. If their sales go up as a result of applying the training, their compensation should rise as well. This direct connection between their actions and their pay is a critical element in the feedback loop that reinforces the training.

9.   Sales Contest. A sales contest that is connected to new measurements tied to the training further reinforces the importance of applying what was learned by introducing competition and excitement. Sales contests that are not connected to any management initiatives have little long-term impact. Contests should always be seen as one part of an integrated effort to raise sales performance.

10. Cascading Reinforcement. It’s not just the sales people that need reinforcement. For sales management to consistently and frequently reinforce the sales force, management needs their actions reinforced as well. Someone needs to be reminding them to do all these reinforcement tasks, clarify how to do these tasks, address issues that come up, handle frustrations, and provide feedback. Otherwise, management will get side tracked by the next quarterly quota push and stop their reinforcement activities.

Sales management, by its very nature, tends to focus on tactical short-term activities instead of strategic long term initiatives. Sales management teams need frequent reinforcement to counter this tendency. This is called “cascading reinforcement” meaning that each level in an organization needs to reinforce the next level. That’s the difference between an organization functioning as a system versus a group of unconnected parts and pieces. Yes, even the Vice President of Sales needs reinforcement.

11. Time. This entire process using all these elements needs to continue for many months, usually six months at a minimum, to lay a strong foundation. Then it needs to continue with more reinforcement along with additional training. Any company that can stick with a systems approach to training for at least a year will probably beat their annual sales budget by a wide margin. Turning training into conditioned behaviors in the field takes time. It takes time to clarify everything so sales people have no gaps in understanding every part of the training and how to apply it with prospects. It takes time to repeat behaviors after the task are ultra clear before they become habits. And once they are habits, they still need constant reinforcement to remain habits.

These eleven sales management elements are only a minimum. In some cases, more will need to be built into the system. In other cases, issues that frustrate sales people or things that create a lack of clarity about their job need to be addressed so these don’t work against the training. For example, if sales people are complaining about the poor quality of leads or their territory has not been focused in a useful way, they are not going to be motivated to learn new selling approaches.

When the sales force’s job is clear and they see a connection between their effort and results, they will be highly motivated to learn and apply something new because they can see how the training will help them to sell even more. When sales people lack task clarity, any effort to boost sales will be short lived.

Notice that each of the eleven elements is not treated as a separate, unrelated task or support piece. Each one is linked to the training and they are all tied together so you have multiple ways that you are reinforcing the training. Feedback, measurement, and compensation are included in the elements as well as several different ways to clarify the training. This sends a clear and constant message to the sales force that they are expected to apply this training and the company will help them any way needed to make this happen.

This is just one example of a systems thinking approach to managing your sales force. In truth, everything sales management does needs to be integrated into a system so that each element and task enhance and support all the others. When you manage your sales force as a system, the sum of all the parts will be greater than the whole and that’s when your sales go through the roof.

Questions?

Schedule a phone conversation with Don Shapiro, President of First Concepts Consultants, Inc., to answer your questions and explore how your sales force could boost it’s long term performance above existing forecast.

__________________________________________________________

First Concepts Sales Training and Reinforcement System can increase sales above forecast within six months.

To increase your rate of growth and market share, consider a 360 degree comprehensive revenue investigation.

__________________________________________________________

Postscript: Applying Systems Thinking To Organization Success

This article was based on applying systems thinking or general systems theory to business. Don Shapiro has been studying systems thinking along with other major thinking processes since the 1970’s. This led First Concepts Consultants to follow a core philosophy that knowledge and experience are not enough to produce the best results, solutions and analysis of options. Thinking processes can identify opportunities and methods of execution that go beyond what industry veterans typically find. Thinking processes have been woven into First Concepts way of doing business since its founding and reflect the key to how it helps clients increase pretax profits and ROI. You can learn more about these thinking processes by reading the article It’s All About Thinking.

As the November election looms, we are faced with a nonstop barrage of commentary about the economy. Of course, the economy is on the top of everyone’s mind so that has put it on the top of politician’s campaign messages. Those trying to unseat an incumbent blast them because the economy has not been fixed or even blame them for the recession. Incumbents claim their programs prevented the economy from getting worse. House Republican leader John Boehner called on President Obama to fire his economic advisors because they have failed to turn the economy around. And so it goes.

A Political Tug Of War For Nothing

There is only one tiny problem with all this political rhetoric. They’re basically wrong. This recession was not caused by anything done by the government in any administration or session of congress whether current or past. And the numbers wouldn’t be any better today even if the other party had been in control. The government didn’t cause the problem and they can’t do a whole lot to solve it.

Any politician that says their approach would be better just doesn’t understand how little the government has to do with economic events like this. The purpose of this article is to explore what caused the recession and what might prevent another one like this. For ideas on how to jump start the economy, please read the article “3 Steps To Boost Jobs And The Economy“.

After tracking all the unfolding events from the moment this economic catastrophe started, I’ve pinpointed what got us into this mess. It turns out thousands of bright, well educated, experienced business people all made the same assumptions at the same time. This reminds me of the story “The Emperors New Clothes” where an entire country believes an assumption to be true when it is clearly false. Until a little boy stands up and questions the assumption. Unfortunately for our economy, the little boy didn’t speak up fast enough and even then, everyone else ignored him.

So what are the assumptions that tanked our economy, who made these assumptions, and how can we prevent others like them from doing it again?

Assumption #1: Real estate prices will always go up

If only the general public believed this, we would never have gotten into this mess. The average person can’t be expected to understand real estate cycles or know when to question trend lines. Even if they saw prices going up and wanted to buy real estate, they wouldn’t have been able to if those in the mortgage and finance industry had avoided this assumption and followed their own lending standards.

Real estate prices since 1970

We got into this mess primarily because of this assumption. And those who could have stopped the problem before it got out of hand bought it hook, line and sinker. Real estate goes in cycles with prices moving up and down. Those cycles have been tracked and reported for decades.  Over all those decades, the pattern was fairly consistent concerning the peaks and troughs. Anyone who had worked for any length of time in the real estate, mortgage, banking, and finance industry knew this.

When real estate demand started forcing prices up higher than the normal trend line, questions should have been raised by thousands of these experts. Why is the cycle not acting as it normally does? Where is this excessive demand coming from? How are so many people getting access to so much mortgage money that they can push up prices like this? What has changed compared to all the previous real estate cycles?

These are fairly basic questions anyone should be asking when a trend breaks out of its normal pattern. On Wall Street, the moment the averages don’t do what they are supposed to do, a million questions are raised and all kinds of analysis follows. But that didn’t happen amongst those lending the money, those handling these real estate transactions and even those on Wall Street who created, rated and insured the financial packages that provided all this extra mortgage money.

The banking and mortgage industry needs to be singled out here. Obviously, they are in the business of making loans because that’s how they make money. As demand rapidly increased for mortgages, they saw the opportunity to make lots and lots of money. And, because of this assumption, they convinced themselves they couldn’t lose even if they dropped their lending standards.

I know what they were telling themselves. “We’re going to make a profit when we make the loan. If the borrower later defaults, we just take the property back and sell it at an even higher price so we make even more money (because real estate prices always rise).” They assumed that rising real estate prices would protect them against anyone who defaulted on their easy money loans. This is akin to believing in the existence of a perpetual money making machine.

Think about all the people who make up this industry especially those in management. Many of them had twenty to thirty years of experience in the industry. They had been through several real estate cycles. They all knew that when real estate prices rise they later come down. Then there are thousands of MBA’s from Harvard, Wharton, Stanford, Anderson and all the rest that fill the ranks of these institutions.

How is it possible that amongst tens of thousands of bright, experienced, educated people in the banking and mortgage industries none of them bothered to question this assumption and inquire about why the real estate market suddenly broke out of its historic pattern? Did all of them see nothing alarming in dropping their lending standards so low? Did none of them feel uneasy that lending volume in dollars was the highest in history and rising at an unprecedented rate? Did they all believe that the economy had magically restructured itself in a new way to support massive lending and real estate price increases with no downside?

Assumption #2: Mortgage Lenders always follow sound, stable, conservative lending practices

Assumption # 3: Anything secured by real property is always safe.

For the banking and mortgage industry to offer mortgages with their new loosey-goosey lending standards, they needed access to more money to lend…a lot more money. The money had to come from somewhere to fuel this insatiable demand for easy mortgages. Wall Street came to their rescue by creating some new types of mortgage backed securities. The creation of these securities alone would not have created a problem.

Security credit ratings you can trust...not!

The real culprits are firms who rated these securities such as Moody’s and Standard & Poors and the insurance companies who backed them such as AGC. Moody’s and S&P are supposed to be our last line of defense. They are the fail safe component in our economic system. Even if greed blinds everyone else, they are supposed to do their due diligence about the risk level of every security. We trust their ratings. We invest our life savings based on their ratings.

But instead of thoroughly checking out the quality of the real estate loans that these securities were funding, the smart, well educated people at Moody’s and S & P assumed that mortgage lenders always follow sound, stable, conservative lending practices. They also assumed that sense these loans were secured by real property, they had to be safe. And that’s how they rated them. So investors bought up these mortgage backed securities based on the ratings and AGC gladly provided the insurance.

It was a house of dominos built on a few assumptions. A house of dominos that came tumbling down, sent us into the longest economic downturn since the great depression and can only be fixed by the marketplace cleaning out the debris which tanked millions of people’s jobs and retirement. Until the marketplace cleans out all the bad loans, overpriced real estate, excess real estate inventory, risky securities and everything else that was created by these assumptions, the economy can’t right itself and start chugging along again.

Neither stimulus by the Democrats nor tax and regulatory cuts by the Republicans address what caused this to occur. The marketplace has to clean up its own mess. While businesses always talk about wanting lower taxes and less regulation, the truth is that as long as a business can increase its net profits, it will do so even if it has to pay higher taxes. That’s because even if you apply a higher tax rate to profits, you are still left with more money after taxes than you were before you invested in the expansion. This is what economist don’t understand about how real business decisions are made.

How Can We Prevent This From Happening Again?

Which leaves us with the question…how can we prevent this from happening again? A free market will always experience economic cycles of expansion and contraction. We have gone through many recessions during the last few decades that were caused by normal forces. So no, we can’t prevent recessions. But what happened here was not caused by normal economic forces and the downturn that resulted has turned out to be anything but normal.

This entire economic nightmare was caused by bad thinking, or rather, the absence of critical thinking. What burns me up is that this lapse in critical thinking occurred on the part of tens of thousands of experienced business people and MBA’s. How could this many bright, experienced, well educated people all make the same disastrous assumptions….assumptions that defy common sense and economic history. Just what are they teaching in all these MBA programs that their bright students can go out into the business world and all fail to question what is going on when the trend lines first get out of whack? I know the case studies they use teach them to identify issues just like this so why can’t they apply what they learn in the real world? How can so many experienced bankers and mortgage lenders all have a sudden lapse of memory about what happens to real estate prices? How is it possible for Moody’s and S&P to rate a security without doing their due diligence?

What did all those MBA's learn?

As I have been telling my clients for over 25 years, “it’s all about thinking” which is also the title of one of my Insights Into Success articles. Believe me, if everyone had been religiously following the thinking processes mentioned in that article, this recession wouldn’t have happened. While this recession was caused by the banking and finance industry, the next brain lapse could come from an entirely different industry. Recessions are all about the flow of money. Any large industry that can affect the flow of money throughout large portions of our society have the potential to tank the economy (did I just hear someone yell out Internet???).

So what’s my professional recommendation to prevent this type of brain lapse in the future? We need to put every executive, manager and technical staff expert in every industry in America through an intensive refresher course in critical thinking. That’s right. Everyone including Chairman of the Boards and CEO’s all need to be taught critical thinking. We can’t assume that they are excellent critical thinkers because of their job titles and responsibility. We already made that assumption once and look where it got us. Avoiding assumptions is the only thing that will prevent another one.

Salespeople Can Help Our Economy

If all the salespeople in America started selling more, we could boost the economy because of the increased demand for goods and services. Is this possible. Virtually every sales force in America could increase its sales by at least 10% above its 2012 budget if it wanted to. We’ve been studying salespeople and why people buy for thirty years by observing salespeople during their calls. Learn more about the conclusions of our research study on why people buy, why top sales producers sell more and how salespeople can use this knowledge to increase their sales.

Don Shapiro Quotes

PERMISSIONS You have permission to copy and use any of these quotes for non-commercial purposes as long as you give full credit to Don Shapiro, President of First Concepts Consultants, Inc. along with a link to this website www.firstconcepts.com. If you want to use any of these quotes in a something that will be offered for sale such as a book, cd, video, t-shirt, website subscription or anything else, you must get permission from the author and formal licensing will be required.

Copyright 2011 Don Shapiro and First Concepts Consultants, Inc. All rights reserved.

Leadership

Leaders lead from the heart first. Are you a heart smart Leader?

For there to be a great tomorrow, there must be great leaders today.

Lead into the light, not out of the darkness.

Every employee needs to lead some of the time and everyone with a title needs to lead all of the time.

Every employee needs leadership development, not just the anointed ones.

A true leader always has their peoples’ back no matter what.

Great leaders know the purpose is primary.

Managers hold onto the past. Leaders take us into the future.

What distinguishes a great leader from others is the quality of their choices.

A leader leads us toward something new and away from what once was.

A leader attracts people to their vision and inspires them to make it happen.

A leader stands on a bedrock of principles to stand up, stand tall and stand strong.

True leaders help others to be the best they can be.

Leadership isn’t about one’s title or authority. It’s about who you are inside.

Leaders have the courage & conviction to make a choice that inspires others to follow.

Managers keep it going. Leaders change it for the better.

Great leaders inspire people from all walks of lives. They never play favorites.

Go with your strengths and delegate your weaknesses.

Great leadership starts with the courage to do the right thing.

Leaders combine the best in each of us together to create a team that gets the job done.

Today’s youth are tomorrow’s leaders. A better tomorrow starts by inspiring them to lead.

Leaders teach & teachers lead. Encouraging & inspiring others begins with education.

You can never go wrong doing the right thing because the right thing is always right.

Top quality starts with great leadership. It’s people who make products & serve customers.

What you do counts more than what you say you do.

Sales

The most successful salespeople excel at asking good questions then listen closely to the answers.

Wouldn’t it be better if salespeople were simply guided by the way the customer thinks out a buying decision?

The salesperson’s real role is to guide prospects through the prospects way of thinking out a buying decision.

If you sell the customer the way the customer buys, you have the highest likelihood of making the sale.

When the cost of the customer’s problem is greater than the cost of the solution, they will gladly pay the price.

Marketing

Marketing is about relationships, not numbers. Connect, engage, listen & bond.

We’re all a brand. Your image in other’s eyes is caste by the sum of everything you do and say.

Prime the prospect about the general nature of what you offer before you position your specific product or service.

A competitive advantage gives you an edge only until your competitors catch up.

Put Your People First

Quality & service are no better than the sum total of all your people.

Put your people first. Your quality & service will follow.

Turn off your employee turnover. Turnover lowers your quality, service, sales and profits.

It’s all about people. Just how good would your sales, quality and service be if no one showed up for work tomorrow?

Inspiration & Success

Don’t let the experiences of the past limit your vision for the future.

We are the light at the end of the tunnel.

The rhythm of the universe flows through us & connects us all. If you listen closely, you can hear its beat.

There is always a light & a path to a better tomorrow if we see with an open heart.

A successful life looks like thousands of No’s sprinkled with some Yes’s.

When what we do IS who we are, we can tap our full potential.

Walk to the beat of your own drum. Embrace the wonder that is you.

Allow the wonder of you to transform & uplift those around you.

Every goal can be achieved…it’s only the time frame we can’t control.

Dream the big dream. Your future is only limited by the size of your thoughts.

Don’t be frozen by fear. Be fired up by the opportunity to do the extraordinary.

Take flight into the light…let faith help you scale the heights.

Focus is first in all success. If you’re bouncing off the walls, it’s tough to stick to anything.

It’s not any one thing you do that makes the difference. It’s everything you do that makes the difference.

The creator gave us unlimited potential. Don’t let what others say stop you from becoming all you can be.

If you want to truly succeed, hard work is not an unrealistic approach…its reality.

We are change. We are transformation. We are the future.

Through growing awareness you ascend a staircase of ever increasing potential & access to all you can be.

Once we give up the need for things to happen by a certain time, the universe guides us along the way.

When we travel a wise path, we lift everyone else up with us.

Once you change your perspective, you can change your reality.

Real life is not graded on a curve. You either get the job done or you don’t.

Doing good for others does good for ourselves.

What We Have In Common

Focus on what we have in common instead of our differences so we can build a world based on mutual respect.

We are all connected regardless of our beliefs, culture or background.

Embrace the power of what we have in common to create something better for all of us.

When we combine our unique talents, we create the greatest orchestra on earth. Imagine what we can accomplish together.

Change, Systems and How Everything is Connected

Everything affects everything. Change one choice, move one pebble on the beach & you change history.

As we made it so we can change it.

Together we shape the future. Together we create the world we want.

When you change yourself, the world starts changing with you.

This moment you can unleash a thought that will help change the world.

Career Choices

Before you decide if you want to do something, first succeed at doing it.

Consulting is a calling, not a career choice.

Don’t follow in your friends footsteps. We each have our own place in the world.

To find out what you really should be doing first ask yourself what you’d happily do even if you weren’t paid to do it.

Life Is A Fork In The Road (making choices)

We have a choice about how we feel and what we do. What would happen if we all made a positive choice at the same time?

You are the sum of all your choices.

Trust your inner voice to guide you through Life’s forks in the road.

Our single greatest challenge as humans is to learn to trust ourselves.

There’s 6.8 billion people on earth so there’s 6.8 billion answers to how we make our own life better.

No one knows better than you what’s best for you. You are the expert on you.

We can’t live someone else’s life or by someone else’s advice.

Listen to the pattern of your inner voice over time. A repeating pattern IS the message you need to trust.

Everything we experience offers kernels of wisdom to guide our journey through life.

Our journey through life is about one fork after another. Add up your choices and that’s your life.

The inner voice of wisdom is not our ego, desires or emotions that may lead us to selfish choices. It’s a message of wisdom that considers the best interest of both us & our loved ones.

Expand your awareness so you can see through new windows and find new forks to consider.

A “den of chatter” buzzes inside us battling against our true inner voice of wisdom.

We’re a miracle born without an instruction manual.

Life is a journey, not a destination. It’s not where we arrive that counts but how we live every moment along the way.

Let your true inner voice give you the courage to pursue your purpose and be all you can be.

Life is learning to trust the soft whisper deep inside us that hides between our breaths.

No matter what life throws at us others have been there before us.

Life is a test of faith.

There is something good, something beneficial, something helpful in the midst of every calamity.

Wouldn’t the road we travel be better with fewer forks & knives & more spoons?

When you come to a fork in the road sometimes the best thing to do is stop & have a picnic.

Accountability & Responsibility

Either you’re helping to fix the problem or you’re a part of the problem

If you’re blaming “they” for your troubles start looking in the mirror.

Life is about us not I. Every choice you make affects someone else.

Communications

Words have no meaning. The meaning of words is inside people not the dictionary.

Listen from the heart so you can understand what people are really saying.

Planning

A plan is a guide, not a route. When the unexpected happens, a plan helps you figure out which fork to take next.

Time is one of the greatest tools in planning. The human mind works in its own mysterious ways according to its own time clock.

You can’t create the best plans only in a planning session or with a deadline because that fails to account for how the human mind really works.

Creativity

Creativity starts by overloading yourself with information then stepping back to let your subconscious start generating new ideas.

Great achievement starts with a fresh concept, a bold idea that explains something in an innovative way.

Imagine if we hold onto the innocence of a child while retaining the wisdom of our experience.

Thinking & Problem Solving

The first step to solve any problem begins when you really want to solve the problem.

Standards

The rise or fall of any society can be measured by the height of its standards.

Strategic Thinking

Act strategically. What are the consequences of your choices now, next year & ten years from now?

Customer Satisfaction and Service

Customers don’t care about your policies, systems, technology or other limitations…they only care about what will make their world easier and better.

Times passes slower to the customer than those serving the customer.

Words don’t mean the same thing to the customer as those serving the customer.

Learning & Growing

Awareness unlocks our potential. As our awareness grows so we grow.

It is through exposure to the diversity in people’s beliefs & culture that we discover the best in ourselves.

Don’t put people in a box with a label whether political, social or personal. Allow everyone to be all they can be.

We learn by taking action, by experiencing the consequence of our choices.

You can’t grow & improve sitting on the sidelines watching others do what you really wanted to do.

Life is a learning state. To live longer, keep growing, learning & changing.

Motivating People

People need a good reason why before they are motivated to do anything

If you want your people to do anything start by doing it yourself.

We’re motivated to do what we know we can do well & avoid that which we know we’ll do poorly.

When you join passion & purpose together, you create a force that can’t be stopped.

People are looking for something to believe in that’s bigger than themselves.

When you help your employees find a higher purpose to their efforts, you get a highly motivated and productive worker in return.

Positive Thinking

Positive thinking is not enough. You must believe without any doubt down to the fabric of your soul to turn your visions into reality.

Imagine if one billion people all focused on the same positive thought at the same time. Just imagine.

If you believe without doubt down to the fabric of your soul, you have woven your future reality.

How we conduct ourselves & Politics

Acting in a respectful, courteous & civil manner to everyone is the glue that holds civilization together.

It is NEVER okay to attack a person personally simply because you don’t agree with their point of view.

The future of our country is more threatened by trashing people we disagree with than bad legislation.

If we’re nice to everyone we meet they might be nice to everyone they meet & then what would the world be like?

Relationships (both personal and professional)

Trust is the currency of relationships.

We have to know who we are first before we can be there for others.

When we are at our best, we can be there for others.

Love

Love is unconditional. If there are any conditions, it isn’t love.

Buyer and Seller Agree

What I discovered about selling in 1976 so I could pay my mortgage

In 1976, I accepted my first position as a 100% commission salesperson for a bicycle and parts distributor. They put me through the best sales training available at that time which drilled us in the use of features and benefits, objection handling and closing techniques. In addition, I had worked for the company for two years learning everything about the industry, their products and their customers. After hearing shop after shop tell me “we don’t need anything today,” “our regular supplier takes care of us just fine,” “it’s a little slow right now,” and “we’re stocked up,” I started losing sleep worrying about how I was going to pay my mortgage next month.

That lead me to wonder about this selling process I was supposed to follow. Prior to going into the bicycle business, I had been a restaurant manager for several years where hundreds of sales people called on me. Deep down I knew what was going through the minds of the owners and managers I was calling on but the selling process I had been taught didn’t address it. I began to realize there was a big disconnect between the sales approach of that time and the customer.

Out of sheer necessity to find a way to pay my bills, I started deviating from what I had been taught and did what naturally made sense to me…ask these owners and managers about their business instead of trying to sell them anything. Funny thing happened. Once we started having a casual shop talk about their business, they suddenly discovered they had things they needed to buy. The next thing I knew I was writing 10, 12 and 15 line orders from 90% of the shops that had told me they didn’t need anything.

My sales manager advised me to be patient because it could take up to a year for the shops to get to know me so I could start building up my sales volume. Thankfully, I realized that my mortgage lender wouldn’t accept that excuse so I found a better way that resulted in my increasing my territories sales 26% that first month and 125% in the first year. That led me to pay even more attention to what I discovered, continue to experiment with it and understand everything I could about why it worked.

By the time I started First Concepts Consultants in 1985, I had eight years of experience as a salesperson and fourteen years in management and executive positions where over 2000 sales people had called on me. As I performed my role as a decision maker, I also closely observed what was going through my mind as a result of everything these salespeople said. This enabled me to create a simple Roadmap of how our mind moves from no interest and no need to wanting to take action and buy something. That map which I called “The ABC’s Of How People Buy” can help any salesperson align themselves with the prospects own thinking process instead of some prefab selling system.

Of course, this approach involved using new techniques and an entirely different attitude in how one dealt with the prospect. In 1988, major research was released that supported my discoveries and since that time more research has surfaced from prestigious sources such as Harvard University all confirming what I stumbled upon back in 1976.

The Selling Process Versus The Buying Process

Prospects are people who, just like everyone else, have a way of thinking things out that lead them from not wanting or needing anything to making a decision to buy. We all use that same process when we buy anything. It doesn’t matter whether we are more influenced by facts and logic or feelings and emotions for any particular decision. Either way, the thinking process we go through from not interested to where to do I sign involves the same steps.

How the customer thinks out a decision to buy has nothing to do with any selling system or approach. That is an artificially constructed process to give sales people something to follow and help them remember what they are supposed to do. The truth is that all selling approaches are a collection of techniques and methods assembled into some type of organized process. Salespeople do need all those skills, techniques and methods. That’s the good news. The bad news is that they usually are following a guidance system or selling approach that is not flexible enough to keep them aligned with where the customer is at.

Wouldn’t it be easier and more effective if salespeople were simply guided by the way the customer thinks things out? Let the customer’s way of thinking through a decision to buy determine everything the salesperson says and does. The salesperson’s real role is to guide the prospect through their own buying process…lead the prospect along their own journey of discovery from not interested to ready to buy.

The ABC’s Of How People Buy

The ABC’s Of How People Buy defines three buying milestones a prospective customer will make as they move from no to yes. It is the customer’s buying process, not the salesperson’s selling process. This provides an easy to remember guidance system that keeps sales people focused on what is happening inside of their prospects. It gives salespeople specific goals to achieve that are based on the next conclusion the customer needs to make in thinking out their decision to buy. Everyone uses the ABC’s to make a decision to buy. You can find this thinking process in everything you’ve ever bought.

If you sell the customer the way the customer buys, you have the highest likelihood of making the sale. It’s good to know as many steps, techniques and strategies as possible. The ABCs gives the salesperson total flexibility to pick what they need out of their selling “toolbox” when they need it based on where the prospect is at. The ABC’s is a customer based guidance system salespeople follow that enables them to always be in the right place at the right time with the right tool. It aligns the salesperson and the prospect so they are always in the same place.

A = Action Needed

The customer admits there is a serious enough need that they want to do something about it.

B = Best Solution

The customer discovers the best solution to address their needs

C = Cost Justified

The customer finds enough value in what is offered to justify the price.

Each of these three buying milestones occur inside the mind of the prospective customer. They represent major milestones in how a prospect thinks out a decision to buy. Until a prospect arrives at the A= Action Need point in their own mind, they are not ready to think about issues that would be evaluated in the B and C parts of their thinking process. Each milestone must be reached before they can proceed to the next milestone and be 100% attentive to that part of the buying process.

If a salesperson makes their sales presentation or deals with price before the A = Action Needed milestone has been reached, the prospect will shower them with objections and resistance or quietly listen and then dismiss them. These three buying milestones keep salespeople focused on the goal of helping the prospect arrive at each milestone so they can move forward to the next part of the buying process. It can also quickly alert them when they have moved forward too quickly so they can backtrack to what the prospect is thinking about. If carefully followed, it provides a continuous guidance system to keep the salesperson aligned with where the prospect is at in their buying process.

Part II will cover each of the ABC’s in detail along with the typical assumptions salespeople make that lead them to rush forward before the prospective customer is ready.

Learn about the conclusions of the 30 year research study that is behind the ABC’s on why people buy, why top sales producers sell more and how salespeople can use this knowledge to increase their sales.

It gives salespeople specific goals to achieve that are based on the next conclusion the customer needs to make in thinking out their decision to buy. Everyone uses the ABC’s to make a decision to buy. You can find this thinking process in everything you’ve ever bought.

The ABC's Of How People Buy

Each of these three conclusions occurs inside the mind of the prospective customer. They represent major milestones in how a prospect thinks out a decision to buy. Until a prospect arrives at the A= Action Need point in their own mind, they are not ready to think about issues that would be evaluated in the B and C parts of their thinking process. Each milestone must be reached before they can proceed to the next milestone and be 100% attentive to that part of the buying decision process.

First Concepts Consultants has trained sales forces how to integrate this buying decision process into the way they deal with prospects. Those sales forces who fully applied this approach have seen their sales increase by 20% or more. 

A = Action Needed

The customer admits there is a serious enough need that they want to do something about it.

The single biggest shortcoming I have noticed in salespeople happens here. Unless a customer discovers their needs be it problems, issues, lost opportunities or something they want, they have absolutely no reason to buy anything. But simply having needs is not enough reason to justify buying anything as too many salespeople have learned the hard way. The prospect has to recognize that these needs are serious enough…they cost them a lot of money, they create serious problems, they see a wide gap between what they have now versus what they could have…that they feel compelled to seek something better. When a prospect arrives at this conclusion, they want to look for solutions. They want to find a way to address these needs.

Notice that the ABC’s are always phrased in terms of a decision the prospect makes, something the prospect admits to or realizes. That’s because the ABC guidance system focuses on the salesperson helping the prospect come to these decision points which are a natural and normal part of their progression from no interest to making a purchase. Until the prospect admits they have needs that are so serious they want to do something about it, they have no reason to buy and no reason to hear a sales presentation.

The number one mistake salespeople make is rushing into their presentation or talking about what they offer before the customer has arrived at a point where they are ready to start thinking about buying something. Lack of serious customer needs is the single greatest reason people fail to buy, raise objections and offer price resistance.

Happy and content prospects are the ones most salespeople never sell to. Very few understand the A = Action Need step the prospect must go through before they can consider what a salesperson is offering. So they either walk away or push forward into the presentation only to get a big no. Either way they’ve wasted their time and the prospects time. Instead, if a salesperson is guided by the ABC’s, they will engage a prospect in a discussion to help them discover their needs and stay with that until the prospect finally admits they have serious and compelling needs.

Most sales are made because the salesperson happened on a prospect that had already completed the A = Action Need step on their own. They were looking for something to address their needs when the salesperson walked in the door. That creates the false assumption in salespeople that they only have to do the same thing with enough prospects and some will buy. They fail to understand the reasons why the others didn’t buy or how they could have engaged those prospects so some of them would have bought. The ABC’s change selling from a numbers game into a rational process that explains why and when each prospect buys something.

Salespeople make an even greater assumption when they find a prospect who openly complains about their problems and frustrations. The salesperson hears the prospect talking about their needs and assumes that means they are ready to hear a presentation. How many people do you know that complain about things but never want to do anything about it? Often they will end up telling you that is just the way things normally are. They had no intention of spending any money to address their complaints. Some people just like to complain. The key to the A = Action Needed step is that the prospect has to admit they have serious enough needs that they want to do something about it. Until they admit that, they are not ready to hear a presentation.

When guided by the ABC’s, salespeople will always engage prospects in a conversation to help them discover their needs and figure out how bad they are. While some prospects may not actually have any compelling needs today, a salesperson will generally find more prospects who are interested in buying. They can continue to call on the ones who didn’t have a need today patiently waiting until that need develops. Every prospect can be sold. At some point, every prospect will develop needs. It’s just a question of timing as to when their compelling need surfaces.

The ABCs help the salesperson to track where the customer is at in their mind so they can be in the same place. Most sales are lost because the salesperson is doing something that is out of sync with the customer.

B = Best Solution

The customer discovers the best solution to address their needs.

When the salesperson presents their solution, instead of stating generic benefits they now can use the serious needs the prospect admitted in A = Action Needed in their benefit statements. So benefits become customized for each prospect based on their actual needs. These link the prospect’s needs with the solution. A great presentation is simply a salesperson showing how their offer is the solution to the prospects specific needs. Every sales presentation must be customized for each prospect to fully address their buying decision process.

But before that presentation can be made, salespeople need to prepare the customer and avoid a common assumption that can derail their sales effort. The customer is now aware they have a need and want to do something about it. They are now interested in evaluating a variety of different ways to address their need. Some would say the customer is now motivated. The salesperson may assume that the customer wants the type of solution they are offering. That may not be the case.

Once a customer is motivated to address their need, that doesn’t mean they are inclined toward any particular solution. In fact, they may be more interested in something that has nothing to do with what the salesperson is offering.

Before a salesperson can present their company’s offering, they need to help the customer understand why their type of solution is better than other solutions. This must happen before the specifics of the offer can be presented. Salespeople may think that all they need to do is compare their offering against other direct competitors who offer a similar product or service. Often, that is not where the customer is at in thinking out a decision to buy. More likely, the prospect is open to all possibilities including those that have little or nothing to do with a specific company’s solution.

As an example, a customer may discover they have a data storage problem. There are many different ways to solve such a problem. Some may involve buying hardware. Even then, there are many different types of hardware solutions. Or this might make them more interested in outsourcing data storage to a remote provider. Or they may be interested in the possibility of a software solution helping them better utilize their existing hardware. It is not just about which brand of storage device they buy. It is about looking at all the possible ways they could address their storage issue.

So when a salesperson selling data storage hardware gets a customer to the A = Action Needed stage, that customer may not even be thinking about buying more hardware. If the salesperson assumes the customer is ready to consider buying this company’s hardware, they will encounter resistance. That is not where the customer is at in their buying process. The customer is open to all possible solutions at this point and may not want to spend too much time on any one approach until they learn more.

To address the customer buying process, the salesperson first has to help the customer to discover that the type of solution the salesperson offers is the best approach regardless of which company they bought from. Why would the purchase of hardware be better than outsourcing or using a software only solution? Prime the prospect for the specific type of solution before positioning your company’s solution.

Once the customer has decided they want a hardware solution, then it comes down to showing why this company’s solution is better than other direct competitors. So there are two questions that customer needs to answer during the Best Solution phase before they can finally decide that a particular offer is the right one to solve their problem: 1. What type of solution would be best to address their need? (Priming) 2. Why would the salesperson’s offer be better than other similar solutions? (Positioning)

C = Cost Justified

The customer sees enough value in what is offered to justify the price.

Price resistance normally occurs because the customer has not completely gone through A = Action Needed and B = Best Solution. When the cost of the prospects need is greater than the cost of the salesperson’s solution, the prospect will see a good value and decide to buy.

Pricing issues are primarily addressed through the A = Action Needed step of the buying process. If the prospect has not gone through that thinking process completely, they will shut down the sale when it comes time to talk price because what is being offered will appear more costly to them then staying with their current situation. It is through the A = Action Needed stage that the salesperson guides the prospect to discover as many cost or serious needs as possible and help them to build up those cost or lost opportunities. The bigger the need appears, the more costly it is, the more serious it is, the more likely the prospect will see the solution as being less costly.

Overall, a salesperson shouldn’t be talking about price and value unless the customer has arrived at this stage of their buying process. If a customer does not see the value, they are going to object to the price. That’s why it is critical to fully complete the A = Action Needed step and the B = Best Solution step before discussing price and value.

Through The Eyes Of The Customer

When a salesperson uses the ABCs as their guide, communications becomes more positive, relationship oriented and avoids the negative aspects of sales pressure. Traditional sales objections are replaced by legitimate concerns and questions which help the salesperson to better identify if the customer is in the A, B or C stage. The perception of high value is created when the customer has acknowledged all of their needs and the offer addresses them.

A sale occurs in the mind of the customer, not the salesperson. It is the customer who must discover their own needs, discover the best solution to address their needs and discover all the value the solution delivers. Effective sales people lead their customers through this process of discovery. If you sell the customer the way the customer buys, you have the highest likelihood of making the sale.

Learn more about the conclusions of the 30 year research study that’s behind the ABC’s on why people buy, why top sales producers sell more and how salespeople can use this knowledge to increase their sales.

Strategy follows structure, structure supports strategy

The Connection between Strategy and Structure

Structure is not simply an organization chart. Structure is all the people, positions, procedures, processes, culture, technology and related elements that comprise the organization. It defines how all the pieces, parts and processes work together (or don’t in some cases). This structure must be totally integrated with strategy for the organization to achieve its mission and goals. Structure supports strategy.

If an organization changes its strategy, it must change its structure to support the new strategy. When it doesn’t, the structure acts like a bungee cord and pulls the organization back to its old strategy. Strategy follows structure. What the organization does defines the strategy. Changing strategy means changing what everyone in the organization does.

When an organization changes its structure and not its strategy, the strategy will change to fit the new structure. Strategy follows structure. Suddenly management realizes the organization’s strategy has shifted in an undesirable way. It appears to have done it on its own. In reality, an organization’s structure is a powerful force. You can’t direct it to do something for any length of time unless the structure is capable of supporting that strategy.

A Science Fiction and Real World Example

Let’s look at an imaginary example using the human body. Suppose science figured out how to create a living tissue arm to replace one’s existing arm that could perform 300% better in strength, responsiveness and dexterity. The strategy here is to restructure the body with this super arm so it can do more. The scientists successfully replace an existing arm with this new super arm.

What will happen? The rest of the body remains as it was before. So the heart, circulation system, nervous system and brain are still structured to support a regular arm. This new arm requires more and faster blood flow, faster neuron responses in the brain and so on to support its functions. Over time, the super arm will evolve back into a regular arm because the rest of the body cannot support its enhanced capabilities. For this science fiction example to work, scientist would need to restructure the entire human body, not just one part of it.

What happens when you restructure sales channels resulting in large sales increases but nothing is changed in order processing, customer support, engineering or manufacturing? You end up with a lot of unhappy customers because the company can’t deliver on its promise. How many times have we seen something like this happen?

Or what happens when you add a new offering that goes to a new target customer?  Maybe a company has a sales force that sells to small businesses and lower management in larger organizations. They add a new offering that is targeted at top executives. The existing sales force / sales channels cannot effectively sell to that new target. This has happened just a few too many times.

And, of course, what happens when a firm makes a major push to upgrade its quality and service without improving everything in the organization that supports products and service? Disaster. Plain and simple.

Strategy is the Structure

The sum total of how an organization goes about its work is its strategy. Structure and strategy are married to each other. When a company makes major changes, it must carefully think out every aspect of the structure required to support the strategy. That is the only way to implement lasting improvements. Every part of an organization, every person working for that organization needs to be focused on supporting the vision and direction. How everything is done and everything operates needs to be integrated so all the effort and resources support the strategy.

It takes the right structure for a strategy to succeed. Management that is solely focused on results can have a tendency to direct everyone on what they need to do without paying attention to the current way the organization works. While people may carry out these actions individually, it is only when their daily way of working is integrated to support strategy that the organization’s direction is sustainable over time.

Implementing Change As Important As Strategy Itself

During the last 26 years, we’ve worked with organizations in 30 different industries to help them find more ways to increase their rate of growth and market share. Improving existing strategies and creating new strategies that can spur exceptional growth reflect our firms main mission. But, over the years, we began to notice that some clients were not successful in implementing new strategies. That is what led us to look deeper into the cause behind this.

Does your company's DNA structure support your strategy?

Top management can’t just send out a proclamation about a new strategy, direction and vision and expect everyone to follow it. To implement such a strategic shift requires a complete change within the organization itself. The organization’s DNA has to be rebuilt or its existing DNA structure will cause the new strategy to fail and revert back to the old strategy. And that will happen without top management’s involvement.

Leadership and people issues turn out to be much more important than we may have realized. On the surface, everyone talks about the importance of people and leadership but too often, management puts this on the back burner when the heats on to deliver quarterly results or meet the guidance. Structure is strategy.

That’s why we realized our focus on increasing our client’s revenue had to be balanced by an equal focus on implementing change. We didn’t want to be leave clients with reports that weren’t implemented or worse implemented through directives that ultimately failed. So many years ago we became project managers for our client’s implementation efforts to insure that their new strategies designed to increase revenue actually rang the cash register. You can’t improve strategy, increase revenue, even enhance the performance of a sales force without addressing the structural, people, cultural, communication, measurement and leadership aspects of the organization or at least that part of the organization you are changing.

Strategy and structure are married to each other. A decision to change one requires an all out effort to change to the other. But that structural change must be well thought out and based on a thorough cause and effect analysis. You don’t just change a structure to change it. You have to make sure the changes will support that strategy. At the same time, you don’t just implement a better leadership and engagement approach in a company or alter the organizational chart without evaluating how that is going to effect the firms ability to carry out its current strategies.

Questions?

Schedule a phone conversation with Don Shapiro, President of First Concepts Consultants, Inc., to answer your questions and explore how this strategy and structure discussion relates to your organization.

To Explore This Further

The following articles will give you more insights into creating strategy and the role of people and leadership:

Creating Value…The Ultimate Path To The Best Strategies, Products and Services

Why do the same strategies succeed in one business and fail in another? Why do the strategies and success stories from best selling books work sometimes and fail other times? Is there a more universal principle for creating strategies that work all the time? This article will show you what that is and why it works.

We Need People Who Can Lead Regardless Of Their Title

Leadership isn’t about ones title or authority. It’s about who you are inside. Everyone in an organization needs to lead some of the time and those in positions of authority need to lead all of the time. Explores some deeper truths about leadership and leadership development that have a major impact on results.

It’s All About Thinking

Every result can be traced back to a decision that was based on a thought. Every strategy starts with the application or misapplication of thinking. Every decision about how to implement strategy and structure (or fail to change the structure when the strategy was changed) grew out of the thinking processes used by management. Don Shapiro has been studying and applying thinking processes since the age of 15. Every organization can improve its results, its strategy, its structure if it applies the right combination of thinking processes.