Archive for November, 2009
They’re different; marketing and selling.
However, they seem to get mixed up in the minds of many who’s job it is to bring in new business.
You can see it in proposal responses that are trying to “educate” decision makers. Those are the elaborately long answers to RFP questions that go off into the ether and entirely miss the need to sell at that moment.
And you can see it in marketing that presents only features and benefits…in every message. Messaging without a compelling customer experience. It’s as if you sit down in a restaurant and the first thing you’re given is the bill, before ordering, even before eating the meal.
Here’s a quick, non-academic separation of church and state (marketing and selling):
Marketing is…
- Speaking to the anonymous many in a market
- Understanding the needs (hidden or explicit) of customers in that market
- Publishing compelling messages about the valued customer experience your firm delivers
Selling is..
- Solving one customer’s specific service needs
- Connecting that customer’s service needs to the impact they have on their business results
- Presenting a unique solution to address those needs & help customers reach their goals
Do the right thing – market when you want to:
- Raise awareness
- Get qualified, motivated leads
- Seek to own a specific position in a market
Do the right thing – sell when you’re:
- Introducing your firm the first time face-to-face
- Writing a proposal & answering an RFP
- Presenting your proposal in-person as a short-listed supplier in a bid process
How do you differentiate between Marketing & Selling?
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Chris Arlen
President, Revenue-IQ
November 25th, 2009
Staying the same never is. We exist in a constant state of decision making. Not making a decision, is making a decision. Not taking action is making a decision.
Healthcare reform is a good example. Not making a decision in 2009 will cost.
In 2008 the U.S. is expected to have spent $2.4 trillion on healthcare, that’s 16.6% of GDP (Gross Domestic Product).
By not making a decision for reform (i.e., the system works now and doesn’t need fixing) healthcare costs are expected to reach $4.4 trillion annually, or $20.3% of U.S. GDP by 2018.
That’s a Lost Opportunity Cost (LOC) of $2,000,000,000,000 over 10 years.
In the service contract world, as in healthcare reform, there are no guarantees the selected solution will avoid all of those costs.
It is certain there is a cost for keeping the status quo.
The Largest Invisible Elephant
LOC is the largest unspoken element in sales conversations with customers.
Salespeople rarely get to the LOC because they’re too busy spouting about their competitive advantages (see “Crossing the Line“)
Intelligent salespeople get distracted in their search for ROI from services as operating expenses. That’s a dog chasing its tail (see “ROI: Facility Services’ Holy Grail“) .
LOC is Everywhere, All the Time
LOCs are incurred when the current situation continues without change, a result of no decision.
Nature abhors a vacuum, and when a challenge or threat is seen, not deciding doesn’t prevent nature from continuing on its merry way. Non decisions get flattened by the momentum of the steamroller anyway.
Using LOC to Sell Services
LOC is a persuasive tool for sales proposals and presentations.
One that needs some sensitivity as you’re presenting a painful reality (lost money) to customers.
Additionally, you have to make some best guesses. At best LOC is a ballpark number. As you’re guesstimating about future costs, you’ll need to shape your language that way, e.g.
“…based on our understanding, your current situation can be estimated to lose more than $$$,$$$ over the next year…”
Always include your formula and cost assumptions used. They don’t need to be placed next to the LOC estimate, but can be referenced in a footnote, or endnote.
Calculating LOC
To calculate LOC, deep dive into customers’ issues during your sales due diligence.
Identify how NOT fixing those issues costs customers money. For example, seek LOC estimates in:
- Work that could have been avoided
[the current state] – [your solution] = LOC, or
[(labor $/hr + payroll burden) x (# of wasted hours)] – [your way] = LOC
- Vendor management time that could have been avoided (same formula as above)
- Product, supply, or equipment purchases that could have been avoided
[current purchases] – [your solution] = LOC
How are you presenting Lost Opportunity Costs?
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Chris Arlen
President, Revenue-IQ
November 19th, 2009
Customers have no choice, they must buy. It just might not be you.
Obvious? Overly simplistic? Sure it is, but…
I was talking with someone who’s about to begin an outside sales career after years of inside sales. Our conversation reminded me when I began selling, and I was a little intimated and embarrassed calling on customers.
At that time I didn’t know customers have no choice, they must buy. There are certain understandings fundamental to selling, and business in general. This is one of them.
Skip over this one, or miss it entirely, and your selling will be out of step with customers, apologetic, and a burden to yourself.
Customers 4 Buying Options
Customers have no choice, they must buy.
Why? Because they have needs. Explicit or hidden, all customers have needs. And those needs drive customers to one of only 4 options, customers can:
- buy you & your offering
- buy your competitor’s
- buy themselves by doing it themselves (aka going in-house)
- buy time by not deciding to change, waiting for something better to come along later ( look for next week’s post LOST OPPORTUNITY COST)
Therefore, if customers must buy, then salespeople have a purpose for their existence. Here it is:
Salespeople help customers become aware of their specific needs. Or, if customers are already aware, salespeople help them clarify the implications when those needs are fully or partially resolved, or not resolved.
The question isn’t “do I, as a salesperson, have the right to contact customers?”. No, there’s an imperative for salespeople to engage customers. To help customers fulfill their purpose by helping them buy.
How do you help customers buy?
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Chris Arlen
President, Revenue-IQ
November 12th, 2009
When internal sales talk crosses the line to become outside customer conversation, your perspective and word-choice can leave you fully exposed and vulnerable.
The words used in customer conversations are a dead give away for how you see the world, and how customers will see you.
Customers intuitively pick up on your approach to solving their problems and serving their needs. They’re deciding if you should be their supplier based on your communications, which are driven by your choice of words.
Competitive Advantage vs. Value Proposition
Consider this, if you’re describing your competitive advantage to customers your naked. Why?
Because, competitive advantage is “internal sales talk”. It’s needed when talking sales and marketing within your company. It identifies what you do against the competition and helps you design service offerings.
However, customers aren’t interested in hearing about your competitive advantage (read competitive comparisons).
They’re interested in what you’re going to do for them.
Specifically, how you’re going to:
- Lower their costs
- Improve their performance
- Make them look better
They’re interested in your value proposition.
Speak to customers about what they care about
Ultimately, customers seek what serves them best.
It won’t matter that you’re the world’s best in xyz, if customers don’t care about xyz.
For sales people that means not crossing the line, unless and until you’re communicating appropriately from the customer’s perspective, using words that show it.
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Chris Arlen
President, Revenue-IQ
November 5th, 2009
