Archive for October, 2007

Dysfunctional Work Environments

Monday, October 15th, 2007
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Subrogation of Perjury. It’s a legal term that means you are attempting to get someone to lie for you. The courts don’t like perjury, but they really don’t like this subrogation of perjury thing. You shouldn’t either. Read on.

So what does this have to do with sales? Actually, plenty, and not in the way you probably think. You can sometimes observe subrogation of perjury in a dysfunctional sales environment. Let me give you an example. You’re about to meet with the VP of sales and your immediate manager coaches you to say certain things about your customers to make you (and more importantly, the manager) look better. They may coach you to misrepresent how large the opportunity is, how close to closing a deal is, how many decision makers you have a relationship with, etc. They are clearly asking you to lie. Do I need to tell you where this kind of thing ends? Simply stated, the “truth will out” and when it does it can be ugly.

Even more disturbing than just getting someone to lie is what this kind of behavior indicates about the workplace. A sales culture or environment that promotes this kind of thing is dysfunctional. This behavior is also seen in abusive workplaces centered on fear and intimidation. Working for a company that tolerates this will ultimately take your soul. Here’s why. People that are truly sales professionals will not tolerate this sort of working environment and will “vote with their feet” (i.e., quit). Those that will put up with a dysfunctional work environment will stay, and over time a salesforce is created that is weak and accommodating. Individual salespersons might even start to think that this is normal, but things will only get worse for them and their career if they elect to stay. There are many attributes of a sick sales environment, but this is a bellwether indicator.

If you are a sales manager and you’re asking your folks to misrepresent things, please cease-and-desist. My suggestion to you is to stop doing this immediately and if your company can’t handle it, you don’t want to work there anyway. If for no other reason, do it to improve the quality of your salesforce over time.

If you are a salesperson and being asked to change the facts is part of your company’s culture, find a new job.

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Collateral Material, Sales Brochures, What a waste!

Saturday, October 13th, 2007
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I’m going to shake some people’s foundational beliefs when I say this; printed sales collateral in business is a waste of your time and money. Don’t believe me? When was the last time you actually read printed sales collateral from a company you were contemplating doing business with? When was the last time you actually read printed sales collateral given to you by a salesperson you were trying to dismiss by asking them if they had any sales material they could leave behind. When you mail or leave collateral material you instinctively know that the recipient isn’t going to read it. When you were new to sales you used to end every unsuccessful cold call with, “I’ll mail you some information.” Mailing the prospect some information somewhat made you feel like you were moving the sale along, but in your heart of hearts you knew you weren’t.

So why do so many companies continue to print sales and marketing brochures? For two primary reasons. One, it’s a leftover from pre-Internet days. Two, the act of mailing something to a prospect or having a “leave behind” piece makes us feel like we’re accomplishing something. Old fashioned marketing managers will claim that you must have printed sales brochures. Twenty-first century marketing managers will tell you that your “sales brochure” is found on the Internet. Studies have shown that about 70% of business buyers go to the Internet for information before they place an order. They aren’t looking for an outdated sales brochure for this information.

Every sales organization that has been around for 20 or more years has a room or closet where they keep all their collateral material. This material is normally dusty, grossly outdated and disorganized. The second a brochure is printed it’s out of date. There’s a better answer, the Internet. Websites, blogs, email, wikis, etc. provide information to the prospect or customer that is current and can be done inexpensively and quickly. And, the prospect or customer finds it a better and more reliable information source on your products and services as well.

Cisco Systems out of San Jose, California with $30b in annual revenue is a great example of a company that has this concept down pat. Try to find a Cisco sales brochure. You can’t. Over the last 23 years they have educated their customer base to go to http://www.cisco.com/ to find information about Cisco. They work in an industry where things change in a heartbeat and there is a lot of information. A bunch of dated product literature lying around just wouldn’t work for them. And whether you know it or not, it won’t work for you either.

It’s the 21’st century. It’s time to realize that if customers truly want information about your company, they’re going to the Internet to find it.

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Decision Makers, Vertical vs. Horizontal

Friday, October 12th, 2007
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I think we all know what a decision maker is at a customer or prospect. This is the person or persons that have the authority to order your products and services. It’s as simple as that. It can literally be just about anyone in a company. I’m surprised sometimes by who are designated as purchasing decision makers. Sometimes it’s the receptionist, sometimes it’s the CEO and sometimes it’s actually someone in purchasing. A decision maker is in contrast to information gatherers or recommenders whom you provide information to but aren’t actually involved in the buying decision. Information gatherers and recommenders provide their information to an ultimate decision maker.

Let’s talk for a second about multiple decision makers. There are two types.

1. Vertical Decision Makers. These are decision makers that either get or give information relative to the buying decision and must act in concert with other Vertical Decision Makers before a buying decision is made. This is group buying. If you are selling to person “A” who has to get approval from manager “B” before buying then they are a Vertical Decision Maker. And if manager “B” won’t make a buying decision before talking with person “A” then they are also a Vertical Decision Maker. We typically don’t like dealing with Vertical Decision Makers because we aren’t selling to a unilateral decision maker and so we burn a lot of time. When you find yourself in one of these situations make sure you develop an ultimate decision maker by earning his or her trust and bypassing the group process.

2. Horizontal Decision Makers. We like this kind of selling environment. This is a situation where you are dealing directly with multiple ultimate decision makers who can all buy from you. This would be common in situations where you are selling your product or service to multiple departments within the same company. Here’s a simple and yet unbelievably infrequently used selling tip. When you are selling to an ultimate decision maker at a large company be sure to ask them this simple question, “Besides yourself, who else orders these products and services at this company?” This question will help ferret out other Horizontal Decision Makers.

Your goal as a sales professional is to eliminate Vertical Decision Maker selling environments by developing an ultimate decision maker at those customers. You also want to create Horizontal Decision Maker selling environments and expand the ones you have.

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The Importance of Closed Ended Questions

Thursday, October 11th, 2007
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In an earlier post I talked about the importance of open ended questions. You remember that open ended questions are questions that can only be answered with an explanation. This kind of question helps the sales process along because it gets more information from your customers or prospects and helps to build a relationship with them. Let me be clear about one thing however; there is a place for closed ended questions too. Closed ended questions can be answered with just one or two words.

Customer: “Your price is a little high, but you’ve got them in inventory and I need them tomorrow.”
Salesperson: “Do you want me to put them on order right now to ensure that you get them on time?”

What a great example of a directed closed ended question. Closed ended questions work best when we are trying to steer a customer or prospect in a certain direction. Think of them as a railroad switch where the train is put on a different track in an instant. We’re not trying to build relationships or get additional information. We’re simply trying to get the customer or prospect to move in a different direction.

Keep these points in mind regarding closed ended questions:

1. You’ll use more of them as you get closer to making the sale. This happens because you are trying to influence the customer or prospect’s thinking in a direct way. If you are using a lot of closed ended questions at the beginning of a relationship you’re probably making mistakes.
2. Open ended questions are great, but you can’t use them for everything. There are times when closed ended questions are more appropriate for the information you need.
3. Too many or poorly contrived open ended questions can hurt more than they can help. Sometimes a closed ended question seems more sincere.
4. Don’t confuse a series of closed ended questions for an open ended question. I see this error almost every time I work with a salesperson. If you machine-gun a customer or prospect with closed ended questions you’ll definitely turn them off. Use closed ended questions sparingly and they’ll have more impact. Telemarketers and “sales-is-a-numbers-game” prospectors are the most frequent violators of this rule. They’ll call up a prospect and just kill them with a relentless series of closed ended questions.

There is most assuredly a place for closed ended questions in the sales process. The problem is that a lot of salespeople only use closed ended questions or use them at the wrong time in the relationship.

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Handling Objections, Dismissals

Wednesday, October 10th, 2007
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I’m not talking about employee terminations here. I’m talking about when your customers or prospects dismiss your sales efforts.

Prospect: “I can’t meet with you until the end of the year Debbie. Do you have some literature you can send me in the meantime?”

Debbie has just been dismissed. We all know that prospects don’t read collateral material and they use the, “Can you send me some literature?” ruse to make you go away. It’s an objection. Remember, a customer or prospect objection is anything they do to get you to stop the selling process. They want you to stop selling them and they’ll come up with anything, whether true or not, to make that happen. Their goal is not to give you good information at this point; their goal is for you to leave them alone.

There are many kinds of dismissals. Another popular one is the, “Call me back in six months.” dismissal. Do you really think they want you to call them back in six months? They’re just buying some time.

So what do you do about customer or prospect dismissals? First, recognize dismissals for what they are. The customer or prospect is trying to disengage you. You may have engaged the decision maker at the wrong time, you may have the wrong decision maker or you might not be explaining your product or service very well. Do a reset on this sales call and correct whatever is causing the problem. Second, ask yourself if you are getting more than your fair share of dismissals. If you’re getting an inordinate amount of customer or prospect dismissals then it could mean that you are not contacting qualified prospects, you’re forgetting to develop the relationship with the customer or you’re not listening and getting enough information.

Everyone gets dismissals. It’s a sign that you’re out there beating the bushes. That’s a good thing. Just be careful not to take too seriously what the customer or prospect is saying when they dismiss you because it’s almost certainly not accurate information they are providing. When you get a dismissal understand it for what it is; if you are getting too many, then modify your sales approach.

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Interviewing and Hiring Salespeople

Tuesday, October 9th, 2007
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I have mentioned in earlier posts that I’ve interviewed thousands of individuals for sales positions. A bad habit I got into earlier in my career was to interview too quickly and make hiring decisions too quickly. I don’t think I was alone in doing that. One can understand why sales managers don’t always take the necessary steps in interviewing:

1. Sales managers are responsible for a revenue commitment and don’t have a lot of time to interview.
2. Since a sales position is measured almost solely by sales results, the sales manager doesn’t have to feel a lot of chemistry with the applicant. They just need to feel that the applicant could successfully sell the products or services.
3. Most sales positions are commissioned positions so the loss to the company of a poor performer is somewhat minimized.
4. Salespeople are professional interviewers. What can you really know about them until you put them out in the field with a sales budget?

All of the above are true. However, if you take the near-sighted view of hiring you will pay, pay and pay for making a bad hiring decision. Customer damage and opportunity costs are just two of the problems caused by a bad sales hire.

I have two pieces of advice that will help you to stop making bad hiring decisions.

1. Make a sales call with the sales applicant before making a job offer. This one is so obvious that we can’t see it. It’s like grandpa looking for his glasses that are on his head. Yes, it takes some time and planning but you will gain tremendous insight into how this person behaves in front of customers in a real customer environment. Depending on the sales level being hired, I would even agree ahead of time for the applicant to engage the customer in a certain topic or point.
2. Slow down. Any incremental gain you might make by hiring quickly will be lost a 1,000 times if you don’t perform your due diligence and as a result end up hiring the wrong person.

We all know that hiring salespeople is an art and a science at best. Sales applicants are professional interviewers and know how to sell themselves. And everyone knows that a salesperson (or sales manager in this context) is the easiest person to sell because they often make emotional decisions. Apply the two simple points above and you will put a little more science in your hiring decisions.

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A Great but Infrequently Used Objection Handling Technique

Friday, October 5th, 2007
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My 24 year old daughter who is two years into the beginning of a successful sales and marketing career called me yesterday. She said, “Dad, I used one of the sales techniques you taught me and it worked!” I was so dumbfounded that I didn’t know how to respond. Not because the technique worked, but that she actually listened to some advice from her father.

I asked her what happened. She told me that she has been working for some time to close a large deal. She was in a meeting and the key decision maker kept throwing objection after objection at her to the point where it almost turned into a whining session. After about an hour of responding to these objections she realized things weren’t going anywhere, in fact, she may have even been losing ground with the customer. And then she remembered what I told her about ignoring objections.

Ignoring objections is very powerful yet most salespersons don’t use this tool. It’s not used very often because it seems somewhat scary. Here are some key points in using this technique:

1. Studies have shown that the first objection that a customer or prospect throws at you is typically just a knee jerk response and carries little real importance to them. The first objection is a good objection to ignore.
2. If you have fielded one objection after another and see no end in sight, this technique can help end the barrage. If you keep responding to a stream of objections, the customer or prospect sometimes sees no need to stop. Remember, it takes two to tango. This is exactly the point that my daughter stopped responding to the customer’s objections.
3. No need to feel anxiety about using this technique. Why? If the objection is really important to the customer or prospect, they’ll bring it back up and you can handle it head on at that time.
4. So how do I ignore an objection? You acknowledge that you heard the objection and then just continue. It’s really very easy.

Customer: “Your price is too high.”
Salesperson: “Oh (or uh huh)…(pause)…did I tell you that we provide service on everything we sell?”

5. So what is the message to the customer? It’s the following metamessage, “I’m not going to do any more bending for you Mr. Customer and now it’s your move.”

When I was a salesperson I was hesitant to use this technique until I saw it used successfully by a standout salesperson at the company where I was working at the time. Once you start to use this technique and get proficient with it you’ll get addicted like I did. Not only does it help you deal with the objection at hand, but it demonstrates how empty and meaningless most objections are that we get from customers and prospects.

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When Interviewing a Sales Applicant, Look for These Things

Thursday, October 4th, 2007
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In my last post we talked about things that sales applicants need to look for in a potential employer when interviewing for a sales position. Now let’s talk about some important things that a potential employer should look for in a sales applicant.

A sales position is always temporary so you can expect sales professionals to move from job to job every few years. You don’t want to hire someone that has been in the same sales position for 20 years. However, there is a limit to this transitioning from job to job. A good rule of thumb is an average of three to five years per job. If they are moving any more than this you might want to raise the yellow flag.

I don’t think I have ever, with a few exceptions, interviewed a sales applicant that claimed they weren’t either the number one or number two salesperson at all his or her past employers. Please keep in mind that I have interviewed thousands of applicants in my career. If they were ranked so highly why would they leave all those companies? The truth is that most applicants you interview are either mid-pack or below. Have them show you sales ranking charts, awards, etc. that prove their sales position at their past employers before you hire them. Every sales organization normally has all kinds of awards, percent of budget rankings, company newsletters, etc. that could easily be produced to show the interviewer their relative sales position.

Knowledge. Just like with sales rankings, almost every sales applicant I have ever interviewed exaggerated their product or technical knowledge. Virtually every one of them claimed to be an absolute world authority on whatever it was that they were supposed to know. Most interviewers resort to asking a few product or technical questions to get a feel for what the applicant knows. The problem with this technique is that it is totally haphazard. The other problem with this technique is that if the interviewer really likes the applicant they normally don’t want to eliminate them based on limited product or technical knowledge. The way to ascertain an applicant’s product or technical know-how is to create a standardized product or technical test that all applicants must take before being hired. This removes the interviewer bias, makes sure you ask the right kinds of questions and creates an objective measurement.

Interviewing and then hiring successful sales professionals is probably one of the most difficult jobs around. If you avoid applicants that frequently change jobs, those that can’t prove their sales success from prior employers and ensure that you give them a standardized test on product and technical knowledge, you will greatly improve your batting average.

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When Interviewing for a Sales Job, Look for These Things

Wednesday, October 3rd, 2007
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As I have said in earlier posts, a sales job is always a temporary job. You can’t expect to work your entire career for one company. To do so would be bad for your career and bad for your employer as well. Since it’s a virtual certainty that you will work for multiple employers as a sales professional, then you need to know how to select employers.

Most salespersons are great at interviewing since that’s part of their daily job duties. What they aren’t so good at is asking the right questions sometimes. I cannot begin to tell you the number of sales candidates I have interviewed through the years that try to just “close” the interview and get the job without really knowing what they are getting into. Here are a few key things that you need to establish before ever accepting a sales job.

1. Why is the position open? Just about every sales position that becomes available to the public probably is not the best sales position available at a company. Think about it. If a great account base is vacated then it will be assigned to a proven salesperson that is currently working for the company or it will be offered to someone that is networked into the company. Bottom line, vacancies for sales positions where sales are stellar will not be publicized.

2. What is the turnover for the entire sales force? If it’s much above 20% you should be concerned. If they won’t or can’t give you turnover information, run, don’t walk, from that interview.

3. What is the modal income across the entire sales force? Asking the average income for the sales force is a waste of your time. There are always a number of super high producers that pull the average up and sales management always pads the average on top of that. The number you should care about is the modal income. When asking for the modal income you are asking what income level is most prevalent. In short, if you lined everyone up by how much they made last year, how much did the people make in the longest line?

There are a lot of questions to ask when it comes to interviewing for a sales job. These are three of the most important. Since sales is a numbers only job don’t be shy about asking these questions. If they won’t or can’t answer these questions then you probably have all the information you need anyway to make a decision.

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Good Sales-Good Economy, Bad Sales-Bad Salesperson

Tuesday, October 2nd, 2007
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If you’ve been in sales for a while you’ve heard this kind of thing many times, “Wow, the economy is really booming; Bill is having a great quarter.” You have probably also heard its reciprocal, “Karen is having a bad sales year; she’s not much of a salesperson.” Basically what you’re hearing is that if a salesperson’s sales are good then it has to be because of a great economy. If their sales are poor, then they must be a bad salesperson.

Now I know that there are in fact some great sales professionals that have had stellar years in truly bad economies. I also know that there have been a lot of salespersons who despite a robust economy and good territory, have managed to tank. There are a million variables here. But what I’m focusing on is management’s tendency to not look inward and admit to themselves that on some occasions they have a good salesperson that is doing poorly for reasons beyond their control, like a bad market, poor products and pricing, terrible territory, etc.

While it is painful for sales management (and executive management) to do a little introspection, it can save a good salesperson and help to make some much needed changes in how a company goes to market. If sales management finds that the last 12 salespersons have failed in a territory, it’s probably time to make some changes to that territory. If a salesperson that was extremely successful selling widget X can’t give away widget Y, then there might be a problem with how widget Y is marketed, priced, etc.

Sales professionals don’t usually go stupid and suddenly forget how to sell. In many cases it can be what, when and where they are selling. Use the opportunity to honestly assess the situation, save a good salesperson and make some long needed changes. I can’t overstate how resistant most sales management is to doing this kind of thing.

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