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When I was a salesperson I had a handful of best accounts where I felt like one of their employees. They loved me so much they bought everything from me, said they always would and considered me one of the family.

I specifically remember one of my favorite and best customers. I didn’t need a security badge to walk through their building. They trusted me so much they literally let me determine what their product needs were and write up the order myself. They just signed the order without looking at it and gave me a PO. They loved me. I needed no sales help.

Unfortunately, I soon learned that things aren’t always as we’d like them to be.

One day they told me, “Everyone here loves you and your service but competitor XYZ has been visiting with us over the last few months. They offer the same products and can provide us the custom packaging and labeling we need. We’re going to start using them from now on. If we need something special we’ll call you. This doesn’t mean we’re not friends anymore Scott. Come by and see us often. Have a great day.”

This good customer of mine was highly visible to all of my competitors; of course they were calling on them. How had I not seen that? The reason I got this great account in the first place was through my own prospecting. I had to steal it from another salesperson. My sales manager had even provided additional sales help to close the first deal. I thought since I was so entrenched at the account that my competitors wouldn’t call on them, nor would this loving customer even consider talking to my competitors.

If my competitors called on and took an account away from me where I felt so secure, then it made sense that they were calling on all of my customers. They all were vulnerable. Wake up call.

I learned the following from that experience:

1. My competitors are calling on all of my accounts and getting through to the decision makers.
2. I must always be adding new value to my existing customers, especially my best ones.
3. I can’t solely rely on personal relationships to keep me in an account.
4. I need to always keep prospecting; no account is guaranteed forever.
5. I have to accept that I am going to have some customer turnover, even from my best accounts.
6. I should never be too proud to accept sales help even on accounts where I’m completely confident.

By continually adding value to my customers and focusing on prospecting I not only replaced that lost customer but added enough so that my sales grew even bigger. My new philosophy was, “Enjoy the revenue you’re getting from the customer today, but plan to lose them at any time.” Customer turnover is a fact of life in sales.

Please tell your business associates about Scott R. Sheaffer’s Sales Tips Blog with sales advice for sales representatives and sales management. To receive by email <click here> to receive by RSS feed <click here>. © 2008 Scott R. Sheaffer

[I will be interviewing Gary Halliwell, CEO of NetProspex.com, on my next post. Watch for it.]

What is changing about our customers’ buying habits that we need to be aware of?

1. Vendor Consolidation. Companies are reducing the number of vendors they use by as much as 90%. I’m seeing this across all industries. Fewer suppliers means the customer has more power and control over the suppliers that make the cut. However, there is a positive flip side to this from the vendor’s point of view. This necessitates a much stronger partnership between customer and supplier and that’s always a good thing.

2. Metrics. Customers are no longer just interested in acquiring products and services. They are tracking all kinds of numbers about their vendors: service scores, total ROI, product defect rates, shipping errors, strategic cost management, etc. If you and your company are as good as you say you are, then here is your chance to show them in black and white. Good results on their metrics will provide you loads of ammunition to justify your higher prices.

3. References. Your customers are using the Internet and all of its social networking tools to find out about you and your company. Do they want to partner with you (or continue to partner with you) as part of their vendor consolidation? Sophisticated buyers know they don’t need to ask you for references anymore; they can find much more objective ones by “word of mouse.”

4. Global Outsourcing. Not much explanation needed here. If you’re a service provider it has never been more important for you to show your added value.

5. e-Commerce. Customers are getting very comfortable with buying over the web. I’m not just talking about nickel and dime purchases either; they are buying large volumes of high dollar items over the web. Relax, this will not replace you; use this to your advantage. For my take on this, please visit Attention sales representatives, the Internet is not replacing you.

Notice that all five of these trends are heavily influenced by the salesperson. The sales professional is, and always will be, the key to the customer relationship.

There are other trends, but these represent the top five. We must be careful to recognize these changes and adapt our sales approach to them, both from an individual salesperson’s perspective and from the sales organization’s perspective. Those that can most effectively adapt to these trends will create a competitive advantage.

Please tell your business associates about Sales Vitamins™. To subscribe: <click here> to receive Sales Vitamins™ by email or <click here> for the RSS feed. © 2008 Scott R. Sheaffer

For us to be most effective in attacking our target markets we must first define them and, secondly, be able to identify individual companies within them. This sounds really simple but it is amazing how many companies haven’t taken the time to do this.

One of the primary ways that we have traditionally identified markets and individual companies within those markets is by assigning them SIC codes. You remember SIC (Standard Industrial Classification) codes; they’ve been around since the 1930’s. The problem with SIC codes today is twofold. They were created when the U.S. was predominantly a manufacturing oriented country and SIC codes only have four digits, which can be limiting.

SIC codes needed to be updated to better reflect a changing North American economy and provide more options for classification. To do that, NAICS (North American Industry Classification System) codes were created and are replacing the old SIC codes. This industry coding system was jointly developed by the U.S., Canada and Mexico and has six digits. The Federal Government has been using NAICS codes since 1997.

NAICS codes can help us in several ways:

1. SIC codes are falling out of favor and are being rapidly replaced by NAICS codes. What a golden opportunity for us to take a fresh look at how we segment our markets.
2. Many industry reports that are now available either from public or private sources use NAICS codes. If we are still using SIC codes we won’t be able to use this new information very effectively as a benchmark for our own businesses.
3. NAICS codes can open our eyes to many service industry opportunities that were missing in the old SIC codes, which could play a prominent role in how we re-segment our markets.

CRM (Customer Relationship Management) systems are giving us increasing abilities to segment our markets through automation and NAICS codes are playing a key role. NAICS codes can be a very helpful tool in helping us focus our sales efforts. For a complete list of NAICS codes please see 2007 NAICS Codes.

If you’re not already a subscriber, <click here> to receive Sales Vitamins™ by email or <click here> to subscribe to the RSS feed. © 2008 Scott R. Sheaffer

I am fortunate to get many emails asking questions and making comments about sales.

There is one common theme that carries through all of this correspondence. All of our customers are just like us in the most important way. They’re human.

I received an email recently that helps make this point. I got permission from the sender to publish it anonymously. No further comment needed.

“Scott,

I have to deal with a nasty customer almost daily. If he wasn’t such a big customer I wouldn’t even bother with him. I was listening to yet another one of his complaints when the conversation took a turn I hadn’t expected. All of a sudden he apologized for “barking” at me so often and began to tell me about recently losing his wife to cancer. I was obviously very moved by his loss and his vulnerability. I will never view this man, or any other customer, as just a “customer” again. It reminded me that we are selling to people, first and foremost.”

If you’re not already a subscriber, <click here> to receive Sales Vitamins™ by email or <click here> to subscribe to the RSS feed. © 2008 Scott R. Sheaffer

We can get in all kinds of trouble talking about politics with customers during this presidential election year. We can also get into all kinds of trouble when we talk with our customers about their relative value to us.

Letting a customer know what their relative worth is to our company, and us, is not a good move.

Scenario 1, Question from one of our small to medium customers: “Gee Scott, are we your biggest, or one of your biggest, customers?” If we tell them they are one of our most valued customers (in order to make them feel more important) we have just given away all kinds of future negotiating power. If we are truthful and tell them that they are mid-pack (or lower) then they could be offended. Remember that many, if not most, of our customers think they are near the top of our customer hill.

The best way to handle this scenario is to answer with something like, “My business is split up by product, industry and geography. For the products you buy in your industry and in this part of my territory you are very important to my company and to me.” There are a million variations on this kind of answer.

Scenario 2, Same question from one of your biggest and most strategic accounts: “Gee Scott, are we your biggest, or one of your biggest, customers?” What we want to do here is to let them know they are very important to us without letting them think we are overly dependent on them, which robs us of negotiating power.

Remember, we are always in a state of negotiation with customers. An answer that could work in this situation might sound something like, “My company and I have a policy that all customers are very important; I hope you know that our unique partnership definitely makes you one of our most important customers.”

It’s surprising, but most of our customers don’t really know where they fit regarding their size and importance to us. Never bring this issue up on your own because it’s almost always a losing proposition for us. If you have a customer who asks this question, be sure to make the customer feel important without showing too many of your cards.

If you’re not already a subscriber, <click here> to receive Sales Vitamins™ by email or <click here> to subscribe to the RSS feed. © 2008 Scott R. Sheaffer

We’ve all done it. We throw a wrench in things with our prospects and customers by not getting them information on time, ordering and shipping the wrong parts, offending one of the decision makers, making promises that we aren’t able to keep, misquoting prices, etc.

There are a million things we can do to damage customer relationships.

When we find ourselves in situations like this we know to initiate all the standard recovery techniques such as bringing in our sales manager for help, readily admitting our errors, etc.

But what if those things don’t work? What if things are stalled and the customer doesn’t appear to budge or, even worse, appears indifferent?

When we find ourselves in this predicament we have a back door. I call it the Control-Alt-Delete Recovery. We’re all familiar with control-alt-delete; it’s the key sequence we hit when we want to reboot and start from scratch with our Windows computer when all else has failed.

When we initiate a Control-Alt-Delete Recovery with prospects and customers we attempt to initiate a second chance with them. By starting all over they see us differently and many times will be open to reconnecting.

There are three primary components of this strategy:

1. New sales team. We need to bring in a new sales team, both salesperson and sales manager. The prospect or customer needs to see all new faces. Once things start to recover there is a possibility that the original team could be slowly re-introduced.
2. Additional decision makers. Obviously we want to continue the relationship with existing decision makers, but we need to add additional decision makers into the mix to help create a new chemistry.
3. New products and services. Not only do we want to bring in new sales faces and add decision makers but we want to introduce some new products and services as well.

The objective is to create a whole new look for our sales approach so that the customer sees us in a different and favorable light. This strategy will take a degree of boldness and humility but it can help us regain momentum.

If you’re not already a subscriber, <click here> to receive Sales Vitamins™ by email or <click here> to subscribe to the RSS feed. © 2008 Scott R. Sheaffer

There is a stealthy serial killer in sales that many of us aren’t even aware of. It can kill deals and inflict injury on our relationships with customers. It is most frequently found in quotes, emails and other customer correspondence.

What is this silent sales assassin? The offender is the incorrect spelling of a customer’s name or getting their title wrong.

It doesn’t sound like a big deal, but it is a big deal to our customers. Dale Carnegie said that a person’s name is music to their ears. We love hearing our own name and our customers are no exception. People are also very proud of their titles and usually have worked hard to earn them. They want their name spelled correctly. They want their title stated accurately.

When we get a customer’s name or title wrong it communicates three not-so-good things.

1. It reinforces a negative, and incorrect, stereotype of salespeople. We don’t want our customers to perceive us as slap-you-on-the-back carnival barkers.
2. It communicates that we really don’t care that much about their business or about them as individuals. It doesn’t get any more personal than a person’s name or title.
3. It announces to the customer that we’re not too worried about details. If we can’t get their name or title correct, how persnickety are we going to be about other important aspects of the sale?

The larger and more complex a sales transaction becomes, the more the customer will view these kinds of mistakes as potentially fatal to the relationship.

While customers may not mention that we got their name or title wrong, rest assured that they have noticed and will not be impressed. We have to be careful not to think that their silence indicates this issue is not important to them. It is.

If you’re not already a subscriber, <click here> to receive Sales Vitamins™ by email or <click here> to subscribe to the RSS feed. © 2008 Scott R. Sheaffer

Here are two things that I absolutely hate to overhear salespeople say to customers or prospects:

1. “My schedule is wide open next week. I can meet with you at any time.”
2. “I sure hope you need to reorder those filters. I’m having a terrible month.”

Why do I hate hearing things like that? This kind of verbiage is counterproductive because we always need to look busy and successful to our customers and prospects. Many studies have confirmed that people feel more confident buying from sales professionals that they view as in demand and very successful.

Do you want to be treated by a doctor that drives a 20-year old station wagon and is always available? Our customers and prospects feel the same way. They assume that if we are busy and come across as successful that we must know what we are doing. The psychological term for this is cognitive consonance. If we’re busy and successful looking, then we must be busy and successful.

What should we do if a customer or prospect asks us about our availability and we have nothing scheduled on our calendar? We answer by asking them what a good time would be for them. “You want to meet at 2:00 on Wednesday? That will work perfectly; that slot is available in my calendar.” There are a million ways to handle this, but the rule of thumb is not to give them the perception that we’re twiddling our thumbs.

How do we answer a customer or prospect when they ask us if sales are good? Regardless of how bad or good things are going, answer with something that sounds like, “Things continue to go very well for me here at the XYZ Company. Thanks for asking.”

People like to deal with successful people. We can make the buying decision easier for our customers and prospects by coming across as a winner.

If you’re not already a subscriber, <click here> to receive Sales Vitamins™ by email or <click here> to subscribe to the RSS feed. © 2008 Scott R. Sheaffer

Most salespeople would never admit they have become an order taker.

There are two major drawbacks with being an order taker. One, order takers make less income both in commission and base salary. Two, order takers are easily replaced by customers and employers.

I’ve had times in my sales career when I slipped into being more of an order taker than a consultative sales professional. This can happen when we get busy and put less emphasis on our partnership with our customers. Before we know it, we’re just taking orders.

When the information flow between our customers and us diminishes to just part numbers, quantities and PO numbers we start to look like a generic salesperson. We become a sales commodity instead of a sales resource to our customers. A commodity is something with limited value and is commonly available, not exactly a prescription for high perceived value.

How do we know if we are slipping into the order taking mode? Here’s a short test.

1. Is your correspondence with customers predominately by email?
2. Do you only sell your company’s basic product lines?
3. Do you only have one or two contacts at most of your customers?
4. Are you only aware of your customers’ immediate needs versus their long term projects?
5. Is your knowledge of competitive activity at most of your customers virtually zero?
6. Do your customer records contain limited information and are they disorganized?
7. Do you feel you win the majority of your business on price?
8. Do your customers never or rarely call you with special needs?
9. Do you send out a disproportionately large number of price quotes for the number of orders you write?
10. Are you never or rarely involved with your customers socially?

If you answered “yes” to three or more of the questions above then polish up your customer relationship skills and get back in the game. Go through your customer list one account at a time and consider how you can renew your partnership with each of them. Customers are buying from you because of your personal value to them. Order takers are a dime a dozen.

If you’re not already a subscriber, <click here> to receive Sales Vitamins™ by email or <click here> to subscribe to the RSS feed. © 2008 Scott R. Sheaffer

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.