A recent survey of Australian business put sales, not just survival, in the spotlight for 2010. Finally a positive trend however cost-effective customer acquisition was cited as the highest concern for the year. Another 38% of respondents cited customer acquisition as a notable concern. Asked to assess other issues that threaten business in 2010 as well as "what keeps you up at night," executives cited:
- Finding new ways to grow business - 33%
- A further downturn in the economy - 21%
- Ability to find new products, products lines, or markets - 18%
What sales growth strategy is your business pursuing as the economy begins to show signs of recovery? As the business climate improves, frozen budgets are beginning to thaw and companies are allocating funds to projects that were deferred during the height of the downturn.
If your organization has been in survival mode over the past year, you may have been focused primarily on protecting your customer base. Now the question is how best to take the first steps toward jump starting increased sales.
Should you invest in higher levels of prospecting activity to expand your customer base? Or is it more productive to seek out hidden opportunities in your current accounts?
It may seem that the quickest path to substantial new business is via new customers. However expanding the base is always expensive, and, at present, it may be more so. Caution is still the prevailing mood across most industries and few firms are ready to risk starting out with new suppliers. It makes sense to look for opportunities in your own backyard - the accounts in which you already have an established relationship.
The good news about working with your current customers is that you are already in the "magic circle" of trusted suppliers. The bad news is that the same familiarity that brings repeat business can also become a straitjacket.
Sales executives become comfortable with a small number of contacts in a particular area, such as IT in the case of a technology offering. Although management may have exhorted them to call higher and wider in their accounts, they can be at a loss as to how to break out into other areas without damaging their primary relationship. They are especially reluctant to call on executives who have little obvious reason to talk to yet another salesperson.
Yet without such conversations, opportunities that are invisible from inside the confines of one primary area and organisational contact will be missed. Decisions about priorities and funding are made at a company's higher levels.
Many lower-echelon and mid-level managers have less budget authority than they had even a year ago, as spending continues to be tightly controlled. Customers are being especially cautious allocating still-scarce resources and are highly focused on a few strategic goals. It is in those targeted areas that the real opportunities will be found.
To uncover those top few strategic priorities, your sales team need to overcome any reticence about developing relationships with executives outside their usual circle of contacts.
What is required is a business wide calling strategy to meet with the right people at the right levels to confirm that account’s top business priorities. Based on that information, opportunities can be prioritised and solutions tailored to provide the greatest benefit to the customer.
To be successful, however, it's essential to know how to (1) identify who to call; (2) prepare for the call to ensure credibility; and (3) lead the conversation as a business resource, not as a salesperson.
The "right people" question is the first one to be answered, and the calling strategy should identify which functional areas of the company to target and relevant people to contact.
Decisions about where to call should focus on finding information about issues such as the following:
- Competitive challenges
- Research and development goals
- Financial metrics
- Go-to-market strategy
- External changes, such as new regulations or the emergence of new technologies or competitors
- Internal changes, such as acquisitions, mergers, restructuring, etc.
Once the right areas have been determined, identify functional leaders who can discuss specific departmental goals and accountabilities, as well as the executives who have both a business unit and corporate perspective.
For many, the biggest barrier to calling higher up the ladder is the lack of a clear answer to an obvious question: "Why do I want to take time to meet with you?"
To answer with confidence requires a transition from a sales mindset to a business mindset. All executives are interested in discussing pressing business concerns.
Although only a detailed conversation can verify specific concerns, you can establish credibility from the first contact by demonstrating broad knowledge of key issues affecting the customer's industry.
The concept of critical success factors (CSFs), defined as "the few key areas of activity in which favourable results are absolutely necessary for a [company] to reach its goals." (John Rockart MIT Business School) is invaluable when planning such conversations.
The key words are "few" and "to reach its goals".
Typically, there are only a handful of CSFs to be identified. They are not the same as goals. Rather, they are the things that need to go right if the goal is to be attained.
They are deemed critical because if those factors don't go well, the business or project could fail. That is why CSFs are sometimes described as "the things that keep executives up at night."
If Lehman Brothers had maintained enough assets to fulfil financial obligations (once considered a given in their industry), there might have been no global financial collapse and the firm would still be in business.
CSFs exist on an industry, business and functional level.
For example, in the distribution/transportation industry, supply-chain management and delivery efficiency is a CSF. This might mean that an executive in charge of operations for a large distribution company has a specific goal to reduce delivery time by 25%. One of his CSFs might be to streamline warehouse picking and packing operations.
At the level of the warehouse-operations manager, that CSF turns into a goal—to implement new procedures, possibly new inventory management software, and so forth, within a specified time frame.
How does this help prepare for a conversation with a specific executive? It provides a well-defined objective for "due diligence" research to learn about the customer's industry and business environment.
Armed with information about industry CSFs, a conversation could begin with the executive in the above example by asking a relevant question: "Many distribution companies are focused on improving speed and efficiency of delivery. Is that a concern for you?" Such a question establishes a context for a discussion of the executive's business and a rationale for further conversation i.e. to learn more about the answer to that question.
With a foundation of knowledge about the executive's industry and company, you should be able to plan for an effective face to face meeting with your prospect. The key is to focus on two objectives:
- delivery of value to the executive and
- confirmation of the executive's goals and CSFs.
The two objectives interact with each other. Many leaders have not explicitly articulated an answer to the question, "What has to go right for X goal to be achieved?" They often find it interesting to discuss their goals in those terms and to clarify their own thinking in the process.
You have the opportunity to add further value if there is information to share based on conversations in other business units or at other levels in the executive's own area.
A useful protocol for a CSF conversation is to begin with a reference to one or more industry CSFs and then narrow the focus to one or two key goals. With respect to each goal, ask questions to discover the CSFs, which will be the executive's top priorities.
A model for the conversation might include questions such as the following:
A series of such conversations in the right areas of an account will give you an accurate and clear understanding of where resources and attention will be directed.
An analysis of the specific goals and CSFs of key decision makers as well as the overall company goals and CSFs will provide a template for determining where your offering/solutions can have the greatest impact on your customer's business. Several opportunities may open up as a result of implementing this call strategy. The CSF information will provide an additional tool for prioritising areas so you can focus sales efforts for the biggest payoff. The return on investment in this strategy comes not only in terms of an individual sale but also in terms of establishing a relationship with more contacts, at higher levels, than you had before.
Although that kind of networking and relationship building in a current account requires time and resources, it is more efficient and effective than starting from scratch to find prospects and acquire customers.
As companies become more confident about new capital expenditures and more of them open up new projects for consideration, the same approach can be used to expand your business base, building a greater variety of relationships in new accounts from the very beginning. It can boost sales and profitability across the board, in both older and newer accounts.
The Payoff: Discovery of New Business Opportunities
"To achieve goal A, what are the key activities that have to go strictly to plan?"
"Could you tell me a little about your current goals for your business?"
"As I work with other companies in X industry, I have found that many of them are concerned about Y. Is that a concern for you as well? How has your company responded to that issue?"
Leading a Business (Not Sales) Conversation
Preparing: Critical Success Factors as the Context for Credibility
Identifying the Right People: Who Are You Going to Call?
Executing a Calling Strategy for Expanded Business
The Challenge: Familiarity Breeds Entrapment
