Time is money, yeah, yeah, we've heard that before. But if time really is money, why do so many professionals squander it chasing anyone with a pulse, including their most horrible prospects? Because they still embrace one of the great myths of selling, common mistakes that drain profit and energy from a sales organization:
Myth #1: Everybody is our customer.
Myth #2: Every sale is a good sale.
Myth #3: Never take no for an answer.
Myth #4: There's always time to make more sales calls.
Myth #5: Sales people pay for themselves.
Business people the world over know these statements are myths, but behave as if they aren't. Why? It's because the great selling myths are so familiar that they have become invisible. To uproot them, we must create effective ways to replace them with more adaptive, successful practices, and turn those practices into habits. Changing habits is hard.
In the case of the Five Selling Myths, these old habits are ingrained in decades of selling tradition, enshrined in company policy, and even taught by well-intentioned people who might be a little bit behind the times. Replace each of the Five Myths with the Five MythBusters, new approaches to the issues that create better outcomes. Selling is about money - making it, but also spending it. If you knew the real cost of one hour of selling time, you might invest those hours more carefully.
Studies have shown that the average sales person only has about 900 hours (about 100 days) of face-to-face selling time per year, once you take away weekends, holidays, vacations, sick time, and record-keeping. To reach a $1 million dollar quota, each of those 900 hours is worth a whopping $1,111. When the Five Myths rule the sales process, a lot of those expensive hours get wasted. Keep that opportunity cost in mind as you review the Five Myths.
Myth #1: Everybody is our customer. In spite of the thousands of words that have been written about this subject, we still find sales people and executives who don't define their target markets or prospects very well. The awful truth is that when you act as if "anybody" is your prospect, you are throwing money down the drain. You're spending $1,000 an hour to chase marginal prospects, because it feels better to be busy. But to what end?
Mythbuster #1: The right prospects seek the value you add. Selling is simple, really. Find out what you do well, and offer it to people who want it. Replacing the 'anybody who'll buy from me' practice requires some effort on your part. Analyze the things you do particularly well, including your product, service, and personal charm. Then go back over your list of existing customers, asking what you liked about them, and what they liked about you. Write down the pertinent information. And use it as your qualifying 'script' - learn to ask penetrating questions, early in the relationship, that reveal the potential for this prospect to become one of your best customers. At BSG, one of the tools we give clients is The SMART Way Prospect Scorecard(TM), a digital scoring matrix that grades your prospect based on how likely they are to become profitable, long-term customers.
Myth #2: Every sale is a good sale. As obvious as it may seem, this particular myth persists in many businesses. If business is slow, if you've got unused capacity or labor sitting around idle, it's all too tempting to accept any business that walks in the door. But is every sale worth it? Not if it's unprofitable or damaging to your reputation.
Mythbuster #2: Good sales bring profit to the seller and satisfaction to the buyer. Now that you have a definition of your ideal customer, add the definition of a 'good sale.' Write down the margin you have to earn to achieve basic profitability, and don't violate it. Add other characteristics that define the 'good' sale, such as evidence of customer satisfaction. Praise sales people when they decline business that is unprofitable or likely to disappoint the customer's expectations. A component of your Prospect Scorecard should be the likelihood that any given sale represents a tangible exchange of value between buyer and seller, and is just as good for you as it is for the customer.
Myth #3: Never take NO for an answer. This myth is one of the most difficult to identify and therefore to uproot. After all, our society prizes this attitude; we build monuments to it. But think about it. Refusing to take "No" goes hand in hand with 'everybody is our customer' and 'every sale is a good sale.' Always remember that a sale is not a one-way transaction. If it isn't right for one of the parties, then it is probably wrong for both.
Mythbuster #3: Don't beat a dead horse. Adopt an analytical attitude. Qualify each prospect, and each opportunity, carefully, to learn if the deal is in fact going to be (a) profitable and (b) satisfying to the customer. Assess the investment costs of continued sales effort, always remembering that your selling time is probably worth $1,000 an hour or more. At some point, the deal passes the point of diminishing returns. Guide your sales people to a more effective use of their time.
Myth #4: There's always time to make more sales calls. This myth comes into play when the sales team is focused on activity instead of results. But it's a dangerous practice. First of all, there isn't much more time left to make sales calls. If the average sales person has only 100 days (900 hours) of selling time in a year, or less, where is that time going to come from - sleep, sick time, vacations, administration? When sales people go after the wrong prospects, pursue unprofitable projects, or waste time on unproductive activities, then more sales calls may not equal more sales.
Mythbuster #4: Make scarce sales time count. The best way to dismantle this belief is to reinforce the investment value of sales time. Remember the investment value of one hour of selling time - $1,111? Now add up the cost of an hour of nose-to-nose time, plus travel time, gas, tolls, parking, literature, coffee, lunch. Now the cost of that sales call is somewhere north of $1200 and rising. What would happen if your sales people had to requisition that money in cash, every time they went out on a call? They would get very discriminating about the way they invested their time.
Myth #5: Sales people pay for themselves. It's true that plenty of sales people get paid on straight commission, so it seems as if they can pay their own way. But it's not so simple. Sales people may earn compensation from a share of the profits, but their true costs include impact on customer satisfaction, market presence and awareness, lost opportunity and perhaps other considerations.
Mythbuster #5: They pay for everybody. The Sales department funds the entire business operation. So sales people have to do much more than pay for themselves. They have to pay everybody's salaries, fund R&D, underwrite marketing expenditures, and put enough reserves on the books to justify investments in capital equipment. And they can't do that if they don't have the right support and guidance. Replace Myths with Best Practices Selling is probably the most important contributor to business health, even more important than products and services. It's a difficult art to master. So it pays to develop good mechanisms to support and guide the sales effort.
Here are five Best Practices that help sweep away the myths and make the Five Mythbusters come alive. They are:
1. Create an Ideal Customer Profile. Develop this profile on customers with whom you have had success in the past. Detail not only the facts (demographics, company size, annual revenues, SIC codes), but the qualitative characteristics as well, those elements that represent the value they seek when doing business with your company. If you really want a powerful profile, use the SMART Way Prospect Scorecard.
2. Set Clear Expectations. Give your sales people clear and quantifiable performance expectations for all stages of the sales process. Don't simply throw a quota and a territory map at them. Tell them you expect them to convert so many leads to suspects, suspects to prospects, prospects to contracts, contracts to repeat business. And follow up with them.
3. Track Performance and Share the Data. Stop managing your sales force by anecdote, those traditional sales meetings where each sales person fills up time telling about why this or that deal hasn't closed yet. Instead focus on collective performance against those expectations you laid out above. Build sales meetings around a review of the data. Now you're dealing with facts.
4. Work on the Process to Improve Results. If sales are down this month, don't panic. Instead, examine the underlying processes to see where the slowdown occurred and why. Maybe sales are down because there's an operational glitch, or an unexpected trend in the local market.
5. Give Great Support. Everybody likes nice bosses better than mean bosses, but great sales support means more than that. It means removing obstacles to performance wherever possible, smoothing the way, and leaving people alone when that's appropriate. Go over your selling process to see if you can spot any of the Five Myths at work. If you find them, replace them with better practices. Now you are on your way to achieving great sales performance, and sustaining it.
Ellen Bristol is the founder and driving force behind Bristol Strategy Group, the Miami-based sales-force productivity company, and developer of Selling the SMART Way®, BSG's flagship solution for productive sales teams. BSG's latest offering is the SMART Way® Alert System, web-hosted toolkit for managing sales-force productivity. Visit the BSG website http://www.bristolstrategygroup.com, email her at ellen@bristolstrategygroup.com or phone 305-935-6676.
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