feb 4TH 2009 / Issue 17
Setting Sales
Targets 3 Common Mistakes To Avoid
E C RI
P R
oo ! t h is ig
U YO
$
h
se s o thion h it ject w l ob
a de tol price w u ho inf pa
Encouraging
Your Reps
To Add Value
The 5th Annual Summit
27 & 28 April 2009, Rendezvous, Auckland
Create a motivated and resilient sales team to succeed in uncertain times Recession affecting your sales targets? Struggling to keep your team motivated? Don’t despair! Get some new inspiration and renew your leadership confidence at this year’s Sales Managers’ Summit. Packed with case studies from successful Sales Executives Icebreaker
REGIS TER N SAVE $ OW 300 with o ur
Fonterra Brands (Tip Top) Majestic Global NZ
Early Specia -Bird l. er and p
OfficeMax
Regist
Oxfam Gen-I
ay 16 Mar before 5.00p ch 200 m 9
Rockwell Automation » Click here to view full agenda & registration details
Brought to you by:
A key event for all Sales Managers, Key Account Managers, Marketing Managers, Business Development Managers and all those that want to reach the top in sales management in today’s challenging economy
FEBRUARY 4 th / Issue 17
UR O Y
E
RIC
P
oo ! t h is ig
$
h
5 THIS WEEKS MUST READ YOUR PRICE IS TOO HIGH How to deal with those painful price objections.
e os s thion h t t i ec l wobj
a de tol price w u ho inf pa
5
8 setting sales targets Three key mistakes to avoid. 10 NZSM CALENDAR
8
11 TWO MINUTE TOP-UP one idea per customer Encouraging your reps to add value. 12 BOOK REVIEW how i raised myself from failure to success in selling A business classic, this book is for anyone whose job it is to sell. Whether you are selling houses or mutual funds, advertisements or ideas -- or anything else -- this book is for you.
11
13 SALES TRAINING DIRECTORY
12
14 THE CLOSE
NZSM / feb 4TH 2009 / 3
2
009. In Chinese Astrology this is the Year of the Ox, which symbolises prosperity through fortitude and hard work. After the giddy ride of the last few years to the top of the economic boom, and the traumatic burst of the bubble over the last 9 months, this year is a time for strength, stability and modesty. As anyone who did economics in fifth form will know, our economy (as with everything in life) is in a constant state of flux. It goes through cycles of growth and decline, boom and bust, just as nature dictates that night will always follow day, and autumn and winter will always follow summer. Regardless of the events precipitating the economic winter we find ourselves in now, the important thing for us all to note here is that this is no more than a continuation of the natural business cycle, although it still caught most of us by surprise. Yes, we should acknowledge that we are in what the economists refer to as a “recession”. Yes, we should acknowledge that many of our customers may have
less cash available to spend on our products and services. There’s no denying it and we can’t do much to change it. Insisting on wearing your Speedo’s in the middle of August will not change the fact it is winter – you’ll just die needlessly of hypothermia. But what we can all do is decide how we are going to react to these circumstances. As individuals, as families, as businesses and as communities, the one thing we can control is our attitude towards adversity. Some say that adversity brings the best out of Kiwi’s so let’s take note from our companion the Ox and commit ourselves to a year of hard work, practicality, and the determination to get ourselves ready for the economic spring that is sure to follow. For us at NZ Sales Manager we’ll be introducing several exciting new features this year, and look forward to helping you make the most of the sales opportunities that come your way. It’s great to be back!
Richard
ABOUT /
EDITOR / Richard Liew
POSTAL ADDRESS /
Short and sharp, New Zealand Sales
ART DIRECTOR / Jodi Olsson
NZ Sales Manager
Manager is a free fortnightly e-magazine
ADVERTISING / Dave Mahony
C/- Espire Media, PO Box 137162,
delivering thought provoking and
ADVERTISING ENQUIRIES /
Parnell Auckland 1151,
enlightening articles, and industry news
Phone Dave on 021 843 040 or
New Zealand
email davem@leapsolutions.co.nz
WEBSITE /
CONTENT ENQUIRIES /
www.nzsalesmanager.co.nz
and information to forward-thinking sales managers, business owners and sales professionals.
Phone Richard on 09 523 4112 or email richardl@nzsalesmanager.co.nz.
NZ Sales Manager is an Espire Media publication
NZSM / feb 4TH 2009 / 4
T H I S W EE K ’ S M US T R E A D
Your Price Is Too High! C
ost down and commoditisation is a relentless reality of the globalised, information driven world in which we live. We need to change the way we sell if we are to overcome the daily challenge of buyers saying, ‘Your price is too high…’
$
$$ \\ How to deal with
those painful price objections.
By Paul Newsom
I recently attended a CIPS (Chartered Institute of Purchasing and Supply) forum where a panel of ‘experts’ debated the current state of procurement in NZ. While this was a fairly chaotic debate to say the least, one member of the panel commented that procurement in NZ is relatively unsophisticated. There are simply not enough large companies here who are of the size where strategic procurement is viable. I tend to agree and also came away thinking that their message was that ‘cost down’ is pretty much where it is at. ‘No surprises there’ you might be saying. A few months have since passed and the credit squeeze is affecting business. Projects are being put on hold and buying decisions moved up to senior levels as companies ride out this period of economic uncertainty. The consequence for many sales people in these times is that selling becomes all about the price. If the talk around your coffee machine is ‘we are too expensive’, and ‘we can’t compete on price’, then read on, as it is likely to be a symptom of how you are selling rather than what you are selling. Do your buyers turn straight to the “sports pages” at the back of your proposal to see what the price is? NZSM / feb 4TH 2009 / 5
I often find that when sellers complain that ‘it is all about the price’, all too often it is all about price because they are only competing on price! Price is the easiest criteria for people to use in the buying decision. Price comparison is quick and something we all understand. When the features of competing products look the same to the buyer, price quickly becomes the primary factor for
the buyer to consider. I see many proposals and quotes where the only criteria given for the customer to decide on is price, yet sales people complain that it is all about the price! Discounting then starts (what else is there to talk about?) and continues until the customer says yes. If this is you, in the long term you can’t win. Someone will always drop their pants on price lower than you are prepared to.
Why is the ‘price too high’?
won’t pay for it.
When the buyer says ‘the price is too high’ it will generally be for one of five reasons:
Whole books are written on this. Here’s step 1 in two sentences. First understand what issues and problems your customers would have in the absence of your solution.
1. You have quoted the wrong thing to meet the need 2. You have not understood how and why the customer buys 3. The value of the benefit of your solution/product has not been understood 4. They do want to buy from you, but want to feel they have got a discount 5. Your price really is too high.
Only when you can quantify this, will you be able to begin to define value in a way that will be understood by the customer to the extent they are prepared to pay for it.
4. Buyers want to get a discount
1. You have quoted the wrong thing to meet the need.
Many buyers like to feel they have to get a discount each time they buy (like me!). The problem for the seller who discounts is that if you offer a discount the first time, the customer will be expecting a discount the next time they buy. Your first price is then never the real price.
It’s an old cliché but offering a Rolls Royce when the customer needs a Mini is just plain bad selling. You won’t win this time and probably won’t be invited back. Your customer will not trust you. If you don’t have the right solution for the customer, then say so. If you can, recommend where they will find the right solution.
You must either understand the opportunity well enough to know that your first price is your best price and will win, and make sure the customer knows that it is your only price. Alternatively be prepared to manage the expectation of discounting for the life of the relationship.
Let’s take a quick look at these:
2. You have not understood how and why the customer buys. Understanding the buyer motive is a widely taught selling skill, yet when in front of the customer, it is often done in insufficient detail. In your eagerness to make a sale, the trap is to present the solution far too early – so the customer judges you on price only. Put the customer’s needs ahead of yours, start listening to your customer and stop talking.
3. Your value is not understood. You have a solution that is differentiated from your competition, yet the customer doesn’t ‘get it’, and
Before rushing to discount until the customer says ‘yes’, pause for a moment and find out what ‘too high’ means. Too high compared to what?
5. Your price really is too high If there are lower priced alternatives in the market that offer the same or more value, and the customer does not value the relationship, then the product is commoditized in the mind of the customer. Your price really is too high. The best advice is to fix it or go and sell somewhere else. For top sales people, price is rarely an issue because of how they sell. You will notice that reasons 14 above are fixed by how you sell.
NZSM / feb 4TH 2009 / 6
Keep off the price at your peril! Many sales training manuals will advise to keep off the price until everything else has been discussed and agreed, yet many buyers want to get quickly onto price. Put yourself in the buyer’s shoes for a moment. When you are buying you want to know what the price is don’t you? How do you feel if you can’t get to the price, or the sales person won’t tell you the price? You become suspicious. You lose trust, are likely to be put off and go and talk to the next supplier. So don’t do it to your customer – if you do, price will become an issue before you want it to. When asked about price, you have to manage expectations around price, rather than sidestep the customer’s question. Bear in mind that as part of your qualification, it will be in your interests to set a price expectation early on so that you are not wasting your time. If the customer is only prepared to shop at The $2 Shop, then it is best to find this out early in the piece and let them go to The $2 Shop. (I have nothing against The $2 Shop, and buy there regularly myself for those squishy balls etc you find on the table at training sessions!). If you have a solution of value and you want the customer to pay for this value, then manage these expectations by
quoting a reasonable price range that is based on what you know at the time. Then qualify this with a comment such as ‘I expect it will be significantly less than the cost of the problem’, or ‘it will be a small investment to solve what seems to be a major problem for you’. Get agreement before you proceed. If you’ve had the conversation about price early on, price is less likely to be a big issue at decision time. It is true that as the sale becomes more complex, getting on to specific price too soon will result in you being judged on price alone and value will be left on the table. Being able to answer the question with credibility requires good consultative selling skills. In summary, price will remain an issue for the self serving sales person who is focussed only on their own interests and when the sales conversation does not go beyond the product or service they are selling. When top sales people stand in their customer’s shoes, understand their business, help them to make good buying decisions, and differentiate their product or service, company, and themselves from their competitors, then price is rarely an issue.
Paul Newsom is Learning & Development Manager for the Rev Sales Network, a nationwide personal and professional development network for sales professionals. Visit www.rsn.co.nz for more info.
NZSM / feb 4TH 2009 / 7
Setting Sales Targets \\
Three Key Mistakes To Avoid By Kirrily Dear
A
t this time of year a lot of businesses are revisiting their sales goals and target. We thought it would be timely to share the biggest mistakes we see businesses making when it comes to sales planning. Mistake 1: Accelerated Growth Rates In this context, your growth rate is the percentage change in your turnover each year. If you have a turnover of $100 000 in 2007 and then $120 000 in 2008, your growth rate is 20% / annum. One of the biggest mistakes business owners make is setting unrealistic growth rates for their business. For instance, consider the following data. Historically the business has achieved: * 2003 = $50,000 * 2004 = $70,000 * 2005 = $100,000
* 2007 = $550,000 * 2008 = $1,200,000 On the surface these figures may look reasonable, just a few $100,000 here and there. However, the growth rates tell a different story. * 2004 = 40% * 2005 = 42% * 2006 = 100% * 2007 = 175% * 2008 = 118% It’s not so much that these growth rates are impossible but you must seriously question how a business is going to go from a growth rate of 42% to 100%+ in just 12 months. Most business owners setting ambitious sales goals don’t think through this in enough detail and fail as a result. But shouldn’t sales gobals be ambitious?
Then they start planning sales goals for the future: * 2006 = $200,000
A lot of management books push business owners to “shoot for the stars” when setting goals for their business. NZSM / feb 4TH 2009 / 8
We disagree with this mindset when it leads the business owner to set goals that lack a pragmatic foundation.
be a fundamental shift in the way you are generating sales for there to be a significant increase in sales.
Substantial growth is possible but you have to carefully plan how it will happen. What’s going to give you the leg up? More Sales staff? A merger with another business? A new contract? Better facilities or more warehouse space?
Once you have clear and practical sales goals for the year, you then need to do a gap analysis. That is, look at the difference between what you want and what you’ve got, to determine what changes are required to achieve those sales levels. Perhaps you need a better system for generating leads, or more products and services to sell or perhaps better internal administration. Then take these changes and break them down into specific steps and allocate a completion date and person responsible for each step.
Be very careful about setting your business on a course for substantial growth. It will most likely put your people, cashflow and other resources under enormous pressure. Failure to achieve the goals can be devastating to the business, your credibility and the confidence of the people within the business. From our experience, you are likely to be more effective setting more conservative, well considered goals. We call this “setting yourself up for a win”. After all if you achieve them quicker than expected you can always set new ones! (Of course, you only set new ones after you’ve celebrated your win!). Taking this approach leads to business growth being a more enjoyable and rewarding journey for all involved.
It needs to be clear who is accountable for sales performance in the business and what that specifically entails.
What growth rates are reasonable? The level of growth that is considered “reasonable” will vary depending on the age of the business, industry and how well it is run. New businesses can have amazing growth rates because they’re working from a small base. Some of the large, heavy industrial corporations rejoice when they get growth of 15%.
Mistake 3: Lack of Accountability
Also it depends on what industry you are in. For instance, aged care at the moment is booming so you can expect most businesses to have strong growth rates whereas other industries are in decline and growth is incredibly difficult to achieve.
A lot of activity is required to achieve sales growth. Nobody ever achieved sales growth by just sitting around and thinking about it. Clearly specify what type of activity you want to see; client visits, speaking gigs, mail outs, quotations, follow-up phone calls etc.
Mistake 2: Lack of Change
Then set levels for each activity, for instance 3 client visits per week. These are commonly referred to in planning as KPI’s or Key Performance Indicators. Your aim in implementing KPI’s is to give people a structure to work within, to help them manage their own activity and know what they are meant to be working on. This ultimately enables everyone to be more productive.
The old axiom “To get a different result you need to do things differently” is highly applicable to the process of increasing sales. Sales growth generally doesn’t happen purely through working harder. You’ve got to work smarter. There needs to
This is particularly an issue when there are more than one or two people in the business. It needs to be clear who is accountable for sales performance in the business and what that specifically entails.
Kirrily Dear is the founder and Development Director of Australian marketing, management and strategy consultants Eyes Wide Open. Visit their website at www.eyeswideopen.com.au. NZSM / feb 4TH 2009 / 9
WED 4 FEB
Sales Skills One Essential Sales Skils Zealmark Group Auckland
NZSM CALENDAR SAT 7 FEB
MON 9 FEB
FRI 13 FEB
TUE 10 FEB Workshop – How To Cold Call & Have Fun Top Achievers Sales Training Auckland - East Sales Basics Seminar Geewiz Wellington Sales Skills Two Essential Sales Skils Zealmark Group Auckland Sales Skills Level One EMA Auckland
SUN 8 FEB
SAT 14 FEB
Professional Selling Skills Core AchieveGlobal Auckland
FRI 6 FEB
THU 5 FEB
MON 16 FEB Key Account Management David Forman Auckland
WED 11 FEB
THU 12 FEB
Advanced Serious Selling Richard Gee Wellington Professional Selling Skills Core AchieveGlobal Auckland Advanced Serious Selling Geewiz Wellington
Exceeding Customer Expectations Geewiz Wellington Professional Selling Skills Core AchieveGlobal Auckland Advanced Serious Selling Geewiz Wellington
WED 18 FEB
TUE 17 FEB Workshop – Networking Top Achievers Sales Training Auckland - East
Advanced Serious Selling Geewiz Auckland
Key Account Management David Forman Auckland
SUN 15 FEB THU 19 FEB
FRI 20 FEB
Excellence in Sales & Marketing SMINZ Auckland
MON 23 FEB Feb 23-25 Negotiation David Forman Auckland
Exceeding Customer Expectations Geewiz Auckland
WED 25 FEB
SAT 21 FEB
SUN 22 FEB THU 26 FEB Professional Sales Coaching AchieveGlobal Auckland
FRI 27 FEB
Feb 23-26 Sales Develpment David Forman Auckland
SAT 28 FEB
TUE 24 FEB Workshop – Cold Calling & Prospecting Top Achievers Sales Training Auckland - South Sales Basics Seminar Geewiz Auckland Sales Skills Level One EMA Auckland
MON 2 MAR Sales Management David Forman Auckland
Professional Sales Coaching AchieveGlobal Auckland
SUN 1 MAR TUE 3 MAR Sales Management David Forman Auckland
WED 4 MAR Sales Management David Forman Auckland
THU 5 MAR Jamie Ford presents “Are You Tough Enough?” Rev Sales Network Auckland Sales Skills One Essential Sales Skils Zealmark Group Auckland Sales Management David Forman Auckland
FRI 6 MAR SAT 7 MAR
NZSM / feb 4THSUN 2009 8/ MAR 10
TWO MINUTE TOP-UP
One Idea Per Day, Per Customer // Encouraging Your Reps to Add Value By Richard Gee
T
he greatest way to build sales is to get existing sales reps who are calling on existing customers to add value, and help customers make more informed decisions, from their extensive product and service knowledge. A simple strategy to implement with your sales force is called ‘One Idea Per Day, Per Customer’. In every sales team you build your business one customer at a time, one transaction at a time, so following through on this philosophy, show your sales reps how they can add one idea as a suggestion, not an opinion, to each customer at each visit. Gradually over time they will have a reasonable success rate and become confident enough to keep on adding ideas which will increase the range of products purchased. The most important thing is to encourage the customer to make the idea or suggestion themselves, which means you don’t use the words ‘I’ or ‘we’. Instead use the words ‘some of our other customers have’ to introduce the suggestion or the product idea. A sales representative is better known for being an ideas suggestion person than a hard, pushy salesperson. One way to encourage the ideas is to take some of your products or services and encourage the reps to select a particular product or service for that week or the interval between your sales meetings, and get them to brainstorm and write down as many possible methods of communicating an idea or a benefit about that product or service. Then all they have to do is to take one of those ideas and mention it to each customer they call on. The advantage of having different products or services scattered around your sales team is that you will find that at the next sales meeting each one of them will
have had some successes and they will be able to pass on those ideas which worked, and encourage the rest of the team to try them. Sales promotions, where products are featured with special bonus offers, discount offers or special incentives, will always work well as encouragement incentives, but make sure that your sales team has sufficient supplies of leaflets, handouts, or flyers to leave with the customer about the special promotion. Remember that human beings are visual people and like to see pictures, graphics, or visualisation of new products or services. An idea that has a graphic showing how it can be used, or a physical product to actually look at, or an enthusiastic story to show how other customers have used it, is more likely to be listened to. Just consider that if you called on ten customers a day and suggested one idea to each one of them, and had a 50% success rate, at the end of the week you would have added 25 new lines to your group of customers. At the end of the month 100 new lines, at the end of the quarter 300 new lines, and satisfied customers. Where did it all start? Just suggesting one idea, per day, per customer. An idea a day works – how many ideas can you come up with?
Richard Gee is a leading sales and marketing coach, author and seminar presenter. Visit his website at www.geewiz.co.nz.
NZSM / nov 12TH 2008 / 11
R ES O U R C E C O R N E R
How I Raised Myself From Failure To Success In Selling By Frank Bettiger
A
Published by Fireside Books
business classic, How I Raised Myself from Failure to Success in Selling is for anyone whose job it is to sell. Whether you are selling houses or mutual funds, advertisements or ideas -- or anything else -- this book is for you.
When Frank Bettger was twenty-nine he was a failed insurance salesman. By the time he was forty he owned a country estate and could have retired. What are the selling secrets that turned Bettger’s life around from defeat to unparalleled success and fame as one of the highest paid salesmen in America? The answer is inside “How I Raised Myself from Failure to Success in Selling.” Bettger reveals his personal experiences and explains the foolproof principles that he developed and perfected. He shares instructive anecdotes and stepby-step guidelines on how to develop the style, spirit, and presence of a winning salesperson. No matter what you sell, you will be more efficient and profitable -- and more valuable to your company -- when you apply Bettger’s keen insights on: - The power of enthusiasm
$29.98 from
- How to conquer fear - The key word for turning a skeptical client into an enthusiastic buyer - The quickest way to win confidence - Seven golden rules for closing a sale
NZSM / feb 4TH 2009 / 12
NZSM / feb 4TH 2009 / 13
“ The important thing is to learn a lesson every time you lose. Life is a learning process and you have to try to learn what’s best for you. Let me tell you, life is not fun when you’re banging your head against a brick wall all the time.
“
John McEnroe
Have you subscribed to NZ Sales Manager? It’s free! Subscribe to NZ Sales Manager and go in the draw to win a copy of the excellent book Kites Rise Against The Wind – Positive and Powerful Ideas to Unlock Your Potential, written by New Zealand’s own performance psychologist and motivational expert Charles Donoghue, this is an essential book for all high achievers and their managers. To enter the draw simply visit www.nzsalesmanager.co.nz and sign up before 5pm, Monday 16th February to get a copy of NZ Sales Manager delivered straight to your inbox every second Wednesday. Winner will be notified by email and published in the February 18th issue of NZ Sales Manager. Subscribe today!
NZSM / feb 4TH 2009 / 14