FEATURE | SALES STRATEGY
SO, YOU’VE NO ROOM TO GROW…
...or have you? Asks PETER COLMAN in his second article on behavioural economics in sales management – reacting to biases to grow profits
W
hen we ask companies about uncovering new markets and customer segments, we often hear the reply, “We know everyone in our market”, especially in mature sectors. While sometimes true, it can often be an example of “overconfidence bias” from within sales teams – and we regularly surprise them by highlighting the amount of untapped sales potential available. Though we all like to think that we are rational, studies of behavioural economics show that we are heavily influenced by biases like this, which can cause poor decisions and actions. As a top-line focused consultancy, we at SimonKucher conduct many commercial excellence programmes every year. In my previous article
‘WHO ARE WE DESC R I B I N G ? ’ AND THE DANGE R S O F DEMOGRAPHIC SEGME N TAT I O N As a fun example in our value selling training we ask the participants to guess who this description refers to: “He is male, 69 years-old and was raised in UK. He is married and has two children (who are now both adults themselves). He lives in a castle. He is both wealthy and famous.” Who are we talking about? A couple of bright sparks usually guess Prince Charles. When we reveal Ozzy Osborne as the mystery man, it usually gets a few laughs. That same demographic segmentation fits both though – and no doubt others – and therein lies the danger of demographic segmentation. It makes it very hard to target customers effectively.
22 WINNING EDGE
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(Following the money,Winning Edge, No 2 2018) I covered sales incentives. This time, I focus on sales strategy and how firms approach their markets, segment their customers and define their territories in their search for revenues. Once again, I will explore barriers that can prevent them exploiting their full market potential – and some practical ways to overcome these.
#1 “We are clear on our objectives” (Groupthink)
If you are going to have a clear sales strategy, you need to understand what you are aiming for (ie. you need to set clear objectives). Pretty straightforward stuff so far. Probe a little deeper though and the story is not always so clear-cut, especially if trade-offs related to a particular course of action have not been discussed. For example, in one of our projects we asked the sales leadership team the following trade-off question: “If in two years the overall number of customers was lower but revenue was higher, would this be seen as a success?” The group was pretty much split down the middle, with four people saying it would be a success and five people saying it would be a failure. Now, if we had asked this during an open meeting, we suspect we would not have had such differing opinions. Once one or two strong characters voice their opinion it becomes harder for others to take a differing position. Instead, to avoid this “group think” bias, we asked the question blind, so each respondent was unaware of, and ISMPROFESSIONAL.COM
01/10/2018 09:09
