September 24, 6:42 pm

The six steps to making a sale

Bad salespeople are a dime a dozen. Good salespeople know that the best success comes by using a structured approach. Many variations exist (mostly in terminology), but the basic structure is the same. What follows is how I describe it and teach it to my clients. But before I start, let me emphasize that unless a customer says “where do I sign?” taking shortcuts in this process will reduce your chances of securing a sale.

1. Prospecting. Commonly associated with the first phase in mining operations, the term prospecting comes from a Latin word meaning “to actively look.” And, to be successful in sales one must actively seek people with a need for whatever product or service you’re selling. This requires initiative, good time management, and an ability to handle rejection. You also need to be looking in the right places or you’ll waste a lot of time spinning your wheels.

2. Assessing. Once you find someone who could benefit from your product or service you need to learn about their situation. Sometimes called “qualifying,” this step requires genuine listening on your part as you work to truly understand your prospect’s needs. This includes asking good exploratory questions as well as good clarifying questions. I can’t emphasize enough the need to spend a lot of time on this step. Shortchange your time here and you’ll be shortchanging your pocketbook.

3. Presenting. This is what most people think of when we talk about sales—giving a demonstration of how your product or service meets the needs of your customer. It comes after the Assessing phase because until you actually understand your customer’s situation, you won’t know how to tailor your presentation to show how your product or service meets your customer’s needs.

Flexibility and adaptability are key in this step. Your product may have 50 features and benefits that you’ve memorized, but if the customer brought up only six or seven that are areas of concern and you still cover all 50 points in your demonstration, you can easily overwhelm your customer. You don’t need to cover everything. Highlight the key points that are of concern to your customer and maybe a few more.

4. Handling Objections. Do not be afraid of objections, for they are a normal part of any sales process. When a customer presents an objection it is merely because he or she has a question that you haven’t addressed yet. That said, the easiest way to prevent objections is to spend more time asking questions in the Assessing step. The more time you spend there the easier it is to tailor your presentation so that objections are not raised.

One process that works for many types of objections follows the acronym CIC, which stands for Cushion, Isolate, and Commitments. Cushion means to provide a little time and some emotional space. People don’t mind buying something they need, but they dislike being sold, especially with high-pressure. A little time and emotional space helps a customer feels safer (i.e., not pressured). Second, isolate an objection by asking clarifying questions so that you understand it very clearly.

Then, after you’ve isolated the objection, explore your customer’s commitment to the purchase. In a very general way, it might sound like “if I can address this concern to your satisfaction, is this the product/service you want to buy?” Your wording on that will change depending on your situation and industry, but you get the idea. In one way or another you need to ask for commitment.

5. Closing. If you’ve done a good job up to this point, then closing should be merely a formality. In other words, if you spent a lot of time discovering your client’s needs and then showing how your product or service meets those needs, then a simple question such as “when do you want us to do this for you?” will close the sale. However, feel free to float trial close questions along the way, such as “how many would you need?” or “would you prefer these in green or in red?”

The important thing is to not give up too soon. Studies have shown that customers will say “no” six or seven times before they finally say “yes.”

6. Following up. Too many salespeople believe that once the customer signs the papers, the sale is done. In truth, a long-term relationship can result in multiple purchases plus multiple referrals. Therefore, make sure your customer gets his or her order delivered correctly and on time, and take initiative to help fix any problems that might come up—don’t just pass them off to someone else in your organization. It’s much easier to keep a current client than it is to get a new one, and referrals are a gold mine all by themselves … but that’s a topic for another column.

PS – If you would like to take an assessment to find out how well you know the above steps (and find out where you need to improve), just email me or call the number at the top of the page. I’ll cut you a 30 percent discount on the assessment and even toss in a 100% satisfaction guarantee.

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September 8, 2:36 pm

Sales fundamentals are still essential

I know that business over the next 20 years will not look like it did for the last 20 years. And I know that customers are more diverse, and that change is happening about as fast as Ashton Kutcher gets followers on Twitter. But I also know that when it comes to making sales, the basic fundamentals never change: The customer has a need, and a sales person’s job is to first discover that need and then help the customer see how his/her product meets that need.

If you don’t know how to identify a customer’s need, you’re not going have much success in sales. When companies hire me to screen their sales applicants, one thing I do is have each applicant role play selling me a watch. It’s pretty hard to make it to the second interview if the applicant doesn’t ask any questions during that simulation, but rather starts telling me how great the watch is that he has for sale.

Many people who are new to sales use this talk-talk-talk “product-focused” approach. They often get into sales because they’ve been told “you have the gift of gab – you should be in sales!” The problem is that—at least at the outset—nobody cares about your product nor how enthusiastic you are about it. Customers care about the problems they’re facing and how to get them solved. What they really want is for someone to truly understand those problems and help them come up with affordable, workable solutions.

Therefore, the first essential skill in successful sales is asking appropriate questions and listening so that you can truly understand. People with this skill have their antennas in “receive” mode, not “send” mode. They proactively explore the client’s concerns, ask a lot of questions, seek clarification, and take a lot of notes. Sometimes they realize right away that their product is a perfect solution to the problem they’re hearing, but they don’t go there right away. They know that customers want to be sure that whatever solution is offered, it addresses the customers’ specific problems, and that usually won’t happen until after an appropriate dialog occurs.

Instead of “product-focused,” think of such selling as “customer-focused.”

One technique I teach to help sales people acquire this skill is open-note mind-mapping, and it works like this: When you meet with a client (or prospective client), open a notebook and start taking notes, letting the client see everything you write. You don’t need to make a big deal about it, the point is don’t try to hide what you’re writing. Essentially, the process is to “mind map” all the issues the client is concerned about. You can use the mind map as a springboard for asking clarifying questions and recapping everything along the way. Doing so not only helps you better understand the client’s needs, it builds trust by showing the client that you’re truly listening.

To illustrate the power of this method, one sales rep for a software company came to me complaining about his lack of sales. The software he sold was expensive (running between $20,000 and $45,000), and although his boss told him he’d be happy with three sales a year, the man hadn’t made any sales after nine months on the job. After learning the open-note mind-mapping method, he made a sale on his very next presentation. He later told me that twenty minutes into his mind-mapping, the CFO of the organization stopped the conversation and said “You’ve got the sale. You are the first sales rep to come in here and truly listen to our needs.”

That’s not going to happen every time, but most sales reps report an improved closing average when they use the technique, and a decrease in sales when they forget to do it.

Something to watch out for is using the Customer-Focused approach only halfway. In other words, you start out listening well enough, but you get excited when you realize your product is a perfect fit for the client’s situation and you switch too soon from “receive” mode to “send” mode. Think of it as taking a bite of piping hot pizza as soon as it comes out of the oven. It looks so perfect and it’s going to fix that hunger you’re feeling, but by moving too soon you burn the roof of your mouth. After that, it’s hard to enjoy the rest of your meal.

You can also think of it as throwing a football. If you don’t release at just the right time, the pass can be intercepted or knocked away. The idea is that if you talk too soon about how your product addresses the client’s problems, you reduce the chances of making the sale.

So, the essential fundamentals of good selling start with listening and understanding. We can talk about how to move through the rest of the sales process, but that will have to wait for another column.

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August 17, 12:59 pm

The Relationship of “Purpose” to Long-Term Success

To truly succeed, you need a clear purpose. Yet too often a quest for money and short-term success gets in the way. The dangerous practice of “focusing on the money” has long-lasting, negative ripple effects to your workplace—as well as to your community as a whole.

In August of 2006, three executives at Comverse Technology Inc. failed to learn the lessons of the Enron scandal. They were charged with falsifying and manipulating data to increase their stock options.  Also that year, Thomas Coughlin, the former number two executive at Wal-Mart, was sentenced to 27 months of home confinement for felony theft and wire fraud.

These high profile people had so much going for them—including plenty of income—but they suffered loss and disgrace because they focused more on money than maintaining a clear, moral purpose.

Straying away from a clear purpose happens everywhere. Think about places you’ve worked. If managers take credit for ideas generated by co-workers, it’s not long before people stop sharing ideas with them. Or, if we take shortcuts to get ahead, it’s very easy for our reputation to get tarnished. In general, we don’t like doing business with people or organizations when they take shortcuts on integrity.

So how does purpose relate to long-term success?

Nikos Mourkogiannis, author of the book Purpose: The Starting Point of Great Companies, outlines four leadership ideals that inspire companies to long-term success. Mourkogiannis calls these ideals “moral purposes.” He writes “moral purpose is where the big money is. Most stories about wealth creation and success are far easier to understand when we recognize the part that moral purpose played.”

The four areas of moral purpose as identified by Mourkogiannis are:

Altruism: Care for the staff / Care for the customers
Heroism: The drive to win and to achieve
Excellence: The pursuit of quality
Discovery:  An attempt to approach each situation freshly

Mourkogiannis writes,

“When no clear moral purpose is articulated, a company acquires a de facto amoral purpose: Expediency. It then becomes the kind of company that professes, ‘We are here only to make money.’ This can be very successful in the short run, but companies without a clear moral purpose cannot endure; they do not survive the changes they will face in their markets or business environments.

It may seem counter-intuitive, but when success for the sake of success becomes our focus, the chances of long-term success are greatly reduced.

Have you identified your clear, moral purpose? It may not result in flash, glitter, and fame, but adherence to your clear, moral purpose will be your path to long-term success.

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August 3, 5:42 pm

Take time off because it’s the smart thing to do, not because the government says to.

I recently watched a video on BNET entitled Take Back Your Time, with the guest advocating mandatory two weeks paid leave after one year of employment in the United States.  The guest on BNET’s The Live One vidcast was Joe Robinson, author of Don’t Miss Your Life: Find More Joy and Fulfillment Now and also Work to Live. Robinson was a driving force behind the Paid Vacation Act of 2009 (which failed to make it to the floor of Congress).

Robinson says many people agree with him that there should be a law forcing people to take two weeks of vacation annually (employer paid).  He cited his own youth when his dad took the family for two weeks of vacation but then as an adult Robinson found he wasn’t taking that time off like his dad did.

Robinson also cites various studies that back up the health benefits of taking two weeks off each year (there are many).

Lindsay Blakely, a senior editor at BNET, questioned whether a mandatory law was the best way to achieve this Robinson’s motive, which is (apparently) to help people live more balanced lives.

Robinson responded by pointing to successful CEO’s who felt totally worthless two days after they retired. He stated that people need time to get more balanced in their life and not just let their work define who they are.

While I agree with Robinson’s perspective that we need balanced lives and I believe his data about the many health benefits one gets from taking two weeks off work, I prefer to educate people and let them take responsibilities for their own lives.  Robinsons approach turns the government into a nanny, forcing people to do things “for their own good.”

In the BNET vidcast, Robinson pointed to countries such as France (with five weeks of mandatory paid time off each year) and says these places have seen the wisdom and have gotten it right.

What he doesn’t say is that in France, most people are self-employed and have no employees because they don’t want to be forced to pay people five weeks vacation each year PLUS all the value added taxes on top of it. Think “independent contractor” and you’ll understand how most of the work gets done in France.

Robinson has an excellent message — We need time off! But unfortunately, he continues to push for the Paid Vacation Act.  I applaud him for being an advocate for living a balanced life and educating people along those lines, but I’m against giving the government more nanny powers, burdening us with yet more regulations. So enjoy Robinson’s books and yes, take time off; but do it because it’s the smart thing to do. It’s not the government’s job to mandate what we do with our lives.

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August 1, 1:29 pm

A training conundrum: How to lose money when you’re saving money

If you shortchange new employee training you’re throwing away a lot of money. I’m talking thousands of dollars – possibly tens of thousands – slipping away unnoticed.

The mistake comes when managers think they’re saving money and time by providing only a minimal amount of training when someone gets hired … just enough to get a person acquainted with their job responsibilities. They know that new employees will eventually learn the rest of their job requirements, but they overlook the expenses involved when using that approach.

Here’s an example: Julie (not her real name) was hired into the payroll department of a mid-sized company. When she first started her job her boss spent two hours showing her how to use the software she needed to perform her unique duties. Then he left her to learn the rest on her own, telling her that she would pick up the rest along the way.

That seems reasonable enough, but over the next few days whenever Julie had a question, her boss told her to “just play with it – you’ll figure it out.” After three days of asking and getting the same response, Julie figured out that her supervisor wasn’t going to provide any more help. And, because her position was unique and used a specialized software program, nobody else in the department knew how it worked. She was on her own.

Julie says it was more than six months before she felt competent. Along the way she made hundreds of mistakes, irritated dozens of employees, and spent countless hours fixing all the mistakes she’d made – much of which wouldn’t have happened if she’d had just a little more training.

Today, after being in her position for three years, Julie looks back and realizes how much money was wasted when her boss wouldn’t provide that extra training. “Over those six months I was way less than 50 percent efficient,” she says. “That means that over one fourth of my annual salary was wasted because of my inefficiency, which equated to over $8,000. That doesn’t include the dollar cost of the mistakes I’d made, some of which were huge,” she said. Overall, she estimated her lack of training to be an expense to the company of more than $20,000.

I asked how much it would have cost for her boss to provide her with extra training. “The cost to train me like I wanted would have been less than $3,000” she said. Then her eyes opened wide as she realized that the company wasted at least $17,000 by not providing her with enough training for her to do her job correctly.

Is your company trying to save money by skimping on training? You might want to rethink that!

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July 8, 9:35 am

5 Skills for Being an Effective Manager

by Dan Bobinski

If you’re going to be an effective manager, you better be able to make tough decisions. You also need to be good at communicating appreciation, taking initiative, delegating, and following through with your promises.

Sure, there’s more, but these were ranked as the five most important soft skills for middle managers in a survey conducted by the Center for Workplace Excellence. Input was collected from 268 hourly workers, middle managers, and senior management working in manufacturing environments.

Almost everyone ranked “making tough decisions” at or near the top of their list, but not surprisingly, viewpoints differed after that, depending on where people were on the organizational chart. For instance, front line employees thought it was important for managers to be diplomatic and communicate appreciation, while middle managers placed that skill in the lower 25 percent of their rankings. Conversely, middle managers ranked “customer service” much higher than did the hourly workers.

Senior managers added a different perspective, believing that middle managers needed to be flexible and good at goal setting. Neither the hourly workers nor the middle managers placed either of those skills in the top 50 percent of their rankings.

One skill ranked high by middle managers but low by hourly workers and senior management was coaching and training employees. Greg Sigerson, owner of Wisdom Factor in eastern Idaho, says this skill is vital. “Not only do managers have to communicate clearly what needs to be done, they have to help people understand how they’re going to get it done.”

Sigerson says that people often try to accomplish things but fail because they rely on the same problem-solving skills they’ve always used.

“After people fail at something, they commonly believe they can’t do it,” Sigerson says. “In basic terms, if an employee has five different types of hammers as his favorite tools but the task he’s working on requires a screwdriver, none of the five hammers are going to work for him. As a manager, you must help him see that screwdrivers are available and help the person learn how to use them so he can get to a solution.”

Sigerson is quick to add that once a task has been delegated, the manager may need to step into a teaching / coaching role, but the responsibility and accountability for completing the task stay with the person to whom the task has been assigned.

For more feedback on this list, I contacted Jeff Schmitz, a friend of mine who’s a manager in a company with offices in several states. His perspective added yet another dimension. “A manager must be plugged into the organization’s politics and have the cooperation of senior management,” he said. “If you don’t, you might be effective on the tactical side, but you’ll be lacking on the strategic side.”

He also said an effective manager knows how to make career opportunities happen for his people, or they will seek opportunities elsewhere.

“If a manager lacks the trust, backing, and support of senior management he’s not going to keep his people happy,” Schmitz said.

“This can be hard, especially in a down economy. For example, a manager may go to his boss and say that he found a great person he wants to hire who can really get the job done. But in today’s economy, it’s common for senior managers to say ‘people are screaming for jobs – let’s get him at a bargain, offer him three-fourths of what he’s asking.’ You can’t really blame the owner because he wants to be competitive and is watching the bottom line. The problem, though, is that if the person takes the job he won’t really stop looking for a job because he knows he’s worth more.”

Schmitz stated that such turnover eats up any savings a company may realize by offering the lower salary.

“In my business it takes six months from the time new hires walk in the door to where they’re making money for the company. If you’re not careful, you wind up in a self-inflicted perpetual cycle of training and you’re actually losing money.”

In my 22+ years of training managers plus drawing from my own experiences in management, I find that most companies promote people into management without providing training on how to manage people. Unfortunately, without these core skills, too many managers fail to achieve what they’re capable of.

It seems counterintuitive, doesn’t it? After all, managers are responsible for making sure that tasks get done so shouldn’t companies provide training in project management instead of people skills? My response is we shouldn’t focus on one at the expense of the other. Perhaps ensuring that managers get trained in people skills is just one of those “difficult decisions” that effective managers need to make.

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June 29, 8:17 am

Feeling smothered by government regulations?

Buckle in, here comes yet another bend in the road.  The “Interim Final Rules” (an oxymoron by itself) for the Patient Protection and Affordable Care Act (commonly known as Obamacare) have just been amended.

According to a newsletter by Anne Wilde, an employment and ERISA employee benefits attorney and principal at The HR & Benefits Advisor, the amendment was announced on June 22.  In her Workplace Advisor newsletter (read it here) Wilde tells us “the U.S. Treasury Department, the Department of Labor, and Department of Health and Human Services collectively released an amendment to the original interim final regulations.”

Oh, goody.

If you’re in business, you already know that much of the well-intended government “help” we get is really hurting American businesses.  It would be beneficial if the policy wonks setting up the rules they foist upon us had a bit of business experience, but instead we are “managing up” and having to teach policy-setting bureaucrats the nuts and bolts of reality … while suffering with their policy blunders along the way.

This is evidenced in Wilde’s report, in which she states the aforementioned agencies “amended the rules after numerous commenters argued that the original rules included unworkable requirements and inadequate timelines for compliance by plan sponsors.”

Both my blog and my syndicated column are about workplace issues. Granted, the topic above is more of a business issue than a workplace issue, but the spillover is impossible to ignore. Over the past two decades I’ve watched my clients’ workplaces become increasingly burdened with compliance on business regulations. Personally, I’m glad we have people like Wilde to interpret things for us, but I’m seeing more and more business owners feeling smothered, and I think it’s time to speak up.

Interim final rules?  Amended interim final rules? How many more qualifiers will be added? How many more burdensome regulations will be added? Given our recent history, the “final rules” will never be final, and complying with the increasing influx of business regulations is nothing but expensive overhead and a wet blanket on the economy.

While you’re busy slogging through all the changes forced upon you, why not speak up about how all this “help” is really hurting your business. The governor of my state recently said the reason the federal government keeps encroaching on us is because nobody pushes back. Hmmm. Perhaps it’s time that business people be even more vocal and start pushing back.

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