Does the Prospect Have the Need?

This is a Sandler Weekly Sales Tip from guest poster Shulman & Associates.

The BEST Prospects are motivated by NEED not Price.

The STORY:

Nick sat in his company’s car at the nearby regional shopping mall. Seven o’clock at night, he glumly thought to himself, been on the road since this morning calling on people. Not one lousy sale, couple of nibbles, no closes.

Nick had set out in the morning to call on as many of the “call me back in three months” prospects as he could. He figured that maybe physically showing up might get some interest in what he had to offer.

His first call at seven in the morning was with a small manufacturing plant. Even though the owner gave him two minutes in the outer office, all he heard was “could you leave some literature?”

He left it, thinking to himself as he handed it over that before he sat in his car, it would hit the circular file. The next stop, just down the street, was no better. No one had any time to see him; “leave a business card.” Along with all the rest, he thought.

Fortunately, he thought at the time, I’ll use the car phone to make some calls since I’ve got at least an hour ride to the next stop. With the voice mail, the “she’s on vacation,” and “Does Mr. Smith know you?” typed responses, calling from the car was zero for fifteen.

Nick stopped for lunch and wondered just how those other salespeople in the restaurant managed to “do lunch” with clients and get orders. The two times he had done it, the prospects had a great lunch and promised to get back to him. They never did, and when he called them, they were always “unavailable” or “in a meeting.”

There were 12 stores in the mall that he had been phoning for the past eight months. He figured this would be the best use of his afternoon. At eight of the stores, all purchasing was done out-of-state. The rest all had suppliers and, as one lady manager put it, “We’re absolutely delighted with their service. Never had the need to change.”

There has to be a better way, he thought. Starting his car, he headed back to his condo, hoping tomorrow would be better.

The RESULT:

Nick isn’t going to sell any of these people anything because he has not established if they will ever need what he is selling. They will buy, but they will buy from someone who sees their need and sets up a situation where they express it.

DISCUSSION:

Why do salespeople have a multitude of prospects that they have repeatedly contacted but who have never bought? The old sales adage of “someday they will” is why. Also this type of prospecting activity is considered appropriate by sales managers and upper management. The problem is that occasionally someone does buy with this method.

The basic problem, the fallacy with this thinking, is that this type of sale makes money for the salesperson and the company. If you tracked the amount of time spent in this process, you would painfully find out that the cost of making the sale wiped out the profit. Add up the phone bill, allocate some of the overhead and figure in an hourly rate for the salesperson. Also add in postage and the cost to print the literature. Now divide the net from the sales by this figure. Painful.

So does it make sense to keep doing it?

But someone is saying, “But what else can we do? This is the way we have done it for umpteen years.”

There is another way.

APPROACH:

Understand that if you are calling the appropriate prospects for your product, that someday every one of them will buy that product. While it may not be from you, they will buy. There are, however, a certain number of prospects who will buy within the next two months. You need to uncover them.

What makes them buy within the next two months is not price, but need. If they don’t buy, they will be in pain. Someone in their company, someone at home, or they themselves will suffer unless they have what you sell. These are the prospects you need to quickly find before they go and buy from someone else.

Approaches? By reversing questions, bringing the past and future into the present, by asking questions and waiting for a response however long it takes, by using many of the “prospecting” TACTICS cards, by seeking their needs and not your needs, all of these will uncover those prospects who are in pain and have a need today.

“Call me in a couple of months” is a brush-off.

What’s going to change in a couple of months that causes you to need my product? Nothing? Why should ever call you back and waste my time and my money?

THOUGHT:

There are prospects out there right now, who need to buy what you sell. Sell them!

About the author:

Shulman & Associates is a professional development firm specializing in sales and management training and sales force evaluation. Visit their website to register for a FREE Sales Training Workshop. Learn how to increase sales, improve margins, and accelerate new business development. Lunch is included in this workshop.

To view the latest Sales Tip click on the link below:

WEEKLY SALES TIP

Commence CRM Leapfrogs Competition

Adds Weighted Probability for More Accurate Sales Forecast

The majority of CRM software systems today provide a standard model for reporting monthly and quarterly forecasts. It is based on where each opportunity is in the sales cycle and how likely the sales representative believes they are to win the business. The forecasted amount remains the same unless the representative manually changes it. The probability of winning the business however increases as the opportunity moves through the sales cycle.

Example 1: Considering only Forecasts with a High Probability

In the example below, we have a new business opportunity for $5,000 dollars. As the opportunity moves from the introductory to the proposal stage, the probability that the representative will win the business increases from 20 to 80 percent. Our forecast will show that there is an 80% chance of winning this deal for a total of $5,000 dollars.

Sales Stage
Discovery
Proposal
Probability Percent
20%
80%
Forecast Amount
$5000
$5000

 

 


Using this model, Sales Managers typically report on sales with a high probability of closure. While this approach (based solely on probability of winning the sale) may be suitable for some, it does not always provide management with an accurate representation of the monthly or quarterly revenue the company will realize.

Example 2: Using Weighted Forecast Amounts

Let’s say you are in the office furniture business and you have a new business opportunity for that same $5,000 dollars. You are in the proposal stage and give it an 80% probability of winning the sale, but this opportunity is a bit different. It is a sale for five new desks, five new chairs, and three bookcases. You are pretty confident that you are going to win the sale for the desks and chairs, but the bookcases are a ‘nice to have’ and the client has expressed a reluctance to buy them. In example one, you have given the sale an 80 percent chance of closing for the full $5,000 dollars, but this is no longer accurate. The bookcases are $1,000 dollars and the client indicated they might not purchase them so unless the sales representative manually goes into the system and changes the dollar amount to $4,000 dollars you have an inaccurate forecast.

Commence CRM provides you with the ability to use a weighted average for the sale and calculates the dollar value for you.

Sales Opportunity Detail in Commence CRM

In this example, 80% is the weighted average for the actual dollar value of the sale (i.e the percentage of business you expect to win). A weighted average of 80% on a $5,000 sale is, you guessed it, $4,000 dollars. The system automatically lists this as the forecasted amount and updates the reports and sales funnel resulting in a more accurate representation of the company’s monthly and quarterly revenue.

Sales Stage
Discovery
Proposal
Probability Percent
20%
80%
Forecast Amount
$1000
$4000

 

 


What’s nice about Commence CRM is that each new opportunity can be managed the way you prefer, some based solely on probability of closure and some on weighted average.  Very few CRM solutions offer this level of functionality for sales.

About Commence:

Commence Corporation is a leading provider of CRM software for small to mid-size businesses.  The company offers a robust suite of business applications that rival enterprise level products costing much more.  Capterra.com and Business-Software.com recently listed Commence CRM as one of the “Most Popular” CRM products in the industry.

Any advice for a sales person in this economy?

This is Sales Question and Answer #50 from guest poster Dave Kahle, author and leading sales educator.
sales-advice-economy-down
Q.  Any advice for a sales person in this economy?  It seems like almost every customer is saying that they are cutting back and delaying spending.  How can I get them to loosen the purse strings and buy?

A.  Great question.  I’m sure this change in the economy and your customer’s reactions to it are very frustrating.  I have several ideas.

First, step out of your day-to-day world and take a big picture, 10,000 feet high view.  Let’s not think about your customers, for a minute.  Let’s think about your territory.

How much market share do you have in your territory?

Here’s a way to calculate that with some degree of accuracy.  Identify all the customers and potential customers (prospects) in your territory.  Then ask, “If they bought everything they could from me, over the next 12 months, how much would it be?”  The answer will be a dollar figure.

You can just estimate the answer, but you’ll find it more effective if you base that estimate on some quantifiable measurement.  Find something that is measurable about them, like the number of employees, or the square foot of display space, etc.  This kind of information is easily purchased.  Then create a formula.

For example, you may be selling industrial supplies to manufacturers.  How much, per employee, does a typical manufacturer spend on your category of product?  Once you develop that formula, it’s a simple matter of multiplying that times the number of employees in each account.  The result of this little calculation will be the answer to the question above.

Regardless of how you come to the number, you need to develop a measurement of approximately how much business there is in your category of product in your territory.

Now, how much business are you currently doing this year?  In other words, what is the total dollar volume of sales in your territory?

Compare the two answers and express that as a percentage.  For example, if there is $10 million dollars of potential in your territory, and you are doing $2 million, you have a 20 percent share.

That’s the measurement of your share of the market.  Most business-to-business sellers are going to be under 25 percent.  In other words, you probably have potential that is four or five times the amount you are currently doing.

Now, look at what you have there.  Unless you have 85 – 90 percent market share, there is huge potential in your territory.

Start by focusing on that potential.  Instead of reacting to, and being influenced by, the dreary conversations of your customers, plan to go after that huge potential in your territory.

This little exercise has the power to transform your attitude, replacing negative reaction with positive proactive action.

There is a principle at work here.  The act of changing your mindset and focusing on something positive has a way of changing your results.  You begin to see opportunities that you previously overlooked.  Your more positive attitude oozes out of you, and subtly influences the people around you.

You become more like the stone thrown into the pond that creates the ripples on the surface of the water, whereas before you were more like the bubbles on the top of the wave, blowing this way and that way, totally dependent on some other force to determine your way.

Let’s do one more attitude change.  Instead of thinking that fear and anxiety are negative, think of them as positive forces for change.

Let me explain.  In order to grow your business and gain market share, you are going to have to take the business away from one of your competitors.  There has never been a better time to do so than now.  This recession/ depression offers what may be a once-in-a-lifetime opportunity to build your business. Here’s why.

You are going to ask people to change their behavior.  Change never comes easily.  It is best accomplished when someone has a powerful emotional reason to change.  The fear and anxiety in the marketplace are powerful emotions.  It is easier to get people to change today than it was a year ago.  If you can channel those emotions and present your solution in a way that gives people confidence that makes their fear subside, in some small way, you’ll find your customers willing to make significant changes. Radical changes that were unthinkable in a less anxious time, are today accepted with minimal push back.

On a much smaller scale, the same principle applies to your customers and prospects.  If you can show that you have a solution that, in some small way, makes them feel less fearful, you’ll find that they will be more amenable to change than at any other time in your career.

Rethink how you can present your product or service.  Instead of focusing on the features, think about how the decision to buy it from you can provide the customer some peace of mind, can make his fear subside in the category of products that you sell.  Present the decision to buy it from you as one which makes him feel better.

Here’s an example.  Let’s say that you sell industrial supplies to manufacturers.  You are used to reacting to the customer when he says that he needs this or that, pitching your product, dickering over price, and hopefully gaining an order.

Suppose you were to recast your whole approach.  Create a whole different presentation.  Consider what it would mean to a customer if they were to do all their business with you.  Your company could be responsible for keeping them updated on all the new products, your company could take over their inventory, your company could provide monthly reports, your company could work with your suppliers to reduce their costs.  You could become partners.

As a result, your customers could do more with fewer people, reducing their costs.  They would spend far less time, and therefore money, interviewing sales people.  They would be more efficient, and could focus their attention on their customers instead of worrying about your category of product.  That would be a radically different approach, a different way to do business that would give them some peace of mind and stability in a threatening and dangerous environment.

That’s what I’m talking about.

But wait, you say, not all of my customers would be open to that kind of approach.

You are right, of course.  But some will.  Your job is to identify, by thoughtful analysis, which of your customers and which of your prospects would be most open to that approach, and then to create a plan to present it to them.

We have a methodology for selecting those customers and prospects that would take too much space to describe here.  Go to Chapter Six of my book, 10 Secrets of Time Management for Salespeople to read about it, see #22 “Time Management: Making Hard-Headed Decisions About How to Invest Your Selling Time” for an audio training program, and consider “Prioritizing Your Customers to Dramatically Increase Your Sales” for a video training program.

Imagine what it would mean to you if you could just get a half dozen of your customers to commit to a radically different way of doing business with you, and buy everything from you!  In most cases, your sales would at least double, you’d have more fun, make more money, and have less stress.  That’s the potential that is in your hands.

Your choice is clear.  You can join the defeatists of the world and become a depressed victim of the recession.  Or, you can take your fate into your own hands, and proactively take advantage of this once-in-a-lifetime opportunity.

Go forth and sell well!

Join me in a webinar entitled “How to survive and thrive by selling smart in a difficult economy.”  In it, I’ll describe, in more detail, exactly how to take your fate into your hands and implement this strategy.  For information, call us at 800-331-1287.

About the author

Dave Kahle is one of the premier sales educators in the world.  He’s written eight books, spoken in 47 states and seven countries, trained tens of thousands of sales people and sales managers to be more effective, and publishes a free weekly Ezine.  To subscribe to his Ezine, check out his website at www.davekahle.com.

Top 20 CRM According to Capterra

Capterra’s series of Top 20 reports covers three distinct topics: affordability, user friendliness, and popularity. But when most people buy software, they’re looking for a combination of all three of those qualities in one solution. Below, you can see which CRMs have made our most popular report.

Commence CRM Top 20 Most Popular CRM

Be Careful – Ease of Use is Overrated when Selecting CRM

Ease of use should not be your number one decision criteria when selecting crm.

Every CRM solution provider tries to convince potential customers that their CRM system is easy to use, because they know that it is one of the top decision criteria. However, there is a correlation between ease of use and value to your business. In many cases, the low cost and freemium products are in fact easy to use. Why? Because they don’t do very much, plain and simple.

At Commence Corporation, we get calls every day from small to mid-size businesses that are looking to replace their CRM system because in less than one year they have already outgrown it. They tell us that the one they selected does not offer a calendar or e-mail integration. Others have limited to no customization, and no API for system integration. Some offer just basic reporting such as sales forecasts. Most have limitations galore such as the number of contacts or accounts you can store, the number of reports you can generate, and how many e-mails you can send. Moreover, when it comes to customer support the only option is e-mail.

But, let’s be fair here. If the product is free or just a few dollars a month, there is no way for the vendor to provide advanced functionality or additional applications such as marketing campaign management, customer service ticketing, or project management. Nor can they afford to answer the telephone and provide free consultation. So what did you get? A low cost or free solution that you have now discovered will not meet your current or future business requirements. Here is the good news. It is easy to use.

The reason companies select these products is clear. In most cases, they did not take the time to define their business requirements. It was just easier to download a few free trials then select the one they liked the best based on cost and cosmetic appeal. Making a decision couldn’t be easier. Try it for 30 days with no commitment and if you like it, just pay the monthly fee.

If you are small or home based business, these offerings may be perfect for you. However, if you are a company that is seriously looking to improve your sales, marketing, and how you provide services to your customers, then ease of use should not be your number one decision criteria.

Note: Commence CRM offers data migration services from other CRM solutions. Call 877-266-6362 for more information.