I regularly talk to my clients who have long and complicated sales processes regarding the need to adopt a Decision Timeline. These are known by many different names, but regardless of name, they are a list of action items that both companies need to check off either independently or mutually. This allows both the selling and buying teams to have a project plan to arrive at a decision to move forward with a financial transaction in return for the product or service.
When a selling team first does a Decision Timeline, it is not unusual for it to be very similar to a Close Plan, but the goal is to have mutually agreed-upon outcomes. My friends at Sales Assembly put out a great video to drive home the correct behavior, and it is worth every salesperson’s time to review it.
In business-to-business sales, extending discounts holds a place of ancient reverence, a tactic as old as commerce itself. This approach, crafted to escalate sales volume, capitalizes on a fundamental business purchasing principle: the quest for cost efficiency. By lowering the prices of goods or services, firms aspire to enhance the desirability of their products, thereby aiming to boost demand and, consequently, sales volume. Employing this tactic becomes particularly compelling in scenarios such as launching a new product line during contract renewal phases or seeking to penetrate deeper into highly competitive markets. The underlying premise is straightforward: reduced prices are anticipated to drive up sales volumes, potentially offsetting the dip in margins per unit sold.
However, offering a prospect a discount warrants careful consideration. While the immediate benefits—spiked interest from potential clients, an uptick in sales volumes, and the rapid inventory turnover—might seem enticing, the broader implications unveil a complex set of ramifications. This article endeavors to peel away the layers enveloping this widespread sales strategy, illuminating its influence on profitability, and evaluating its sustainability as a long-term practice.
Navigating the Complexity of Discounting in B2B Sales
At initial consideration, discounts present an ostensibly harmonious scenario: clients secure the products or services they need at reduced rates, while companies witness a boost in sales activity. Nevertheless, the stark reality is that indiscriminate discounting can significantly undermine profitability. This necessitates a nuanced understanding of profitability metrics: gross profit versus net profit.
In professional business-to-business sales, the sales team doesn’t need a CPA, but they should know the basics of finance. Understanding the interplay between Gross Profit, Net Profit, COGS (Cost of Goods Sold), and SG&A (Selling, General & Administrative Expenses) is pivotal for any organization aiming to fine-tune its operational efficiency and profitability. These metrics, each distinct in scope and impact, collectively offer a comprehensive view of a company’s financial health. Let’s delve into these concepts, exploring their nuances and significance in the broader context of business management.
COGS: The Direct Costs Tied to Production
COGS encompasses the direct costs attributable to the production of the goods or services sold by a company. This includes raw materials, labor costs directly involved in production, and manufacturing overheads. COGS is a critical metric for management to consider, as it directly affects the Gross Profit. By optimizing production processes or negotiating better terms with suppliers, a company can effectively lower its COGS, thereby increasing its Gross Profit margin—an essential strategy for enhancing profitability.
SG&A: The Overhead of Running a Business
SG&A represents the cumulative expenses incurred from selling, general, and administrative activities. These are the costs associated with operating the business that are not directly tied to production, including sales force salaries, marketing expenses, rent, utilities, and administrative salaries. SG&A expenses are significant because they do not directly contribute to producing goods or services; they are essential for the company’s day-to-day operations and strategic positioning in the market. Effective management of SG&A expenses can significantly influence a company’s Net Profit, as these costs can either erode or support profitability depending on how they are controlled.
Gross Profit: The Initial Gauge of Profitability
Gross Profit is the initial measure of a company’s financial performance, calculated by subtracting the Cost of Goods Sold (COGS) from the total revenue generated from sales. This figure is crucial because it reflects the efficiency with which a company produces or sources its goods and services before accounting for broader operational costs. For instance, if a company generates $1 million in sales and incurs $600,000 in COGS, its Gross Profit would be $400,000. This metric indicates the company’s production or procurement efficiency but does not account for the overheads and other operating expenses that also impact the company’s profitability.
Net Profit: The Ultimate Measure of Financial Health
Net Profit, often considered the bottom line, is the ultimate indicator of a company’s profitability after all expenses, including COGS, SG&A, interest, and taxes, have been deducted from total revenue. It is the most comprehensive measure of a company’s financial performance, revealing what remains as actual profit. For example, continuing from the Gross Profit scenario, if the company has additional operating expenses of $200,000 and taxes and interest amounting to $50,000, the Net Profit would be $150,000. This figure is paramount for stakeholders to assess the company’s profitability and sustainability.
Gross profit, calculated as the revenue from sales minus the cost of goods sold (COGS), provides an initial insight into the financial gain from sales. Yet, the net profit, the remainder after deducting all operational expenditures, interest, taxes, and Selling, General & Administrative (SGA) expenses from the gross profit, genuinely encapsulates a company’s financial health.
How All Of This Applies to Salespeople
In most companies, the sales team cannot change the COGS or SG&A for any deal. The only thing salespeople can typically control is the Selling Price; from that Selling Price, the costs have to be deducted to calculate the Net Profit.
Let’s dissect the financial dynamics further. Assume a service in the B2B sector is offered at a standard rate of $100,000, with a COGS of $60,000, rendering a gross profit of $40,000—a 40% gross margin. With the 20% SGA and other operational costs factored in, the net profit might settle at $20,000 per sale, constituting a 20% net margin on the transaction.
Assuming the costs in the company are static, introducing a 10% discount drops the service price to $90,000. While the gross profit shrinks to $30,000 after we take out the $60,000 in COGS, the net profit is disproportionately affected. The fixed nature of SGA expenses means they remain constant, dramatically squeezing the net margin. In this example, the net profit after the 10% discount drops from $20,000 to $10,000.
Let’s summarize this example without all of the wording:
0% Discount
5% Discount
10% Discount
List Price
$100,000
$100,000
$100,000
Selling Price
$100.000
$95,000
$90,000
COGS
$60,000
$60,000
$60,000
Gross Profit
$40,000
$35,000
$30,000
SG&A
$20,000
$20,000
$20,000
Net Profit
$20,000
$15,000
$10,000
As you can see from the above table, a 5% discount means a 25% reduction in Net Profit for this hypothetical company. A 10% discount means a 50% discount in Net Profit.
The critical question then becomes: How much additional sales volume is necessary to maintain or increase overall profitability post-discount? The revelation often shocks: a minor discount demands a significant upsurge in sales volume to compensate for the reduced net profitability—a challenging feat in the B2B landscape, where sales cycles are longer and client acquisition efforts more intensive.
Let’s show that math more clearly with the above example. Let’s assume that the above company only sells products with a $100,000 list price and they do 100 deals in a year. That means if all of the deals are at least price, they will achieve a gross revenue of $10,000,000 and a net profit of $2,000,000.
However, if the company gives everyone a 5% discount and the company’s stockholders want the same net profit, they will have to do $2M divided by $15K deals. That is 134 deals or a 34% increase in the number of deals. This means that a 5% discount means the sales team has to close 34% more deals to contribute the same net profit to the shareholders.
If the company gives everyone a 10% discount and the company’s stockholders want the same net profit, they will have to do $2M divided by $10K deals. That is 200 deals or a 100% increase in the number of deals. This means that a 10% discount means the sales team has to close twice the number of deals to contribute the same amount of net profit to the shareholders.
Reassessing the Discount Strategy
The appeal of leveraging discounts to amplify sales volume in the B2B sector is undeniable but fraught with pitfalls. Such strategies can erode net profitability, necessitate unrealistic sales volume increases to maintain financial stability, and might inadvertently signal desperation or devalue the proposition in the eyes of business clients. The purpose of this article is not to outright condemn discounting but to advocate for a strategic application thereof. Companies should meticulously evaluate the immediate allure of increased sales against the enduring implications for profitability. In numerous instances, alternative strategies that add value or enhance service offerings may present a more viable route to growth and financial robustness.
The Commission Conundrum: Revenue vs. Profitability
In the intricate ecosystem of sales and profitability, a critical and often overlooked element is the structure of sales commissions. The traditional commission model incentivizes sales personnel—and, by extension, their managers—based on the volume or dollar value of sales achieved, not the profitability of those sales to the company. This misalignment between the sales force’s motivations and the company’s overarching financial goals can lead to a significant disconnect, particularly in the context of discounting strategies.
As a lever of motivation, sales commissions are designed to spur sales teams to higher performance levels. However, when commissions are tied solely to revenue without consideration for profitability, it encourages a focus on the top line at the expense of the bottom line. For instance, a salesperson might be driven to close deals by offering discounts, thereby boosting their sales figures—and, by extension, their commissions—even if such discounts erode the company’s net profit. This scenario is further compounded if the salesperson’s manager, who also benefits from the team’s revenue performance, supports such discount-driven sales tactics without regard to their impact on profitability.
This model creates a fundamental misalignment between the sales team’s goals and top management’s strategic objectives. While sales teams are propelled towards maximizing raw revenue, top management’s primary concern is enhancing net profit—the company’s financial health indicator. The crux of the problem lies in the fact that discounts, while potentially beneficial for achieving short-term sales targets, can significantly undermine net profit margins. This is particularly true in industries where the cost structure is fixed or semi-fixed, and reducing prices does not proportionately decrease costs.
Implementing Safeguards: Aligning Sales Strategies with Profitability Goals
The solution to this problem lies in implementing robust safeguards and a strategic overhaul of the commission structure. First, establishing a rigorous discount approval process can be an effective checkpoint. This process ensures that discounts align with broader financial strategies and the company’s profitability goals. Such a system might include tiered discount limits, beyond which sales personnel must obtain managerial or executive approval.
Second, reconfiguring the commission model to incorporate profitability metrics can realign the incentives for the sales team with the company’s financial objectives. This might involve setting commissions based on net profit generated by sales rather than gross revenue. Alternatively, a balanced scorecard approach, with MBO goals (Management By Objective), including revenue and profitability targets, can incentivize sales personnel to consider the broader financial implications of their sales tactics.
Bridging the Gap Between Sales and Profitability
The alignment of sales strategies with the company’s profitability objectives is not merely a financial imperative but a strategic necessity. By reevaluating commission structures and implementing safeguards against indiscriminate discounting, companies can ensure that their sales efforts contribute positively to the bottom line. This approach fosters a culture where the sales team is not just focused on meeting revenue targets but is also mindful of the profitability and financial health of the organization. In doing so, companies can bridge the gap between pursuing raw revenue and the imperative of net profit, ensuring long-term sustainability and growth. This strategic alignment is crucial for navigating the complex interplay between sales incentives and company profitability, ultimately leading to a more cohesive and financially robust business model.
The delicate balance between pursuing immediate revenue gains through discounts and maintaining the integrity of net profitability demands a strategic reevaluation. The allure of discounts, often seen as a shortcut to achieving sales targets, undeniably poses a significant challenge to profitability. However, the proper resolution lies not in the mere restriction of discounts but in the fundamental shift towards selling value, cultivating champions within client organizations, and ensuring a seamless product alignment with the customer’s needs and objectives. This comprehensive approach mitigates the adverse effects of discounting on profitability and fortifies the foundation for sustainable, value-driven sales practices.
Selling Value: Elevating the Conversation Beyond Price
The cornerstone of mitigating the need for discounts is effectively articulating and demonstrating value. Value selling transcends the simplistic equation of cost versus features, delving into the tangible and intangible benefits that the product or service brings to the customer. This involves a meticulous understanding of the customer’s business landscape, challenges, and strategic objectives. By positioning the product or service as a pivotal solution that addresses these elements, sales professionals can pivot the conversation from price to value, emphasizing the return on investment (ROI) and the broader impact on the customer’s business.
The art of selling value requires a systematic approach, blending analytical rigor with a deep empathy for the customer’s context. It involves crafting a narrative that resonates with the customer’s aspirations and needs, backed by concrete data and case studies that illustrate the positive outcomes achieved by similar clients. This strategy elevates the customer’s perception of the product and fosters a more profound, consultative relationship that is less susceptible to the commoditization pressures that drive discounting.
Building Champions: The Power of Internal Advocacy
Another pivotal strategy is the cultivation of champions within the customer’s organization. Champions are internal advocates who understand and believe in the product or service’s value and are willing to mobilize support for it within their organization. Building champions involves identifying potential advocates based on their influence, alignment with the product’s value proposition, and professional objectives.
Empowering these champions requires providing them with the knowledge, tools, and confidence to articulate the value proposition internally effectively. This includes tailored presentations, compelling case studies, and data-driven ROI analyses that they can use to persuade other stakeholders. Champions serve as a critical bridge, amplifying the sales message and facilitating a deeper engagement with the customer organization. They help navigate internal dynamics and objections, making the sales process more efficient and reducing the reliance on discounts as a persuasive tool.
Aligning Product to Customer’s Needs and Goals: The Keystone of Value
At the heart of the solution to discount-driven sales challenges lies the alignment of the product or service with the customer’s needs and goals. This alignment ensures that the offering is not just a generic solution but a strategic fit that addresses specific challenges and capitalizes on unique opportunities within the customer’s business. Achieving this alignment requires a consultative sales approach characterized by active listening, probing questions, and a collaborative exploration of the customer’s business environment.
This process involves understanding the current needs and anticipating future challenges and opportunities. The sales professional must adopt a strategic advisor role, leveraging insights and expertise to guide the customer toward solutions that meet immediate needs and support long-term objectives. This level of alignment fosters a partnership-based relationship, where the product or service’s value is inherently recognized, reducing the customer’s sensitivity to price and diminishing the need for discounts.
A Strategic Blueprint for Sustainable Sales Success
The challenges posed by discounting strategies to profitability are significant but manageable. The proper solution lies in a holistic approach that focuses on selling value, building champions, and ensuring a deep alignment between the product and the customer’s needs and goals. This strategy requires a shift from transactional sales tactics to a more consultative and value-driven sales methodology.
By effectively selling value, sales professionals can elevate the conversation beyond price, emphasizing the broader business impact and ROI of their offering. Building champions within customer organizations create powerful allies who can advocate for the product internally, leveraging their influence to support the sales process. Finally, ensuring that the product is closely aligned with the customer’s strategic needs and goals solidifies the foundation for a partnership-based relationship, where the inherent value of the solution diminishes the focus on price and negates the need for discounts.
This approach addresses the immediate challenge of maintaining profitability in the face of discount pressures and lays the groundwork for sustainable sales success. It fosters more profound and more meaningful customer relationships built on a foundation of trust, value, and strategic alignment. In doing so, it positions companies to achieve short-term sales targets and long-term business objectives, securing a competitive advantage in the complex landscape of B2B sales.
Actions That You Can Take Today
To address the challenge of discounts affecting profitability without altering COGS or SG&A costs, sales managers and CEOs can implement the following five actionable steps today to enhance their company’s profitability through strategic sales practices:
Reframe the Sales Conversation Around Value, Not Price: Train your sales team to pivot discussions with clients from price to the comprehensive value your product or service offers. This involves deepening their understanding of the client’s business needs and how your solutions can address these needs in a way that contributes positively to the client’s profitability and operational efficiency. Encourage your team to prepare case studies and ROI analyses that clearly articulate the long-term benefits and cost savings of choosing your product or service over cheaper alternatives.
Introduce a Value-based Commission Structure: Redesign the commission structure to reward sales personnel not just for gross revenue, but also for selling at or near list price, thereby preserving or enhancing profitability. This could include bonuses for deals closed without discounts or additional incentives for upselling value-adding features or services that improve customer outcomes without significantly increasing discount levels.
Establish Strict Discount Approval Processes: Implement a tiered approval process for discounts requiring higher management levels to sign off on larger discounts. This process should include a profitability analysis to ensure that any discounts granted do not erode the net profit margin below an acceptable threshold. Making the discounting process more rigorous will encourage sales teams to seek alternative strategies to close deals.
Cultivate and Empower Internal Champions: Develop a program to identify and nurture champions within your prospects—key individuals who understand and believe in the value of your solutions. Provide these champions with the tools and information they need to advocate effectively on your behalf, turning them into an extension of your sales team. This might include exclusive insights into product development, customized value assessments, or early access to new features or services.
Align Sales Goals with Strategic Business Objectives: Ensure that your sales team’s objectives align with the company’s broader strategic goals, particularly profitability. This might involve setting specific targets for selling certain products or services with higher profit margins or developing bundled offerings that meet customer needs more comprehensively while improving profitability. Regularly review these goals and the strategies employed to achieve them, adjusting as necessary to keep your sales efforts focused on enhancing the bottom line.
By implementing these strategies, sales managers and CEOs can drive their teams towards practices that maintain and potentially increase profitability, even when discounts are off the table. These action items foster a culture of value selling, strategic negotiation, and customer-centric solutions, ultimately contributing to sustainable growth and profitability.
Welcome to “Driving New Sales: Transforming Small Businesses into Sales Powerhouses,” the essential podcast for B2B sales professionals, managers, and CEOs of companies aiming for revenue growth. In today’s episode, we’re diving into the core of any thriving sales organization: the Sales Process Flowchart. Guided by Sean O’Shaughnessey, a veteran in sales strategy, we’ll explore how to craft and refine your sales process for peak efficiency and effectiveness.
Our esteemed sponsor, Kevin Lawson of Lighthouse Sales Advisors and Sales Xceleration, is our sponsor for this episode. Kevin offers unparalleled sales leadership solutions for small businesses, focusing on navigating sales growth challenges and scaling up operations through his extensive experience. Kevin’s fractional consultancy is the answer for those looking for expert guidance in sales team development without the commitment of a full-time executive.
Blueprint of Success: Discover the importance of having a well-defined Sales Process Flowchart as your guide through the sales journey.
Stages of the Sales Process: Sean breaks down each stage of the sales process, from prospecting to nurturing long-term relationships.
Customizing Your Sales Approach: Learn the significance of tailoring your sales process to fit your unique business model and industry requirements.
Visualizing the Sales Funnel: An exploration of how visualizing your sales funnel can identify potential leaks and optimize the sales journey.
Leveraging Technology: Insight into how automation tools and CRM systems can enhance your sales process and free up your team to focus on selling.
The Dynamic Nature of Sales Processes: Emphasizing the importance of continuous feedback and adaptation to keep your sales process relevant and effective.
Key Quotes
“Success doesn’t come from random acts of effort. It requires a blueprint, a master plan that orchestrates every step of the sales journey.”
“Imagine your Sales Process Flowchart as the architectural plan for a skyscraper. Without it, you’re merely stacking bricks without knowing how high they should go.”
“Technology is the wind beneath our sales team’s wings, freeing them up to do what they do best—sell.”
Additional Resources
Sales Management Association Study: Highlights the performance impact of using a formal sales process.
Harvard Business Review Study: Shows a significant revenue increase for businesses with a standardized sales process.
Action Items You Can Do Today
Develop a Visual Sales Process Flowchart: Start with a simple outline and refine it to suit your team’s needs.
Solicit Feedback from Your Sales Team: Use their frontline insights to improve your sales process.
Customize Your Approach: Ensure your sales stages align with your business model for increased efficiency.
Invest in Training and Technology: Equip your team with the necessary knowledge and tools to excel.
Embrace Continuous Improvement: Regularly update your sales process based on feedback and changing market conditions.
Today’s episode with Sean O’Shaughnessey has armed you with the knowledge to construct a Sales Process Flowchart that is the backbone of a successful sales strategy. Implementing the discussed actionable strategies will refine your sales process, making it a powerful engine for business growth. Stay tuned for more insightful episodes to further empower your journey to becoming a sales powerhouse.
Contact Information
Sean O’Shaughnessey: Email – Sean@NewSales.Expert
For more expert advice on transforming your sales strategies, don’t forget to subscribe to “Driving New Sales: Transforming Small Businesses into Sales Powerhouses.” Join us next time for another deep dive into the strategies that can elevate your sales game. Until then, keep selling smart and forging meaningful connections with your customers.
Join hosts Kevin Lawson and Sean O’Shaughnessey on “Two Tall Guys Talking Sales” for a captivating conversation with special guest Jeff Clair, a fractional VP of sales and the brain behind ClairVoyant Consulting LLC. In this episode, Jeff shares his invaluable insights on the power of storytelling in sales, offering practical tips for salespeople to engage and connect with their prospects effectively. Whether you’re a seasoned sales professional or new to the field, this discussion is packed with advice to elevate your sales approach through compelling storytelling.
Key Topics Discussed
The Art of Storytelling in Sales: Jeff emphasizes the importance of storytelling as a memorable and impactful way to communicate with prospects.
Remembering and Crafting Stories: Insights into how salespeople can remember and craft stories that resonate with their audience, making the prospect the story’s hero.
The Role of Salespeople as Guides: Drawing parallels from popular movies, Jeff illustrates how salespeople should position themselves as guides in their storytelling, akin to characters like Yoda in “Star Wars.”
Practicing Storytelling: The significance of practicing storytelling within sales teams, including role-playing exercises to refine this skill.
Connecting Stories to the Buyer’s Journey: Jeff connects the dots on how storytelling fits into the buyer’s journey, providing a framework for new and seasoned sales professionals to enhance their sales strategies.
Role-Playing and Feedback: An exploration of effective training techniques, including role-playing, to help salespeople become more engaging and confident storytellers.
Key Quotes
Jeff Clair:
“People tend not to remember the facts, but they remember stories…great storytellers infuse different senses, which is really great.”
Kevin Lawson:
“Practice makes easy. Not practice makes perfect…there’s always room for improvement.”
Sean O’Shaughnessey:
“Practice allows you to figure out how to do it better…those people in small organizations tend not to practice enough.”
Additional Resources
The Story Brand by Donald Miller: Recommended reading for salespeople and marketing professionals to master the art of storytelling in business.
Summary
This insightful episode of “Two Tall Guys Talking Sales” dives deep into the transformative role of storytelling in the sales process. With his rich experience in sales leadership, Jeff Clair shares why stories captivate, how to craft them effectively, and the importance of salespeople seeing themselves as guides for their prospects. Through role-playing and practice, Jeff underscores the significance of confidence and personalization in storytelling, ensuring that each story resonates deeply with the intended audience. This discussion is a must-listen for anyone looking to harness the power of storytelling to not just sell but to connect and inspire action.
Elevate your sales game with the art of storytelling. Download this episode now and transform how you engage with your prospects.
Dive into the world of sales excellence with “Two Tall Guys Talking Sales,” as hosts Kevin Lawson and Sean O’Shaughnessey welcome Jeff Clair from ClairVoyant Consulting LLC. In this compelling episode, Jeff, a seasoned fractional VP of Sales, shares his East Coast insights into overcoming common sales challenges, utilizing innovative strategies, and enhancing the sales process. Join us as we explore the nuances of sales from different regional perspectives, offering valuable advice for sales professionals across the spectrum.
Key Topics Discussed
The Importance of a Defined Sales Process: Jeff emphasizes the critical role of having a structured sales process and how the lack of one can lead to salespeople ‘winging it.’
Utilizing CRM for Sales Success: The discussion highlights how CRM tools can delineate sales stages, aiding salespeople in navigating from lead generation to closing.
Referral Strategies: The panel delves into the potential of referrals in sales and why many salespeople hesitate to ask for them, missing out on valuable opportunities.
Closing Techniques and Challenges: Jeff shares insights into salespeople’s common hurdles when closing deals and the strategic importance of asking the right questions.
The Power of Storytelling in Sales: Jeff advocates for storytelling as a technique to connect with prospects, positioning them as the ‘hero’ of their journey with your product or service.
Guidance over Selling: The notion that successful salespeople guide rather than sell to their prospects, encouraging sales teams to adopt a consultative approach.
Key Quotes
Jeff Clair:
“Nobody really sells people anything…successful salespeople identify needs, desires, wants, and then satisfies those needs, desires, or wants with the product that they have.”
Kevin Lawson:
“Facts tell and stories sell…we’re going to unpack how stories sell in our next episode.”
Sean O’Shaughnessey:
“A salesperson is a guide…they are experts in selling their product. The prospect probably is not an expert in buying that thing.”
Summary
This episode of “Two Tall Guys Talking Sales” is a treasure trove for anyone looking to sharpen their sales skills. With Jeff Clair’s expertise, the discussion sheds light on critical aspects of the sales process, from the initial lead generation to the final close. By addressing salespeople’s common pitfalls and offering strategies to overcome them, Jeff, Kevin, and Sean provide listeners with actionable advice to elevate their sales game. Whether you’re a seasoned VP of Sales or a sales professional looking to improve your approach, this episode is packed with insights that can transform your sales strategy and lead to greater success. Tune in to learn how to navigate the sales process confidently, leverage your CRM effectively, and harness the power of storytelling to connect with your prospects on a deeper level.
In this enlightening episode of “Two Tall Guys Talking Sales,” hosts Kevin Lawson and Sean O’Shaughnessey delve into the perennial challenges sales professionals face: the need for more leads and adding value to existing leads. They share their expert insights on building robust sales pipelines, identifying ideal customer profiles, and effective strategies for increasing sales efficiency. Whether you’re a CEO, sales manager, or a salesperson, this episode offers valuable guidance to enhance your sales performance.
Key Topics Discussed
Building a More Robust Pipeline: Strategies to improve pipeline quality for sustained income generation.
Ideal Customer Profiling: Understanding the difference between short-term accessible prospects and long-term ideal customers.
Resource Management: Tackling the universal challenge of limited resources in sales organizations.
Prospecting Techniques: The importance of referrals, networking, and leveraging platforms like LinkedIn.
Prioritizing Sales Efforts: Focusing on the probability of closing deals rather than just deal size or closing dates.
Consistency in Sales Activities: How regular, focused efforts in different stages of sales lead to better results.
Key Quotes
Kevin Lawson:
“We actually encourage them to manage their deals and their communication priorities by the probability of closing… When all these things come together, it’s insane how fast your pipeline will grow and how fast deals will close.”
Sean O’Shaughnessey:
“You have to be stingy. You have to choose where to invest appropriately, and you have to constantly invest… Every quarter, every month, every week, every day, you need to set aside time that you are investing in your business.”
Summary
This episode of “Two Tall Guys Talking Sales” is a goldmine for anyone looking to enhance their sales process. Kevin and Sean offer a deep dive into the nuances of building a strong sales pipeline, effectively utilizing resources, and the art of prioritizing prospects. Their conversation is not just theoretical; it’s filled with practical, actionable advice that can be implemented immediately. This episode is a must-listen if you’re seeking to transform your sales approach, be it as a CEO, a sales manager, or a frontline salesperson. Tune in to discover how you can revolutionize your sales strategy and achieve remarkable results.
As we dive into the New Year, it’s crucial for sales professionals, managers, and CEOs of small companies to reflect on one pivotal aspect of their sales strategy – the art of negotiation. I am committed to guiding you toward more profitable deals this New Year and beyond.
Evaluating Past Deal Profitability
Take a moment to review your deals from the previous year. Were they as profitable as they could have been? The ease of offering discounts can often overshadow the challenge of selling at list price. However, your company’s profit model heavily relies on effective negotiation.
Look back at your past deals. Pinpoint the aspects where negotiations fell short. Set a clear goal for this year to avoid repeating these mistakes. Improvement begins with recognizing what didn’t work well in the past.
Embracing Continuous Learning in Negotiation
As I’ve emphasized in a previous video, continuous learning is crucial. This is particularly true in negotiation. A slight improvement in your negotiation skills can significantly impact your bottom line. Consider attending a class, webinar, or consulting with an expert to hone this skill.
If negotiation is not your forte, reach out for assistance. I’m here to offer suggestions, recommend training resources, or even provide personal training to help you negotiate more effectively.
Preparing for Negotiations Proactively
Prepare a list of items you can afford to discount and those you cannot. Develop scripts and strategies for common negotiation scenarios. This preparation will help you remain steadfast during negotiations, ensuring you don’t make concessions on a whim.
Identify services or add-ons you can offer during negotiations that provide value to your client but don’t significantly impact your costs. This strategy can be a game-changer in making your proposals more attractive while maintaining profitability.
This is the year to enhance your negotiation tactics. By doing so, you’re not just closing deals; you’re maximizing the value and profitability of each transaction. Remember, effective negotiation is not about conceding profits but finding a mutually beneficial ground where your company’s value is rightly recognized and compensated.
Happy New Year, and here’s to your profitability and success in the New Year!
Check out my video below (the final video in this year’s series to start the New Year with confidence and capability).
As we embark on this new year, it’s time to reevaluate and refine our sales strategies. My mission is to empower salespeople, sales managers, and CEOs of small companies to achieve remarkable growth this New Year. One crucial aspect that often goes overlooked is the efficiency of your sales process.
A Customer Relationship Management (CRM) system is more than a digital Rolodex; it’s a strategic tool that, when used effectively, can transform your sales process. Ensure that your CRM reflects and aids your sales process. If it doesn’t, you face a gap in your strategy and tools that needs immediate attention.
Take the time to map out your current sales process within your CRM. This exercise isn’t just about documentation; it’s about identifying bottlenecks and inefficiencies. Once you spot these, you can start making targeted improvements.
You may not solve all the problems overnight, but identifying and addressing even one bottleneck can significantly enhance productivity. A small change, like streamlining a step in your process or improving communication flow, can have a compound effect throughout the year.
Remember, you don’t have to do this alone. Your sales team, operations staff, and even your customers can provide invaluable insights into what’s working and what’s not. Collaborate with them to find ways to make your sales process smoother and more customer-friendly.
Your goal should be to make dealing with your company as seamless as possible for your clients. Imagine a scenario where your customers view working with you as the easiest part of their day. This level of customer experience can set you apart in a competitive market.
As we move forward in the New Year, I challenge you to enhance your sales process proactively. A well-optimized sales process increases your team’s productivity and elevates the customer experience.
Make this year count by refining your approach to sales. Good luck, and here’s to a year of effective selling and remarkable growth!
For more insights into this process, watch my video below.
In the ever-evolving world of sales, resting on your laurels is not an option. My mission is to inspire small company sales professionals, managers, and CEOs to seek knowledge and improvement constantly. As we venture into the New Year, let’s focus on embracing continuous learning to elevate your sales game.
The first step towards growth is acknowledging there’s always more to learn. With 38 years of experience in sales, I still actively seek new tools, techniques, and ways of presenting. This mindset is crucial for everyone in sales – from the rookie to the veteran.
Immersing yourself in your industry is key. Subscribe to at least two industry newsletters this week. These resources will keep you updated on your field’s latest trends, challenges, and innovations. It’s vital to stay informed and conversant about the evolving landscape of your industry.
Podcasts are a goldmine of information and can be a convenient learning method. I host two sales-focused podcasts, ‘Two Tall Guys Talking Sales‘ and ‘Driving New Sales,’ which offer weekly insights into sales best practices. However, don’t limit yourself – explore other sales and industry-specific podcasts to broaden your knowledge.
Commit to daily reading about sales and your specific industry. Early mornings or commute times are perfect for catching up on the latest articles and insights. Sharing interesting findings with your team or on platforms like LinkedIn can enhance your professional network and credibility.
If you’re in a leadership role, guiding your team through this continuous learning journey is part of your responsibility. Encourage your team to share new insights and strategies, fostering a culture of knowledge and improvement.
No matter where you are in your career, there’s room for improvement. Set personal goals for learning and betterment this year. It’s not just about closing more deals; it’s about becoming a more knowledgeable, versatile, and successful sales professional.
As we embrace this new year, let’s commit to continuous learning and improvement in our sales careers. It’s not just about staying ahead; it’s about setting a new standard for excellence in sales.
Good luck, and here’s to a year of growth and successful selling! Please enjoy the video below, in which I discuss this concept even more.