In B2B sales, professionals grapple with many challenges that can make or break their success. Clearly articulating a unique selling proposition (USP) stands out as a cornerstone for distinguishing oneself from the competition. This capability is not just a nicety—it’s a necessity. As businesses strive to carve out their niche in crowded markets, understanding and communicating what makes them distinct becomes paramount.
The concept of a USP or value proposition is often used interchangeably, yet its essence lies in differentiation. It’s about answering the pivotal question: why should customers choose you over others? This query isn’t trivial; it’s fundamental to the survival and growth of any business. As we delve deeper, it becomes evident that the challenge isn’t just about having a unique offering but about ensuring that every sales and leadership team member can communicate this uniqueness consistently and effectively.
The repercussions of failing to do so are significant. A disjointed message can lead to confusion in the marketplace, eroding trust and making it difficult to attract and retain customers. Furthermore, in an era where talent is a key competitive advantage, a clear and compelling USP can also be a magnet for attracting top sales talent. Articulating what sets a company apart is crucial for winning customers and building a strong, cohesive sales team.
Achieving alignment on a USP requires a deliberate effort. It involves going beyond superficial statements that could apply to any company and digging deep to identify what truly makes your business special. This process can be challenging, requiring businesses to engage in introspection and sometimes difficult conversations. However, the rewards of getting it right are substantial. A well-articulated USP can be the foundation for all sales and marketing efforts, providing a clear, compelling reason for customers to choose your company.
One effective strategy for uncovering your USP is to engage directly with your customers. Businesses can gain often overlooked insights by understanding why they chose your company and what they value most about your offering. This customer-centric approach helps refine your USP and ensures that it resonates with the people you aim to serve.
Furthermore, consistency in communication is key. It is crucial that everyone from the sales team to the marketing team and the CEO can articulate the USP consistently. This doesn’t mean reciting a scripted message but rather understanding the core essence of what makes the company unique and being able to convey that in various contexts.
Communicating a unique selling proposition is not just a sales challenge; it’s a strategic imperative for businesses aiming to thrive in the competitive landscape of B2B sales. It requires a concerted effort to identify, articulate, and consistently communicate what makes your business unique. By doing so, companies can differentiate themselves in the eyes of both customers and potential sales talent, paving the way for sustained growth and success.
Immediate actions that you can use
Conduct a USP Workshop: Organize a workshop with your sales and leadership teams to dive deep into your current unique selling proposition (USP). Use this session to critically assess whether your USP truly differentiates your offering from the competition and aligns with your target customers’ needs. Employ techniques like customer feedback analysis and competitor comparison to refine your USP, ensuring it’s both compelling and clearly communicated by all team members.
Revise Sales Materials and Messaging: Review and revise your sales collateral, website content, and social media messaging to ensure consistency and alignment with your refined USP. This action ensures that all touchpoints with potential customers reinforce the unique benefits of choosing your service or product. Consider involving a cross-functional team in this process to guarantee that the USP is clearly and effectively integrated across all platforms and materials.
Engage in Customer Conversations: Starting today, initiate conversations with a selection of your most valued customers. The objective is to understand why they chose your company over others. Ask specific questions to uncover the aspects of your product or service they find most valuable and unique. Use these insights to validate your USP and discover potential areas for further differentiation. This direct feedback will be invaluable in fine-tuning your sales strategy and enhancing your competitive edge in the market.
In B2B sales organizations, ensuring a robust sales force capable of adapting to market fluctuations and corporate objectives is paramount. Among the myriad factors contributing to sales teams’ success, two elements emerge as particularly crucial: the design and timely dissemination of compensation plans.
At the heart of a well-oiled sales organization lies the principle of trust, a currency of immense value in building a healthy sales culture. Transparency and punctuality in rolling out compensation plans are not merely administrative duties but foundational to establishing trust within the sales team. As we edge closer to the end of the year, the urgency of having these plans in place by January 1 cannot be overstated. Delays in distributing compensation details not only seed doubt and uncertainty but can significantly impede the sales momentum critical in the initial months of the fiscal year.
Understanding the weight of this responsibility, it’s imperative for CEOs, CFOs, and sales managers to appreciate the broader implications of compensation plans on the sales organization’s trust. These plans serve as a tangible manifestation of the company’s priorities and a roadmap for sales personnel to align their efforts with overarching business goals. More than a mere outline of potential earnings, they encapsulate strategic objectives, incentive mechanisms, and performance expectations.
In crafting these plans, it is essential to consider holistically the company’s strategic direction, market positioning, and the sales force’s role in realizing corporate ambitions. Compensation plans should not only reflect a company’s immediate revenue objectives but also its long-term growth aspirations. They ought to incentivize behaviors that align with the company’s strategic initiatives, such as penetrating new markets, enhancing customer retention, or diversifying product portfolios.
Moreover, the process of developing and communicating these plans must be imbued with clarity, foresight, and empathy. It’s not enough to dictate terms; there must be a dialogue—a genuine effort to convey the rationale behind compensation structures, changes, and expectations. This transparency ensures that sales professionals are not just recipients of a policy but active participants in a shared mission.
Timing plays a crucial role in this equation. The goal of distributing compensation plans well before the year’s end cannot be understated. This preemptive approach allows for necessary dialogues, adjustments, and mental preparations, ensuring that sales teams hit the ground running come January 1. Such punctuality respects the personal and professional timelines of sales personnel and signals the organization’s respect for their role and contributions.
In essence, creating and disseminating thoughtful, timely compensation plans are fundamental to cultivating a motivated, aligned, and high-performing sales team. These plans are not static documents but living agreements that reflect the dynamic interplay between a company’s vision and its most valuable asset—its people. As businesses navigate the complexities of market environments and strive for growth, the strategic alignment facilitated by well-conceived compensation plans becomes an invaluable lever for success.
Immediate actions that you can use
Focusing on actionable strategies is key to making theoretical knowledge practical and impactful. Here are immediate action items readers can implement today to enhance their sales organizations:
Review Your Current Compensation Plans:
Take a detailed look at your existing compensation structures. Are they aligned with your current business goals and market dynamics? This initial review is crucial for identifying areas that need adjustment or complete overhaul.
Action: Gather your sales leadership team for a briefing on current compensation structures. Initiate a discussion on how they align with company goals and market conditions.
Set a Clear Timeline for the Roll-out of New Plans:
Establish a firm deadline for the new compensation plans to be communicated to the sales team. A good practice is to aim for a distribution date well before the new fiscal year begins, allowing time for feedback and questions.
Action: Draft a project timeline today that includes key milestones like plan finalization, team briefing sessions, and the deadline for official roll-out.
Initiate Open Dialogues with Sales Teams:
Transparency and communication are vital in ensuring the sales team’s buy-in for the new compensation plans. Start conversations with your sales team about their current challenges and expectations for the upcoming plans.
Action: Schedule a series of feedback sessions or one-on-one meetings with sales representatives over the next week to gather input and address concerns regarding compensation plans.
Align Compensation Plans with Strategic Goals:
Ensure that the new compensation plans are not just numbers but are strategically designed to drive the behaviors and outcomes that align with the company’s long-term objectives.
Action: Convene a meeting with key stakeholders in sales, finance, and strategic planning today to ensure the alignment of compensation plans with the company’s strategic goals.
Implementing these action items promptly can significantly enhance the effectiveness of your sales team, align efforts with strategic goals, and foster a culture of trust and motivation within your organization.
In this sports-oriented episode of “Two Tall Guys Talking Sales,” hosts Kevin Lawson and Sean O’Shaughnessey dive into the fascinating parallels between March Madness NCAA basketball tournaments and sales strategies. Kevin and Sean take this opportunity to explore how the tournament’s structure and the season leading up to it offer valuable lessons for developing winning sales strategies.
Key Topics Discussed:
Preseason Preparation and Regular Season: The significance of constant improvement and team synergy throughout the sales season to refine strategies, similar to a basketball team’s journey to the NCAA tournament.
Tournament Strategy and Sales Planning: Drawing analogies from the NCAA’s regional competitions and seed rankings to sales approaches, market positioning, and competitive analysis.
Winning the Customer Relationship: Identifying the final sales deal as the ‘national championship game,’ focusing on strategic planning and execution to win customer trust and secure business.
Overcoming Adversity and Learning from Losses: The importance of analyzing lost sales opportunities (akin to unexpected tournament upsets) to understand and improve future sales tactics.
Sales Team Dynamics and Individual Growth: Encouraging personal development and adapting roles within the sales team for optimal performance, paralleled with a basketball team’s adjustment to injuries and game dynamics.
Key Quotes:
“The trophy in sales is the customer relationship.” – Kevin Lawson
“Only one team ends the season with a victory; similarly, in sales, there’s only one winner.” – Sean O’Shaughnessey
“It’s important to win through better execution of the plan… and hard work.” – Sean O’Shaughnessey
“We’ve got to figure out our place in the market… It’s the same progression in business.” – Kevin Lawson
This episode is a masterclass for sales professionals and leaders looking to elevate their game by drawing inspiration from March Madness’s structure, strategy, and spirit. Kevin and Sean’s dialogue reminds us of the importance of preparation, strategy, resilience, and continuous learning in the quest to win in sales. As the NCAA tournament captivates basketball fans, let it also inspire sales teams to strive for excellence, adapt to challenges, and ultimately clinch their championship trophy: a successful and lasting customer relationship
Dive into the sales world with “Two Tall Guys Talking Sales,” where hosts Kevin Lawson and Sean O’Shaughnessey engage candidly with Tom Daly from Focus Insights Group. This episode, rich with insights and anecdotes, peels back the layers of what makes or breaks sales strategies, highlighting the crucial elements of successful sales encounters. Join us as Tom shares his wealth of experience, offering invaluable advice to sales novices and veterans alike on how to excel in the sales domain.
Key Topics Discussed
The Journey from Sales Novice to Expert: Tom reflects on the early, often challenging days of sales, underscoring the importance of mentorship and learning.
Aligning Sales with Business Goals: How to ensure that sales strategies are effective and align with broader business objectives.
The Role of a Salesperson as a Business Advisor: Moving beyond the traditional sales role to become an indispensable client partner.
Building Trust and Credibility in Sales: Strategies for salespeople to become trusted advisors, leading to long-term client relationships and referrals.
The Importance of Process and Structure in Sales: Tom emphasizes the need for a disciplined approach to sales, akin to accounting, for scalability and predictability.
Advice for CEOs on Sales Process Management: Insights on how CEOs can foster a more structured and effective sales process within their organizations.
Key Quotes
Tom Daly:
“The professionals that are awesome at sales, they just simply like helping. And they like helping people in a critical way where they can’t help themselves.”
Sean O’Shaughnessey:
“Sales is about transferring trust… It’s easier to transfer trust when it’s your company. It’s harder when you’re a salesperson.”
Kevin Lawson:
“Understanding your market and understanding your value proposition is really important. When you marry those together… you become that trusted advisor.”
Focus Insights Group, LLC: Learn more about Tom’s consultancy, aiding clients to achieve their best sales year. – Focus Insights Group, LLC
Summary
This episode of “Two Tall Guys Talking Sales” delves into the essence of successful selling, from the foundational days of learning the ropes to mastering the art of becoming a business advisor rather than just a salesperson. Tom Daly, with his extensive experience and passion for sales, shares practical advice on how salespeople can truly make a difference by focusing on their clients’ needs and dreams. Whether you’re a budding salesperson looking to improve your skills or a CEO striving for sales excellence within your organization, this conversation offers a trove of insights and strategies to help you achieve your goals.
Tune in to this episode for a compelling dive into effective sales practices with Tom Daley, and discover how to transform your sales approach from transactional to transformational.
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 another insightful episode of “Two Tall Guys Talking Sales” with hosts Kevin Lawson and Sean O’Shaughnessey. In this episode, we delve into the nuances of building a robust sales pipeline, focusing on creating a team of buyers rather than sellers. This discussion is crucial for sales leaders, managers, and salespeople across various industries, whether involved in enterprise sales, repetitive sales, consumable sales, or professional services.
Key Topics Discussed
Building Multi-Threaded Relationships: The importance of establishing connections with multiple decision-makers and influencers in the client’s organization.
Strategies for New Salespeople: Tactics for entering new territories and identifying potential clients.
The Role of Sales Leaders: How sales managers can support their team in expanding their client base and building a more robust sales pipeline.
Understanding the Buying Committee: Navigating through the dynamics of group decision-making in sales.
Effective Pipeline Management: Strategies for maintaining and enriching the sales pipeline throughout the year.
The Power of Referrals and Trust: Leveraging trust and referrals to enhance sales effectiveness.
Key Quotes
Kevin: “It’s not about how complex our questions need to be to get crazy insightful answers… it’s really about doing the simple things well.”
Sean: “Don’t just focus on the VP or director… remember that every influencer in the organization will sway that top person.”
MEDDPICCC sales methodology for identifying key decision-makers and influencers – http://newsales.expert/2023/10/unlocking-sales-potential-with-meddpiccc-a-comprehensive-guide/
The concept of the Power Matrix in sales – https://www.thetrapper.com/2021/11/18/welcome-to-the-power-matrix/
Summary
In this episode, Kevin and Sean provide valuable insights into building a successful sales pipeline, emphasizing the importance of multi-threaded relationships and understanding the dynamics of the buying committee. They offer practical strategies for new and experienced sales professionals and guidance for sales leaders on supporting their teams. This episode is a must-listen for anyone looking to enhance their sales process and achieve better results in their sales endeavors. Join us next week for more on building quality relationships and effective pipeline management in sales.
Welcome to another insightful episode of “Two Tall Guys Talking Sales,” where hosts Kevin Lawson and Sean O’Shaughnessey delve into new territories’ challenges and strategies, especially in consumable sales. This episode is a treasure trove of wisdom for salespeople and leaders navigating the competitive landscape of selling products that are regularly consumed by customers. Whether you’re a seasoned sales professional or just starting in a new territory, this episode offers valuable insights into crafting successful sales strategies.
Key Topics Discussed
Strategies for New Salespeople in Established Territories: Understanding how to enter and grow in a territory with established competition.
Importance of Being a Trusted Advisor: The role of salespeople in becoming integral to their customers’ operations and decision-making processes.
Selling Beyond the Product: Emphasizing the value of the salesperson and the company in addition to the product itself.
Differentiating in a Competitive Market: How to stand out when selling products that are similar to what competitors offer.
Leveraging Non-Traditional ICPs (Ideal Client Profiles): Finding success by targeting non-traditional clients who may only purchase specific items from the sales line.
Building and Sustaining Customer Relationships: Strategies for maintaining long-term customer relationships in consumable sales.
Key Quotes
Kevin: “You’ve got to give somebody enough reason to give us a try. Whether you’ve gone through Sandler, that ‘give us a try’ is a strategy or it’s a pricing strategy, product strategy, and where you play in the market.”
Sean: “You need to get that prospect, that company that isn’t buying from you today, to buy something from you. You need to start to develop that relationship. You earn the right to sell more to them.”
Additional Resources
Book: “Challenger Sale” – Recommended by Sean for understanding how to challenge and drive customer businesses – https://a.co/d/hOtMIGp.
Sandler Training – Mentioned by Kevin as a resource for sales strategies – https://www.sandler.com/.
Summary
In this episode, Kevin and Sean provide a comprehensive guide on effectively breaking into new territories, especially in industries where products are consumed regularly. They emphasize the importance of being more than just a salesperson; being a trusted advisor and an integral part of the customer’s business. The discussion covers strategies for differentiating in a competitive market, leveraging non-traditional client profiles, and building sustainable customer relationships. This episode is a must-listen for sales professionals looking to expand their reach and deepen their impact in new territories. Join us next week for more insights on “Two Tall Guys Talking Sales.”
Welcome to another insightful episode of “Two Tall Guys Talking Sales,” where hosts, Kevin Lawson and Sean O’Shaughnessey, delve into the often-overlooked realm of consumable sales. In this episode, they explore strategies for making that initial sale and ensuring repeat business in a competitive market. Whether you’re selling paper, steel, lubricants, or any consumable product, this episode is packed with valuable insights for sales professionals at all levels.
Key Topics Discussed
The Importance of Being a Trusted Advisor: Understanding the significance of building solid customer advisory relationships in consumable sales.
Selling Beyond the Product: How to add value and differentiate yourself when selling widely available products that are similar across competitors.
Strategies for New Territory Development: Tips for sales leaders and salespeople on effectively breaking into and growing new sales territories.
Crafting a Unique Selling Proposition (USP): The necessity of developing a compelling USP, even for distributors of similar products.
Role of Sales Managers and CEOs: The importance of leadership in providing tools and processes to support the sales team in delivering value.
Maintaining Customer Satisfaction: Strategies for keeping customers engaged and ensuring repeat business in a competitive environment.
Key Quotes
Sean: “The value you bring is you. The value you bring is your ability to understand the prospect, your ability to guide the prospect.”
Kevin: “Figure out for yourself what makes the most value for your customers. When they say, ‘thank you,’ what do they say thank you for?”
Additional Resources
Book: “Challenger Sale” – Recommended for understanding the concept of challenging and driving customer business – https://a.co/d/cIUwphe.
Book: “Eliminate Your Competition” by Sean O’Shaughnessey https://a.co/d/4qCVNEP.
Summary
In this episode, Kevin and Sean provide a deep dive into the world of consumable sales, emphasizing the importance of being more than just a salesperson – being a trusted advisor. They discuss the necessity of understanding your product and your customer, crafting a unique selling proposition, and the critical role of sales managers and CEOs in empowering their teams. Whether you’re a seasoned sales professional or just starting, this episode offers practical advice and strategies to excel in the competitive market of consumable sales. Tune in to “Two Tall Guys Talking Sales” for these and more invaluable sales insights.
Welcome to another insightful episode of “Two Tall Guys Talking Sales,” where hosts Kevin Lawson and Sean O’Shaughnessey delve into the critical aspects of sales, especially as the year winds down. This episode is a must-listen for sales professionals looking to close their year on a high note. Kevin and Sean share their seasoned perspectives on prioritizing deals, managing customer relationships, and the art of effectively closing sales without succumbing to the pressure of year-end discounts.
Key Topics Discussed
The Importance of Prioritizing Deals: Understanding how to focus on deals with the highest probability of closing.
Effective Sales Strategies for Year-End: Tactics to avoid unnecessary discounts and focus on profitable deals.
Building and Maintaining Customer Trust: Strategies for nurturing trust and client relationships.
Time Management in Sales: Maximizing efficiency and effectiveness in the final sales push of the year.
Navigating Internal Processes and Decision-Makers: Tips for understanding and working within a client’s internal purchasing processes.
Post-December 15th Strategies: How to engage with clients after the critical sales period.
Key Quotes
Kevin Lawson: “Focusing on the right things is never a wrong thing. This is a time management moment. Don’t get caught up in the hype of what’s my biggest deal. Get caught up in the hype of what relationships have I secured.”
Sean O’Shaughnessey: “You need to focus on getting deals done that are profitable for the company. Don’t focus on what if I gave him a 22 percent discount that was only good for the next three days? Those are bad deals for the profitability of your company.”
Summary Paragraph
This episode of “Two Tall Guys Talking Sales” is a treasure trove of wisdom for sales professionals. Kevin and Sean, with their extensive experience, offer invaluable advice on prioritizing deals, building trust, and closing the year strongly without falling into the discount trap. Their conversation is not just about strategies but also about the mindset required to succeed in sales. This episode is your go-to resource if you want to refine your sales approach, especially as the year ends. Tune in to gain insights that could transform your sales journey!
Welcome to another episode of Two Tall Guys Talking Sales, hosted by Kevin Lawson and Sean O’Shaughnessey. This episode is a must-listen for sales professionals, managers, and business leaders who want to understand how to recover when they’ve skipped a step in the sales process. Kevin and Sean delve into the nuances of backing up, requalifying deals, and how to engage your champions effectively. Whether you’re dealing with large corporations or small family-owned businesses, this episode offers actionable insights to help you get back on track and close deals successfully.
Key Topics Discussed
The Realization Moment: Recognizing that you’ve skipped a step in the sales process and how to recover without losing trust.
The Role of a Champion: How to engage your champion to help you navigate through the complexities of the deal.
Resource Limitations: Understanding the constraints that every company faces, regardless of its size, and how to address them.
Requalifying Deals: The importance of requalifying a deal, especially one that previously went to a ‘no decision’.
Sales Process in Small Businesses: How the sales process differs when dealing with small family-owned businesses and how to adapt your approach.
Key Quotes
Kevin: “Skipping steps happens, and when you have that realization moment, it’s not a moment to try and beat somebody up.”
Sean: “You got to go to your champion and say, help me out. Save me because I’m in a bad way. I need to get all these people on board.”
Kevin: “We have to really forecast those because we could invest a lot of money. The most expensive way to buy an ERP is to buy it twice.”
Don’t miss this episode if you want to master the art of recovering from missed steps in your sales process. Kevin and Sean provide theoretical knowledge, practical steps, and real-world advice that can be immediately applied to your sales strategies. Whether you’re a seasoned sales professional or new to the field, this episode will equip you with the tools to navigate complex deals and emerge successful. Tune in now to elevate your sales game!