Understanding and effectively communicating your value proposition is crucial for success in B2B sales. It can be the difference between winning and losing a deal. Whether you’re a salesperson, a sales manager, or the CEO of a small company, this topic is extremely relevant.
A value proposition is not merely a catchy slogan or a well-crafted elevator pitch. It is a broader collection of reasons why a potential buyer should choose your product or service. A value proposition identifies the customer’s needs and goals and demonstrates how your product or service can address these.
One key aspect of a value proposition is its ability to resonate with the customer. This involves deeply understanding the customer’s needs and tailoring your proposition to their specific situation. This allows the sales team to find the match between the customer’s needs and your offer. To resonate effectively, you need to answer two key questions for the customer: Why act? And why now?
The ‘why act’ question establishes the need for your product or service. If the customer doesn’t see a need, they won’t be interested, no matter how great your offering is. The ‘why now’ question creates a sense of urgency. Without this, a customer may acknowledge the need for your product or service but see no reason to act immediately.
The symbiotic relationship between sales and marketing is more crucial than ever. This dynamic duo drives the revenue generation engine, which is especially crucial when businesses are keen to set a positive trajectory.
Marketing’s influence cannot be understated. It often shapes the business’s success months in advance. Strategies implemented by marketing today can significantly impact revenue streams later in the year. Therefore, it’s essential for sales and marketing to align and integrate their processes to ensure that marketing efforts translate into tangible sales results.
In this context, sales enablement emerges as a key strategy, bridging marketing initiatives and sales execution. By segmenting the customer journey into three categories—leads, prospects, and customers—both teams can tailor their strategies to effectively move individuals through the sales funnel. Marketing focuses on generating awareness and attracting leads, while sales teams convert these leads into qualified prospects and, ultimately, loyal customers.
The conversation around leads often circles back to the quality of leads generated by marketing and the clarity with which sales teams define what constitutes a ‘good lead.’ This mutual understanding and cooperative process streamline efforts and ensure that marketing is not just generating leads but the right leads.
Moreover, discussing the effectiveness versus efficiency in marketing strategies can significantly refine the targeting process. Marketing must be efficient and effective, emphasizing the right messaging and content that resonates with the ideal client profile (ICP). This approach ensures that the prospects entering the sales pipeline are more likely to convert as they align closely with the business’s target demographic.
A noteworthy strategy for enhancing this alignment is developing a concise value selling proposition. This tool aids marketing teams in crafting messages that encapsulate what the business does in a clear, compelling manner, which sales teams can then leverage to engage and convert leads effectively.
For smaller businesses or those without extensive in-house marketing teams, sales leadership can strategically define and refine marketing strategies. Questions like “Why do people pay us?” or “What differentiates us from our competition?” can ignite discussions pinpointing the business’s core value. Engaging directly with customers to understand why they chose and continue to choose your company provides invaluable insights that can shape future marketing and sales strategies.
Ultimately, the integration of sales and marketing is not merely about aligning goals but about creating a cohesive strategy that utilizes the strengths of each to optimize the customer journey. Whether it involves developing compelling content that speaks directly to the needs of potential clients or refining the sales process to highlight the value over features, each element is crucial in building a robust sales and marketing framework that attracts and retains customers.
For businesses looking to deepen their understanding of this integral relationship, embracing discussions around sales enablement, value proposition, and customer feedback is essential. These elements are not just isolated tactics but parts of a comprehensive approach that can dramatically improve how businesses attract and maintain their customer base, ensuring sustained growth and success.
Company leaders can start implementing some of these topics today!
Evaluate Your Current Sales and Marketing Alignment: Take the time today to review how your sales and marketing teams are currently aligned. Identify any gaps in communication or process and schedule a meeting to discuss these findings with both teams. This will help set the stage for improved collaboration and efficiency.
Define Your Ideal Customer Profile (ICP): If you haven’t already, work on defining or refining your ICP. This involves gathering insights from your sales and marketing teams to ensure the profile accurately reflects the customers most likely to buy and benefit from your product or service. This alignment is critical for targeting and attracting the right leads.
Develop a Concise Value Proposition: Collaborate with key stakeholders from both teams to craft a clear, compelling value proposition that communicates the unique benefits of your offerings. This should be a concise statement that potential customers can easily communicate and understand, guiding your marketing content and sales pitches.
Solicit Customer Feedback: Contact a select group of new and long-term customers to gather feedback on why they chose your company and why they stay. Use this feedback to adjust your sales strategies and marketing messages, ensuring they resonate deeply with your target audience and reflect the actual value you provide.
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 today’s competitive B2B sales landscape, integrating account-based marketing (ABM) with named account strategies has emerged as a pivotal methodology for companies aiming to refine their sales and marketing efforts. This approach not only harnesses the synergy between sales and marketing teams but also paves the way for more targeted and personalized outreach to key accounts. As we delve into the intricacies of launching a named account strategy, it becomes evident that preparation, collaboration, and implementing a systematic approach are crucial for success.
The journey toward effective account-based marketing begins with a fundamental prerequisite: a cohesive collaboration between the sales and marketing departments. This collaboration is not merely about working side by side; it’s about integrating efforts to create a unified strategy that precisely targets specific accounts. The essence of ABM lies in its ability to focus on named accounts, requiring a deep understanding of the target company’s industry, size, locations, and organizational structure. This understanding is critical in crafting personalized marketing strategies that resonate with the targeted accounts.
Personalization stands at the core of ABM, extending beyond mere customization of presentations. It involves tailoring websites and landing pages and even creating dedicated customer portals to ensure that the marketing content is highly relevant and engaging to the named accounts. Such personalized experiences foster a deeper connection between the company and its potential clients, significantly enhancing the likelihood of conversion.
The role of sales and marketing leaders in this context cannot be overstated. These leaders must not only strategize but also ensure the alignment of resources to effectively target the named accounts. This includes determining the feasibility of creating bespoke marketing tools such as personalized portals, ensuring the marketing team is equipped with the necessary skills and creativity, and categorizing clients to focus efforts where they are most likely to yield returns.
Real-world applications of ABM strategies underscore the potential for dramatic improvements in customer engagement and sales success. For instance, creating custom videos that depict a “day in the life” scenario using a company’s products can significantly impact customer perceptions and decision-making processes. Although resource-intensive, such initiatives highlight the lengths companies can go to provide a unique and compelling value proposition to their named accounts.
Moreover, the advent of digital tools and platforms has facilitated new forms of personalized outreach, such as video messages tailored to specific prospects. This approach exemplifies “account-based marketing light,” offering a personalized touchpoint that can significantly increase a prospect’s chances of engagement. The utilization of such innovative tactics indicates the evolving nature of ABM and its capacity to adapt to the changing dynamics of customer engagement.
As companies strive to navigate the complexities of named account strategies and account-based marketing, integrating these methodologies presents a promising avenue for achieving sales excellence. The emphasis on personalization, strategic alignment, and the judicious use of resources is paramount in realizing the full potential of ABM. Through meticulous planning, collaboration, and the deployment of targeted marketing strategies, sales organizations can enhance their outreach, foster meaningful connections with key accounts, and drive significant growth and success in today’s competitive market landscape.
Immediate Action Items for Implementing Account-Based Marketing (ABM) Strategies
1. Initiate a Cross-Departmental Strategy Session
The first step towards implementing a successful account-based marketing strategy is fostering an environment of collaboration between sales and marketing teams. Organize a strategy session that includes key stakeholders from both departments. The aim of this meeting should be multifaceted: to establish a common understanding of the ABM approach, to identify and agree on the named accounts to target, and to brainstorm personalized outreach strategies that resonate with these accounts. Actionable advice for today includes scheduling this strategy session, outlining its objectives, and preparing an agenda that encourages open dialogue and alignment of sales and marketing efforts.
2. Develop a Deep Understanding of Target Accounts
Gaining a profound insight into the named accounts is crucial for tailoring your ABM strategies effectively. Start by collecting and analyzing data on the target companies’ industries, sizes, geographical locations, and organizational structures. Utilize available digital tools and platforms for data analytics to facilitate this process. Today, focus on creating a template or framework for profiling each named account, which includes key information such as business needs, current challenges, and potential opportunities for your solutions. This template will guide your team in developing personalized marketing and sales strategies that are directly relevant to each account.
3. Invest in Personalization Tools and Techniques
The essence of ABM lies in its personalization capabilities. Today, make it a priority to explore and invest in digital tools and resources that enable high levels of customization in your outreach efforts. This could include software for creating personalized websites and landing pages, tools for developing custom video content, or platforms that allow for the sending of personalized video messages. Start by identifying at least one tool or technique that can be implemented immediately to enhance your personalized outreach. This might involve setting up a pilot project to create a custom video for a key account or designing a personalized landing page for another. The goal is to take tangible steps towards creating a more personalized experience for your named accounts, thereby fostering stronger connections and increasing the likelihood of conversion.
Actionable Conclusion:
By taking these immediate steps, companies can set the foundation for a robust account-based marketing strategy that not only aligns sales and marketing efforts but also significantly enhances the personalization of outreach to key accounts. Remember, the success of ABM lies in the meticulous planning, collaboration, and strategic execution of personalized marketing strategies. Today’s actions lay the groundwork for tomorrow’s success in navigating the competitive landscape of B2B sales with account-based marketing at the forefront.
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, hosted by Kevin Lawson and Sean O’Shaughnessey. In this episode, the duo delves into the often overlooked but crucial sales aspect – selling consumable products. They explore strategies and insights for salespeople who deal with regularly consumed and repurchased products, such as manufacturing supplies, paper products, and even everyday items like toilet paper.
Key Topics Discussed
The Unique Challenges of Selling Consumable Products: Understanding the dynamics of selling products that are regularly used up and repurchased.
Strategic Sales Approaches: How to effectively sell consumable products in competitive markets.
The Importance of Value Proposition: Emphasizing the significance of a unique selling proposition (USP) in consumable product sales.
Salesperson’s Role in Consumable Sales: The critical impact of the salesperson’s understanding of the customer’s business and needs.
Territory Management and Growth Strategies: Effective methods for expanding sales territories and managing customer accounts.
Cross-Selling and Team Collaboration: Leveraging the strengths of a sales team through cross-pollination of skills and coaching.
Key Quotes
Sean: “In the environment we’re talking about here, where it’s a consumable product… the quality of the salesperson comes to play in a big way.”
Kevin: “You need to know where and how you compete. It’s as simple as that. Who do I call on? How do I compete? Is it price? Is it value?”
Additional Resources
Sean O’Shaughnessey’s book “Eliminate Your Competition” for more in-depth sales strategies – https://amzn.to/2K37ugx
Summary
In this episode, Kevin and Sean provide valuable insights into the world of selling consumable products. They emphasize the importance of understanding the unique challenges of this market, including the need for a strong value proposition and the crucial role of the salesperson in understanding and meeting customer needs. The discussion also covers effective territory management and the benefits of leveraging team strengths for cross-selling. This episode is a must-listen for sales professionals looking to excel in the consumable products market and for those seeking to enhance their sales strategies in competitive environments.
Listen to this episode of Two Tall Guys Talking Sales to gain valuable insights and strategies for excelling in the consumable products market, and to learn how to effectively grow your sales territory and manage customer relationships
Crafting the Beacon in Sales: The Art of Unique Selling Propositions (USPs)
The challenge in the modern B2B marketplace isn’t merely about getting noticed but about leaving an indelible mark. For businesses navigating this complex market, the guiding light—their Unique Selling Proposition (USP)—is the deciding factor. But why is a USP so quintessential, and how does one etch it masterfully?
Picture, if you will, an animated marketplace: myriad sellers, each echoing their offerings. Amidst this cacophony, it’s not the loudest but the most distinct voice that captures attention. Here lies the sublime difference between mere visibility and impactful distinction, a difference the USP embodies. Drawing from historical insights, companies that have adeptly sculpted a lucid USP not only differentiated themselves but also witnessed significant enhancement in sales. Consider a brand that doesn’t just sell a product but an ethos—for every purchase, there’s a contribution to a larger cause. Such compelling USPs have been demonstrated to escalate sales metrics impressively.
However, the journey of crafting a USP isn’t always smooth sailing. Companies often grapple with the challenge:
The Quest for Distinctiveness: Especially pertinent to sprawling enterprises, there exists an often-arduous search for that unique element. It’s like a ship amidst crosswinds, grappling for a definitive direction.
The Illusion of Resonance: A USP might be alluring, but if it fails to resonate with its core audience, it’s a misstep—a beacon that misguides rather than leads.
Navigating these challenges to etch a resonating USP is where the analytical marries the artistic. First, there’s the introspective dive—a company must be deeply attuned to its ethos, its foundational promises. Only when a company is profoundly aware of its essence can it then articulate that message to its prospects. Subsequent to this is the empirical phase, where understanding the audience becomes pivotal. What are their aspirations? Their values? Drawing upon robust market research facilitates the alignment of a USP with these consumer insights. The final stretch of this journey is iterative refinement. Much like an artist refining his masterpiece, a compelling USP emerges from continuous honing, molded by feedback and real-world resonances.
Yet, one must remember—a USP transcends being a mere slogan. In this information-rich epoch, consumers have a heightened sense of discernment. They can swiftly sieve out authentic commitments from hollow echoes. Thus, at the core of a compelling USP is the pulse of authenticity. It isn’t just what you profess; it’s what you consistently manifest.
The Unique Selling Proposition stands as a sentinel in the marketplace’s panorama. It’s not just a strategy or a tagline—it’s an assertion of identity, a clarion call proclaiming, “This is our essence. This is why we’re unparalleled.” For the architects of business strategy, CEOs, and sales visionaries, this isn’t just a task—it’s a craft. A melding of introspection, market acumen, creativity, and authenticity. In the sales narrative’s vast tapestry, a well-woven USP isn’t just a strand—it’s the golden thread that binds the story together, making it both memorable and mesmerizing.
Welcome to another exciting episode of Two Tall Guys Talking Sales with hosts Kevin Lawson and Sean O’Shaughnessey. This episode delves into the vital world of outbound sales in a post-COVID landscape. We discuss strategies for creating an effective outbound pipeline, reflecting on our experiences with trade shows, and how to nail your unique value proposition. Discover how to master omnichannel outreach and understand why persistence is key in today’s competitive market.
Key Topics Discussed:
The Trade Show Experience: Kevin and Sean open up about the highs and lows of trade shows and how the pandemic has shifted the industry’s focus from this traditional method of sales and marketing.
Creating an Effective Outbound Pipeline: Our hosts emphasize the importance of having a clear, unique value proposition and understanding how it can resonate with your potential customers.
Omni Channel Outreach: Kevin and Sean highlight the significance of reaching out to prospects across various channels – emails, phone calls, social media, and even traditional mail. They discuss the need for persistence in reaching out and making numerous touches to get a prospect’s attention.
Prospecting and Value Proposition: Sean shares insights on how a value proposition can differ based on the industry and target audience. They talk about understanding and tailoring your value proposition to your audience for better customer engagement.
Leveraging Tools for Sales Outreach: The hosts discuss a range of tools that can assist in streamlining and tracking your outreach efforts, from LinkedIn prospecting tools to CRMs and even task management tools.
Key Quotes:
Kevin: “Trade shows in a pre COVID environment were the lifeblood of many sales organizations… But here we are in a post-COVID world, and what we saw in the midst of COVID was pipeline evacuation.”
Sean: “The first thing I tell everybody is, “What are you going to say, and what makes it unique and valuable to your prospects?”
Sean: “Your unique value proposition may be targeted to a specific customer and you might have a different one targeted to a different customer… but then you need to make unique messaging for every one of those and unique tries for each one of those.”
Additional Resources:
CRM Tools
LinkedIn prospecting tools
Task management tools (Asana, Trello, Monday.com)
Summary:
In this episode of Two Tall Guys Talking Sales, Kevin Lawson and Sean O’Shaughnessey offer a practical, insightful guide to successfully navigating outbound sales in our new normal. They share their expertise in creating a compelling, unique value proposition, omnichannel outreach’s importance, and persistence’s role in sales. You’ll gain a wealth of advice, from understanding your value in a specific industry to leveraging various outreach tools to streamline and enhance your prospecting process. Listen to this episode for a deep dive into the tactics and strategies that can reshape your approach to outbound sales.
In this episode of Two Tall Guys Talking Sales, Sean O’Shaughnessey and Kevin Lawson discuss the importance of standing out and differentiating oneself in the competitive world of sales. They explore how salespeople can escape the commodity mindset and become trusted advisors to their clients, ultimately leading to more money and success.
Key takeaways from the episode include:
The importance of differentiating oneself in the sales process
Understanding and embracing the role of an expert in your field
“The Challenger Sale” book’s approach, and its impact on sales success
The dangers of proposing too early and devaluing your offering
Creating value for your clients by helping them be successful
Evaluating and improving your sales pipeline to increase revenue
The hosts also mention insightful books and previous podcast guests, such as Kelly Crandall and Jim Hardwick (both Fractional Sales VPs aligned with Sales Xceleration), who provide valuable perspectives on sales and leadership.
Sean and Kevin encourage our listeners to reach out with any questions or topics they would like to see covered in future episodes.
Don’t miss this episode full of practical advice and insights on improving your sales game, adding value to your clients, and ultimately making more money. Listen now to learn from the experts, and start transforming your sales approach today!
