Business-to-business (B2B) sales is more than selling a product or service. It involves a strategic approach that includes understanding the customer’s needs, differentiating your offering, and building trust. This strategic approach is often called the three-legged stool of sales: Resonate, Differentiate, and Substantiate.
Resonating with customers is the first step (leg) in the sales process. It involves answering the questions “Why should the customer act?” and “Why should they act now?” To resonate with customers, you must understand their goals and how your product or service can meet them. This requires careful listening, understanding, and empathy.
The second leg of the stool is differentiation. This answers the question, “Why choose us?” Differentiation is all about highlighting what makes your product or service unique from the competition. This could be anything from superior quality and innovative features to excellent customer service. It’s crucial to communicate this differentiation clearly and effectively to the customer.
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.
Welcome to this week’s episode of Two Tall Guys Talking Sales, where hosts Kevin Lawson and Sean O’Shaughnessey are joined by Chris Cocca, a sales expert, to discuss the vital aspects of discovery meetings and qualifying prospects for a robust sales pipeline. Tune in as they delve into the methodologies that distinguish successful sales strategies, particularly focusing on the RAIN training concept and the essential practice of understanding client aspirations and afflictions.
Key Topics Discussed:
RAIN Training and Strategic Selling: Chris Cocca shares insights into how RAIN training complements traditional strategic selling concepts, helping salespeople better understand where their clients currently are and where they aim to be.
Aspirations and Afflictions: The discussion highlights the importance of understanding clients’ aspirations and afflictions to maximize the perceived value of offered solutions.
Gap Analysis in Sales: Kevin underscores the importance of gap analysis in sales processes, emphasizing how salespeople should position themselves as solutions within the business context.
The Role of CRM Systems: Chris stresses the significance of CRM systems in capturing and utilizing quality data for sales success, illustrating how technology underpins effective sales strategies.
Role-Playing for Sales Training: A discussion on the practical application of role-playing exercises as a method to enhance sales personnel’s discovery skills.
The Importance of Proper Discovery: Sean wraps up the discussion by reinforcing the necessity of a well-executed discovery process, which is crucial for improving sales outcomes.
Key Quotes:
Kevin Lawson: “I love that you’re tying the gap analysis because as salespeople, we need to be thinking about that gap because it’s the, where do I fit into this business as a solution?”
Sean O’Shaughnessey: “Practice makes easy for asking discovery questions. Asking those business-related questions. Curious how you do that.”
Chris Cocca: “The further apart that those aspirations and afflictions are, the more value you can show because you’ve got a lot to work with. If that gap is really narrow and you don’t define that really well, guess what happens? It’s all about price.”
Additional Resources:
“Strategic Selling” by Miller Heiman https://a.co/d/6qJH9ME
RAIN Sales Training Platform https://salesxceleration.com/news-events/transform-your-sales-performance-with-rain-group-and-sales-xceleration/
Summary:
This episode is a treasure trove of insights for any sales professional looking to sharpen their discovery skills and improve their sales strategy. From understanding the critical role of CRM systems to mastering the art of asking the right questions during client meetings, our guests cover it all. Whether you’re a seasoned sales leader or a new salesperson, this discussion offers valuable techniques that can be immediately implemented to enhance your sales process and ultimately drive better results. Don’t miss out—listen now and transform your sales approach!
Join us next week for more insightful discussions on Two Tall Guys Talking Sales.
In the lexicon of strategic business planning, the concepts of “Red Ocean” and “Blue Ocean” serve as metaphors to distinguish between different market dynamics characterized by the degree of competition. A Red Ocean symbolizes sectors with fierce competition, saturated markets, and businesses clash over a finite demand pool. The landscape is marked by aggressive price wars and incremental innovations as companies struggle to carve out and defend their market share. These are arenas where the rules are established, and the boundaries are rigid, constraining growth to zero-sum scenarios.
In stark contrast, the notion of a Blue Ocean represents the exploration or creation of new, uncontested market spaces. These are realms devoid of competition, where businesses can innovate without constraints, often leading to substantial profit margins and exponential growth. This strategic approach focuses on expanding market boundaries and catering to previously unmet customer needs, thereby rendering traditional competition irrelevant.
Despite the allure of Blue Oceans, the reality for many B2B enterprises—especially those I collaborate with—is that navigating the turbulent waters of a Red Ocean can be incredibly advantageous. These waters are not merely a battlefield but rich with signals of well-acknowledged demands and needs. This dynamic is particularly beneficial for companies in B2B markets, where clients are well-informed about their challenges. It obviates the need for businesses to invest heavily in educating potential customers about their needs, allowing them to concentrate on showcasing their solutions as the superior choice. The ease with which companies can enter these markets—where a ready pool of potential clients actively seeks solutions—should not be underestimated, especially given the typically elongated and intricate buying cycles in B2B transactions.
To thrive in such a competitive environment, a business must operate with a lean mindset, optimizing every investment in product development and customer acquisition to ensure robust returns. Mastery of organic growth channels and a robust product-led growth strategy are essential, though these are merely the initial steps toward scaling.
A focused approach, targeting a narrowly defined market segment and refining a particular aspect of the product or service, can dramatically improve customer conversion rates and foster loyalty. This strategic focus allows a company’s offerings to emerge distinctly from the competitive noise.
Implementing the ERRC framework—Eliminate, Reduce, Raise, Create—provides a structured method to differentiate a business amidst intense competition. This involves stripping away unnecessary features or processes, simplifying offerings to enhance the customer experience, amplifying key aspects of products that add significant value, and innovating to address unmet needs or create entirely new market niches.
However, introducing innovations, particularly in a Blue Ocean context, poses significant challenges. Convincing businesses to allocate budgets for unrecognizable problems requires a nuanced approach, especially in B2B settings where budget allocations are typically rigid and linked to clearly defined needs. The task of educating potential clients about new issues and subsequently persuading them of the need for novel solutions demands considerable effort. This process is often slow and resource-intensive, requiring a compelling demonstration of potential ROI to secure the necessary funding. The lack of prior recognition of the problem diminishes the perceived urgency and relevance of the solution, making it a lower priority in budget discussions.
Businesses usually budget for known issues, making securing funding for unforeseen solutions difficult. The path to budgetary approval is fraught with challenges, necessitating a strategic shift—from merely selling a solution to actively shaping the perception of a new problem. This requires sales expertise and a deep understanding of the client’s industry, strategic priorities, and the ability to align the problem and solution with the client’s long-term goals. Successfully navigating this terrain can position a company as a thought leader and pioneer in its field.
While Blue Ocean strategies are enticing because they promise reduced competition, for many B2B companies, tapping into the established demand within a Red Ocean is often more pragmatic and immediately beneficial. The key lies in outmaneuvering competitors by being more focused, efficient, and superior in delivering what customers value most.
B2B leaders should consider starting in the Red Ocean to build and scale their operations effectively before potentially transitioning to a Blue Ocean. This approach capitalizes on immediate opportunities and lays a robust foundation for future strategic expansion.
Actionable Takeaway: Critically evaluate your company’s market position and the competitive landscape using the ERRC framework. Reflect on how each framework element can be leveraged to refine your offerings and surpass your competitors. The objective is to compete and dominate by excelling in your customers’ most crucial areas.
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.
As we dive into the New Year, it’s crucial for sales professionals, managers, and CEOs of small companies to reflect on one pivotal aspect of their sales strategy – the art of negotiation. I am committed to guiding you toward more profitable deals this New Year and beyond.
Evaluating Past Deal Profitability
Take a moment to review your deals from the previous year. Were they as profitable as they could have been? The ease of offering discounts can often overshadow the challenge of selling at list price. However, your company’s profit model heavily relies on effective negotiation.
Look back at your past deals. Pinpoint the aspects where negotiations fell short. Set a clear goal for this year to avoid repeating these mistakes. Improvement begins with recognizing what didn’t work well in the past.
Embracing Continuous Learning in Negotiation
As I’ve emphasized in a previous video, continuous learning is crucial. This is particularly true in negotiation. A slight improvement in your negotiation skills can significantly impact your bottom line. Consider attending a class, webinar, or consulting with an expert to hone this skill.
If negotiation is not your forte, reach out for assistance. I’m here to offer suggestions, recommend training resources, or even provide personal training to help you negotiate more effectively.
Preparing for Negotiations Proactively
Prepare a list of items you can afford to discount and those you cannot. Develop scripts and strategies for common negotiation scenarios. This preparation will help you remain steadfast during negotiations, ensuring you don’t make concessions on a whim.
Identify services or add-ons you can offer during negotiations that provide value to your client but don’t significantly impact your costs. This strategy can be a game-changer in making your proposals more attractive while maintaining profitability.
This is the year to enhance your negotiation tactics. By doing so, you’re not just closing deals; you’re maximizing the value and profitability of each transaction. Remember, effective negotiation is not about conceding profits but finding a mutually beneficial ground where your company’s value is rightly recognized and compensated.
Happy New Year, and here’s to your profitability and success in the New Year!
Check out my video below (the final video in this year’s series to start the New Year with confidence and capability).
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
Welcome to a special episode of Two Tall Guys Talking Sales, hosted by seasoned sales professionals Kevin Lawson and Sean O’Shaughnessey. Today’s episode is a goldmine for small business owners, consultants, and sales teams looking to scale and outperform their competition.
Sean O’Shaughnessy and Kevin Lawson have decided to release these workshops as podcast episodes. The topic of this episode is Avoiding B2B Sales Mistakes that Limit Growth.
Kevin explains the importance of avoiding mistakes and continuously refining sales strategies and skills. He also discusses businesses’ challenges, such as rising costs and limited resources. Inflation, the Consumer Price Index, and labor costs impact business owners. Kevin advises businesses to adjust their prices accordingly to maintain margins. He emphasizes the need for strategic and tactical management to overcome market factors that affect business outcomes. The goal is to increase the value of the business for future saleability.
Kevin also discusses the importance of being strategic and tactical in business. He emphasizes the need to be organized, focused, and create relevant content. Salespeople should also think like marketers to attract customers.
Kevin then discusses responding to RFPs (Request for Proposals) and suggests that businesses should decide whether or not to respond based on their industry and goals. He highlights the low success rate of RFPs and encourages evaluating if it’s worth investing time in them.
The next topic is Sales Playbooks, which are comprehensive documents that help train sales teams by outlining best practices and providing guidance on client communication. Kevin explains the benefits of having a Sales Playbook but acknowledges that many businesses may not have one or have had lackluster results with them. Finally, Kevin suggests documenting a typical sales process as a foundational step toward creating an effective Sales Playbook.
Dive deep into the world of competitive analysis with Kevin Lawson and Sean O’Shaughnessey in this engaging episode of Two Tall Guys Talking Sales. In the fast-paced world of sales, it’s not just about knowing your product, but about understanding your competition, your customers, and the nuances that drive decisions. Let Kevin and Sean guide you through actionable insights to elevate your sales game.
Key Topics Discussed:
The Power of Competitive Analysis: Unlock the benefits of understanding your competition and how it empowers you as a sales leader.
Understanding ‘No Decision’: Learn why some prospects choose to remain indecisive and how you can navigate this challenge effectively.
The Role of SWOT in Sales: Deciphering how SWOT, PESTEL, and SOAR analyses can help shape your sales strategies.
Unpacking Unique Selling Proposition (USP): Knowing your USP and leveraging it against your competitors is important.
Importance of Feedback in Pricing: Sean emphasizes the need for real-time feedback, especially when your price points are met with resistance.
The Salesperson as a Guide: The role of a salesperson is to guide clients, understand their needs, and sell existing products confidently.
Key Quotes:
Kevin: “No decision comes, in my opinion, when you haven’t done a good job qualifying the prospect.”
Sean: “Looking at companies that are massively successful… It’s just a good way for a company to get better. Looking at those people and learning from them is really, really important.”
Kevin: “If you’ve already thought through how they measure value, you know how to talk to them. You become a better salesperson because you put in the work.”
Sean: “Your job is to sell the product that exists today, not the product that you wish they would hurry up and build.”
Summary: In the competitive realm of sales, it’s not just about standing out, but about understanding every piece of the puzzle. Whether it’s diving deep into SWOT analyses, ensuring that your pricing strategy aligns with market expectations, or guiding your client toward a mutually beneficial decision, every step matters. Join Kevin and Sean as they unpack these topics and more, providing you with actionable strategies to ensure your sales pitch stands out. If you’re serious about mastering the art of sales, this is an episode you won’t want to miss. Dive in now!
