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.
Welcome to “Driving New Sales: Transforming Small Businesses into Sales Powerhouses,” the essential podcast for B2B sales professionals, managers, and CEOs of companies aiming for revenue growth. In today’s episode, we’re diving into the core of any thriving sales organization: the Sales Process Flowchart. Guided by Sean O’Shaughnessey, a veteran in sales strategy, we’ll explore how to craft and refine your sales process for peak efficiency and effectiveness.
Our esteemed sponsor, Kevin Lawson of Lighthouse Sales Advisors and Sales Xceleration, is our sponsor for this episode. Kevin offers unparalleled sales leadership solutions for small businesses, focusing on navigating sales growth challenges and scaling up operations through his extensive experience. Kevin’s fractional consultancy is the answer for those looking for expert guidance in sales team development without the commitment of a full-time executive.
Blueprint of Success: Discover the importance of having a well-defined Sales Process Flowchart as your guide through the sales journey.
Stages of the Sales Process: Sean breaks down each stage of the sales process, from prospecting to nurturing long-term relationships.
Customizing Your Sales Approach: Learn the significance of tailoring your sales process to fit your unique business model and industry requirements.
Visualizing the Sales Funnel: An exploration of how visualizing your sales funnel can identify potential leaks and optimize the sales journey.
Leveraging Technology: Insight into how automation tools and CRM systems can enhance your sales process and free up your team to focus on selling.
The Dynamic Nature of Sales Processes: Emphasizing the importance of continuous feedback and adaptation to keep your sales process relevant and effective.
Key Quotes
“Success doesn’t come from random acts of effort. It requires a blueprint, a master plan that orchestrates every step of the sales journey.”
“Imagine your Sales Process Flowchart as the architectural plan for a skyscraper. Without it, you’re merely stacking bricks without knowing how high they should go.”
“Technology is the wind beneath our sales team’s wings, freeing them up to do what they do best—sell.”
Additional Resources
Sales Management Association Study: Highlights the performance impact of using a formal sales process.
Harvard Business Review Study: Shows a significant revenue increase for businesses with a standardized sales process.
Action Items You Can Do Today
Develop a Visual Sales Process Flowchart: Start with a simple outline and refine it to suit your team’s needs.
Solicit Feedback from Your Sales Team: Use their frontline insights to improve your sales process.
Customize Your Approach: Ensure your sales stages align with your business model for increased efficiency.
Invest in Training and Technology: Equip your team with the necessary knowledge and tools to excel.
Embrace Continuous Improvement: Regularly update your sales process based on feedback and changing market conditions.
Today’s episode with Sean O’Shaughnessey has armed you with the knowledge to construct a Sales Process Flowchart that is the backbone of a successful sales strategy. Implementing the discussed actionable strategies will refine your sales process, making it a powerful engine for business growth. Stay tuned for more insightful episodes to further empower your journey to becoming a sales powerhouse.
Contact Information
Sean O’Shaughnessey: Email – Sean@NewSales.Expert
For more expert advice on transforming your sales strategies, don’t forget to subscribe to “Driving New Sales: Transforming Small Businesses into Sales Powerhouses.” Join us next time for another deep dive into the strategies that can elevate your sales game. Until then, keep selling smart and forging meaningful connections with your customers.
Understanding and leveraging social selling has become more crucial in a business landscape where digital presence can make or break your sales success. I guide salespeople, sales managers, and CEOs of small companies through the intricacies of social selling to ensure a solid start to the New Year.
Crafting Your Digital Persona
Your online profile, especially on LinkedIn, is often your first impression of a potential client. Is your profile projecting you as a job seeker, or does it establish you as an industry leader and expert? Updating your social media profiles to reflect your professional expertise and the value you bring to your clients is a crucial step.
Consistently sharing relevant industry content is not just about staying active online; it’s about positioning yourself as a knowledgeable and engaged leader in your field. This could be anything from exciting news articles to insightful blog posts that align with your industry and the solutions your company offers.
Engaging with Prospects on Social Platforms
While direct outreach is valuable, the real power of social selling lies in the research and insight phase. When you find a potential client on a platform like LinkedIn, engage with them by sharing content that resonates with their needs or challenges. It’s about building a connection and demonstrating value before the first sales conversation begins.
Setting Goals for Social Media Interaction
Commit to a regular posting and interaction schedule on your chosen social media platform. Aim to publish new, thoughtful content weekly, and make sure to engage with your network. This consistent presence ensures prospects find an industry professional actively contributing to the industry conversation when they research you.
Are you aware of your Social Selling Index (SSI) on LinkedIn? It’s a valuable metric that helps you gauge your effectiveness in social selling. Set goals to improve your SSI by being more active and engaging and providing value through your posts and interactions.
Attend virtual industry events and webinars. This broadens your knowledge and increases your visibility among peers and potential clients. Aim for at least one event per month to maintain a consistent presence.
In this New Year, your ability to harness the power of social selling can significantly impact your sales results. It’s not just about being present online; it’s about strategically building your digital persona to attract and engage with the right prospects.
For more insights on effectively using social selling to boost your revenue, check out my video series with the latest installment below. Let’s make this year a milestone in your sales journey.
Happy selling, and best wishes for a prosperous year ahead!
As we venture into the New Year, the key to propelling your sales, whether you’re a seasoned sales manager, a striving CEO of a small company, or an enthusiastic salesperson, lies in one critical skill: effective follow-up. My video series aims to arm you with best practices to ensure this year is your most successful yet.
A common pitfall in sales is failing to follow up swiftly and effectively. Every interaction with a client or prospect should be promptly followed by a thank you note or email. This small act signals your dedication and interest in the client’s needs. If you’re leading a team, make it a non-negotiable standard – a follow-up within 24 hours is a must.
A well-implemented CRM system is a game-changer for managing follow-ups. It should facilitate sending personalized emails with just a few clicks. If your CRM process is cumbersome, it’s time to reassess and streamline your approach. Remember, if following up feels like a chore, you’re not using your CRM effectively.
One of the golden rules in sales is to schedule the next one before ending a meeting. This practice helps maintain momentum and keeps you at the forefront of your client’s mind. It eliminates the hassle of tracking someone down later and significantly reduces the chances of being ‘ghosted.’
Consistency in follow-up is vital, but so is adapting your strategy to fit your industry’s unique rhythm. Whether it’s a few days or a month later, re-engage with clients who haven’t responded. This persistence shows your commitment to providing solutions. However, constantly tailor your follow-up timing to suit the client’s needs and industry norms.
Make following up a habit, not an afterthought. Whether you’re a VP of Sales ensuring your team adheres to this practice or a CEO looking to make a significant impact this year, diligent follow-up can be the difference between a good year and a fantastic one. Set reminders, use calendar alerts, and let your CRM be your guide in this journey.
This year, let’s resolve to excel in our follow-up game. It’s not just a sales tactic; it’s a fundamental aspect of building lasting relationships and driving success. Check out my other videos for more insights and strategies to kick-start your sales year with a bang. With the right approach, 2024 can be a year of remarkable achievements in your sales career.
Happy selling, and here’s to making this year not just great but phenomenal!
As we navigate the early stages of the New Year, the time is ripe for salespeople, managers, and CEOs of small companies to redefine their approach to sales. My mission is to guide you towards a robust start to the year. Remember, a sluggish beginning can set a challenging precedent, so let’s dive into how to kickstart your sales effectively.
At the heart of every successful sale is the ability to solve a problem. It’s not the product itself that’s key, but the solution it provides. Think beyond the immediate features of what you’re selling – drill down to the core issue it addresses for your client.
There’s a classic saying in sales: You don’t sell the drill, but the hole it makes. However, I encourage you to take this even further. It’s not just about the hole; it’s about what your client does with that hole. Your job is understanding and articulating how your product or service facilitates your client’s goals.
Your communications – proposals, emails, or presentations – should be framed around problem-solving. It’s crucial to showcase your understanding of the client’s challenges and how your product or service offers the solution. This approach makes your proposal resonate with your direct contact and with anyone else who might view it.
Documenting case studies where your product or service solved a specific problem can be incredibly powerful. These real-life examples prove your solution’s effectiveness, making your sales pitch more credible and compelling.
When drafting proposals, focus on the problem you’re solving. Avoid just listing product features or part numbers. Your proposal should narrate a story – the story of how you understand and can solve the client’s unique challenges. This approach is essential, especially when your proposal is passed along to decision-makers who might not know you yet.
In this New Year, your success in sales will hinge not just on what you sell but on how well you connect your product to the solutions your clients seek. Shift from a transactional mindset to a problem-solving approach. This is how you’ll differentiate yourself in a crowded market and drive meaningful, long-lasting client relationships.
Watch my video series for more insights and practical strategies to boost your sales this year. These videos will help you start strong and maintain momentum throughout the year.
Happy selling, and here’s to a successful and prosperous new year!
