Buzz

We all hear about “partnership” and “win-win” deals in sales. So, what is a partnership? And how do you know when you have a good partnership? If there was an easy answer then every organization would have nothing but good partners and business would be easy.

What makes a “good” partnership?

A partnership can be as simple as a handshake or it can be a legal document for a million-dollar deal and everything in between. I grew up in an environment and time when a person’s handshake was a binding agreement and better than any legal contract. What makes any of these partnerships work? In the majority of deals, the real measure of workability is the level of trust and respect between the two parties.

I have been in partnerships that are one sided and not beneficial to my organization. There was no trust and, in fact, this meant the partnership would become adversarial and confrontational. Not surprisingly, these relationships very quickly came apart because without trust a customer is not going to listen to your ideas and more importantly will not share the details of their business.

The partnerships that work have these characteristics: a level of trust, an openness about what is happening in the business, a defined role for each partner, and a review process that allows for resolution of any issues.

You share the details of both businesses and you are invited into the “inner circle” of each other’s business.

Why partner?

This is the most important question in the partnership. What are the benefits, reasons, and profitability for each partner? What are each partner’s strengths and weaknesses? Most importantly, what is the benefit of the partnership to your customer? If your customer sees no benefit how are you going to manage their expectations?

You create a partnership because it will grow business for both sides. A true strategic partnership evolves over many years and at that point you will discover two key things: pricing issues ease and there are very little if any competitive challenges. Why does this happen? Once you get a customer relationship to this level, the customer trusts you and treats you as if you are a member of their board of directors. You provide valued information and service. You are part of your customer’s strategic planning and part of the “inner circle.”

Why are all my customers not trusted partners?

Like any business relationship, it takes a lot of time to create a trusted partnership, and not all your customers will want that level of partnering. The old 80-20 rule kicks in here. Only about 20% of customers will value a trusted partnership. So you need to know who those customers are. You will also want to know which customers “could” become a trusted partner. You then need to focus what you need to do to make that customer a trusted partner.

At the other end of this continuum is your regular customer. Do not lose sight of these clients. They are just as important and just as valued and need to have identified metrics and an overall strategic focus. Some sales reps will lose their perspective on these accounts and either spend far too much time and effort on them or ignore them and then lose valuable opportunities to grow their business.

I have seen reps over the years that have one account that is responsible for all or most of their revenue. While this is a profitable and comfortable situation, in most cases, it is also precarious. What happens if the client goes away? What happens if the market changes? And what are you doing each year to grow and manage the relationship? As long as you know the downside and you manage the relationship with an almost fanatical focus, then it is a profitable way to manage a business or sales territory.

Sayers says: How many partnerships do you have with clients? How solid is the partnership? What are you doing to grow and mature the relationship? What is the risk if you lose the relationship? What are you doing to nurture and grow your regular customers?

I’m sure you’re familiar with the idea of the sales pipeline, right? When managers draw this on the board, you’ll notice that it looks like a funnel, with the top being big and the bottom being smaller. The idea is they want you to go out and cold call, prospect and generate as many leads as you can and put all these leads into your pipeline. Then you, and your manager, hope and pray that some of them actually turn into deals!

That’s the basic idea and that’s how virtually every sales company I’ve ever worked with or read about run their sales departments.

And there are even ratios and numbers that they assign to measure this. Out of 10 leads they might close one deal, or out of 15 leads close one or two deals, and so on.

Again, this is how 80 to 90% of salespeople and companies run their business.

But not the Top 20%

You see there are problems with the pipeline idea. The biggest problem is that 80% of all salespeople are more focused on putting prospects into their pipeline than they are on really qualifying who goes in it.

Their motto is, “If I throw enough crap on the wall, some of it will stick.” Well, excuse the pun, but that method stinks. And top closers know this.

The Top 20% have thrown their pipeline away and instead they use a sales cylinder. When you draw this on the board, the top end is the same width as the bottom end. The Top 20% want as many leads to come out as they put in, so they spend most of their time disqualifying prospects and only let in the select few who are highly qualified and likely to buy.

The Top 20% know they don’t need practice pitching unqualified leads; rather they need practice finding real buyers. Because of this, the Top 20% usually generate the lowest number of leads in the office but have the highest closing ratios of the sales team.

What can you do to exchange your sales pipeline for a sales cylinder? Follow this five-step process:

Number 1: Look at all the leads currently in your pipeline and assign a #1 to the ones you know or are pretty sure will buy, a #2 to those that might buy (but you’re not sure of), and a #3 to those you have no idea about or probably won’t – be brutally honest.

Number 2: Close and keep track of your closing ratios on each batch of leads (#1’s, #2’s, #3’s). Your closing ratio on your #1 leads should be pretty darn good, while your #3 leads probably didn’t close at all (right?).

Number 3: Because of the BIG difference in closing ratios, make a commitment right now to never send out #3 leads EVER AGAIN.

Number 4: Make your new goal to always close at or better than your closing percentage of #1 leads.

Number 5: Be ruthless regarding the kinds of prospects you now let into your sales cylinder. Primarily #1’s and only sometimes #2’s should be let in.

Bottom line – If you want to become a Top 20% closer, then you have to stop spending time with unqualified leads and start spending time finding, qualifying and closing real buyers.

Tip for this week: Draw a picture of a cylinder on a big piece of paper and tape it above your desk. Ask yourself from now on, “Does this lead deserve to go into my cylinder?”

Prospect, qualify, present and close. These are the basic elements of the conventional sales process that most sales organizations and salespeople still follow today. The conventional sales process is the most widely used selling paradigm for good reason: it works. That is, it works if you have a simple sale. Problem is, the world in which we sell has changed. We must deal with complex problems and correspondingly complex solutions that involve multiple decisions and multiple decision-makers—most of whom are having an increasingly hard time understanding their own problems and the solutions that will best resolve them.

When you follow the conventional sales process in a complex sale, you run head first into a series of traps that grow progressively more difficult to avoid and that make a positive outcome for the sale ever less likely. They are as follows:

 

The Assumption Trap

How many times have you heard or perhaps said yourself: “My customers just don’t get it.”? The reality behind that statement of frustration is not too difficult to figure out: Customers don’t “get it” for one of two reasons: Either you are overestimating the value your solutions bring to the customer or you are overestimating the customer’s ability to comprehend that value.

Assuming that the solution offered actually has value, the flawed logic behind the “customer doesn’t get it” complaint is that the salespeople who say it are, in essence, blaming customers for being unprepared to buy their solutions. They are implying that customers should somehow be ready to effectively analyze and evaluate custom programs, such as a safety or new product launch, that they may buy once a year or less. Or, even more illogically, that their customers should have a high-quality decision process capable of evaluating leading-edge solutions, which they may have never considered before, or which may be appearing in the marketplace for the first time.

The best salespeople walk into an opportunity at much higher levels of experience than their customers. They know the products, services and programs they are bringing to market inside and out. In addition, they spend most of their time with customers. They see an entire industry, come into contact with a full range of operational practices, and often become experts in their customers’ businesses. But the advanced perspective and comprehension of sales professionals experienced in the complex sale stands in vivid contrast to the perspective of their potential customers.

The Presentation Trap

Sales organizations devote tremendous amounts of time and resources to creating compelling presentations and proposals. The irony is that most of this effort is lost on customers. Presentations, too early in complex decisions, are largely a waste of time.

Conventional salespeople hate to hear this; the presentation is the key weapon in their sales arsenal. It is their security blanket, their comfort zone, and they loathe giving it up. “Wait a minute,” they protest. “Our presentations are aimed at educating customers. They will not buy what they don’t understand.” This much is true. And admittedly, a presentation can lift the customer’s level of comprehension. But, it is one of the least effective methods for doing so. Why is that? There are three reasons:

1. A presentation, even one that includes advanced multimedia elements, is, in its essence, a lecture. The salesperson teaches by telling. The big problem with this method is that hardly anyone remembers what they hear. The generally accepted rule of thumb among learning experts is that over half of even the most sophisticated presentation is lost.

2. A typical sales presentation rarely devotes more than 10 to 20 percent of its focus to the customer and their current situation. Generally, 80 to 90 percent of a typical sales presentation is devoted to describing the salesperson’s company, its solutions and the future being sold. While customers may be greatly impressed with the offering being presented, they still lack a compelling understanding of how it applies to their situation and why they should buy it.

3. Your competitors are following the same strategy; they are busy presenting as well. Your customers have meetings set up with you and one, two or even more of your competitors. In each meeting, a sales team is presenting the best side of their solutions. Your team is telling the customer that he needs the solutions that only your company offers and each of your competitors is making the same argument about their solutions.

The Adversarial Trap

When salespeople start “overcoming objections” (often raised during the presentation) they are, by definition, placing themselves in conflict with their customers. At best, this sets the stage for polite disagreements and respectful differences of opinion. At worst, it turns the sales process into a battle in which the seller must somehow conquer the buyer to win the sale.

The conflict between buyer and seller is exacerbated by the frustration that results from the miscommunication engendered by the conventional process. Salespeople are presenting professionally packaged data complete with executive summaries that their prospective customers find either unintelligible or unconnected to their situation. Confused and with no sound basis upon which to evaluate the information, customers respond negatively. Conventional salespeople, who are overestimating their customers’ level of comprehension, interpret this as an objection to be overcome and swing into action. “No,” they say. “You don’t get it. You do need our solution and here’s why…” Now the salespeople are arguing with their customers.

What happens next? If the customers don’t shut down the presentation altogether, they may offer a second negative response. Another round of verbal sparring ensues. The customers’ frustrations turn into exasperation. But, now the sale is in doubt and the salespeople know that the customers need the solution, so they escalate their efforts. The downward spiral accelerates. The sale has turned into a battle…a battle in which customers will always have the final say.

The three traps described above are the fundamental problems facing salespeople who try to impose a traditional sales process on complex problems and solutions. Quite often, each trap segues neatly into the next. The result is a confused and disheartened customer who ends up going with a competitor’s solution because it’s “cheaper”—after all, when he doesn’t understand his problem or your solution, all he can do is fall back on the common denominator of price. And the unpleasant experience deepens the schism between sales professional and customer.

The above problems are what manufacturing quality guru W. Edwards Deming defined as systemic problems. We can’t solve them by disciplining individual salespeople who step over some arbitrary line. Instead, it is the process itself that causes the problem. The only effective and enduring way to resolve these problems is to set aside the conflicting elements of the conventional selling process. You must adopt a whole new paradigm: one based on positioning yourself as a valued and trusted advisor who manages quality decisions—one that takes into account the complex new world in which we live and work.