Sales Influence Video Tip #45 – Selling Price, Profit or Positioning in B2B Sales

by Victor Antonio

Here’s a video reminder about how the conversations you’re having are determined by who you’re speaking to within an organization.

• If you’re talking price, then you’re most likely speaking to someone whose job it is to focus on reducing price.
• If you’re talking value, then you’re probably talking to the right person who understands how you can help them grow their revenue and market share.

Conversations matter!   Watch the video and ask yourself, “What kind of conversations am I having with my client?”

B2B Sales Video: Consultative Selling – The Mack Hanan Formula

by Victor Antonio—

Mack Hanan wrote Consultative Selling in 1970 and in my opinion is one of the best, if not THE BEST, book on the B2B sales process.  Some may disagree,…and that’s okay.  In his book, Hanan outlined a simple 3 part formula that outlines what specific value the client is looking for when you’re trying to sell them your product or service.

Don’t be fooled by the formula’s simplicity; that’s why it is powerful.  You don’t have to memorize complicated selling schemes; just follow Hanan’s formula next time you present to a client and you may find yourself closing more B2B deals!

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IT Study – Motivating Factors as to Why Client’s Buy

by Victor Antonio

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Last week I posted a video titled “Reduce Costs or Increase Revenue” which highlighted the three primary motivating factors for a client to make a buying decision:

– Increase Revenue (sales)

– Reduce (cut) Cost and

– Avoid Missed Opportunities

I stated that the most impactful of the three was showing clients how they could ‘reduce cost’ because clients can quantify, control and make permanent those cost reductions.

I’ve had a few people question whether leading off a presentation with Reduce Cost scenarios has more impact than Increasing Revenues projections.  So I dug a little deep and found this IT survey done on small and medium size businesses (SMB) that further validates this point.

A sample of 500 SMBs where asked to list the top 3 motivating factors for buying new technology.  As you can see from the graph, second to “Increasing Productivity” (which is a cost cutting measure to increase cash flow) is ” Cut Cost”.  You’ll note that “Increase Revenue”  (sales) comes in sixth in terms of motivating factors.

(Click on image to enlarge)

 

Survey of IT Buyers

source: marone-lunsford (2005)

It’s important to emphasize once more that addressing cost cutting, increase revenue and avoid miss opportunities are all relevant and warrant a discussion with the client.  The only point I wish to make here is that putting more emphasis on how your product or service can help them reduce costs will probably resonate more with your client.

B2B Sales Video: Reduce Cost or Increase Revenue?

by Victor Antonio

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When we’re presenting to a client, there are generally three areas where our product or service solution might be able to help:

• reduce the client’s costs
• increase the client’s revenues
• help the client avoid missed opportunities

Which of these (3) do you think will carry more weight (i.e., is more believable) with the client?   This video answers that question.

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B2B Selling Your High Tech ‘Abilities’: Reliability (1 of 4)

by Victor Antonio

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Most high-tech salespeople love to talk about their “-abilities”:  Reliability, Upgradeability, Compatibility and Expandability.  Salespeople feel stronger and more confident when they can use their ‘abilities’ to convince the customer to make a buying decision.

But what happens when the customer still doesn’t buy?   What happens when you keep repeating your abilities but get no response or pulse from the customer?  Many salespeople overuse their company’s abilities and end up sounding like everyone else which in the end has the affect of dulling a customer’s buying senses.

So, how do you sell ‘abilities’ effectively?  

Let’s start with reliability in this first of four article series on B2B selling.

Selling Reliability
:  In any B2B selling situation whether product or service, mostly the former, the term reliability is bound to be raised as a point of contention or objection. Twenty years ago reliability was much more of an issue then it is today when it came to hardware sales. Today, with the improvement of semiconductor electronics, the consolidation of component on chips or boards and the reduced dependence on moveable parts (e.g., mechanical v. electronics), reliability is less of an issue when it comes to hardware.
Reliability as it applies to selling software on the other hand is another animal altogether.

As programs have gotten more robust, requiring millions of lines of codes, they’ve become more susceptible to ‘bugs’ and operating system errors.

There are three basic strategies for overcoming reliability objections or issues with software and/or hardware products:

Strategy #1:  References are only good when they are similar in company structure and needs.  If you have customer with similar profiles to the company you’re trying to sell to, use that customer as a reference.  The reference company should have a similar profile in terms of requirements (e.g., many offices distributed, over 1,000 employees who’ll access the system, etc.).

Warning: Using a company’s competitor as a reference can backfire.

Strategy #2:  Agree to set up an onsite trial where the software (or hardware) can be used and exercised to it’s fullest. This strategy is referred to as ‘beta testing’. One approach is to use one of the company’s smaller departments. The benefit to you the salesperson is that you’ll be able provide and support a more controlled environment. If the software or hardware works within the department, you will be able to leverage that success company-wide. Warning: These tests should only be done when your product(s) has passed your own ‘bug & crash’ test.

Strategy #3:  Many large corporations have some type of certification program.  Some of these programs are either done in-house or outsourced to some third-party company who specializes in testing products. Take a look at one of your appliances at home and you’ll note that it has been certified as reliable by some third-party laboratory (e.g., U.L.).  If a company has an in-house certification program, the first step in the selling process is to get the product approved.  Here is where a salesperson’s technical support team can play a key role in ‘helping and expediting’ the certification along.  If the certification is to be done by a third party, all you can do is hope your product passes.  The key here is to get your product(s) approved and “spec’d in” (i.e., specifications approved) by the company. Once this happens, a path is cleared for the salesperson to begin the selling process.

In all three strategies, a lot of selling has to be done, not so much about the product, but about your company. Buyers need to know that your product is highly reliable and that you are equipped to support it over the long run.  Keep in mind that a buyer has to invest time and effort just to help ‘you’ sell them.  Great salespeople understand that they are inconveniencing the company. Which is why great salespeople will do anything and everything to make sure the testing phase goes smoothly without undue demands on the potential buyer.  These types of sales have long cycles and require patience, understanding and flexibility on the part of the seller.

ROI – Defining the Impact Areas

By Victor Antonio

If you’re in the ‘Systems Automation’ business, then one of the best ways to prepare for a sales presentation is being able to define the areas of impact your product or service will have on the client’s direct costs or operating expenses.

A mistake many B2B salespeople make during the presentation and proposal phase of the sales process is to present their product/service/solution and slightly touch on a few possible impact areas.   Mistake!  Don’t make the client work at having to connect the dots between what you offer and their problem areas; that’s your job!

To be able to do this effectively requires some upfront thinking and preparation.  Start by listing out all the possible areas of impact your product or service addresses.  For example, let’s say you offer an automation product or software that will automate steps in the client’s manufacturing process or automate steps on the processing-side of a service-based business.

Here’s a short list of some the areas are you most likely to impact:

• Reduce Rejection Rates
• Reduced (Wo)Manhours
• Reduce Headcount
• Reduce Maintenance Cost and/or Fees
• Reduce Number of Suppliers (in supply chain)
• Reduce Material Expenses
• Combines Processes to Reduce Cost
• Reduce Human Error (reduce handling)
• Reduce Utility Cost
• Reduce Workstation-System Workspace (area)
• Reduce Software Application Licenses

Can you think of a few more?

Once you’ve compiled a complete list of impact areas, the next step is to analyze and assign each impact area a value (e.g., estimated number of hours reduced, dollars saved, days reduced, area utilization, and so on).   Lastly, incorporate these reductions and savings into your presentation and proposal.

If done correctly, you’ve just moved up one step on the VCS Value Ladder.  What is the Value Ladder?  Well, that’s another posting altogether 🙂

Profit Improvement Challenge

by Victor Antonio

I have a challenge to my B2B salespeople reading this post.  In order to prepare yourself well before your next presentation, here’s what I’d like you to do.  I would like you to take a moment and list out, in detail, how your product (or service) can help improve your client’s margins.

If you offer a new technology product or service, list out every way you can conceive of that the product can either INCREASE the client’s revenues or REDUCE the client’s direct costs or operating expenses.  No soft science here!  I’m looking for you to qualify the area of improvement and quantify by how much you can improve on it.

Here are some examples that might stir some thinking:

• If you offer a product that could help the company sell more, describe by how much?
• If you can help the client sell more, faster, by how much will that impact their inventory turnover time?
• If you can reduce the client’s production cost, quantify by how much?
• If you offer a service that will allow the company to outsource or automate, how much will that mean in savings and/or revenues?

If you can demonstrate how you can improve the client’s margin, take that information and put it into your presentation.  There’s nothing more powerful in selling than showing a client how they will win if they buy from you.  The most vital part of the sales process is the presentation.  Don’t blow it by doing what the majority of salespeople do; a product presentation that ends with, “What do you think Mr. Client?”

Winning the deal means taking the time to research, understand, and socialize your client’s business problems and integrating those concerns into a presentation that details how your products or services address those concerns.  A great B2B sales presentation has the following ingredients: one part understanding their business, one part knowing which products (or services) to suggest and one part analysis on Return On Investment.

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B2B Sales Training Video #1 : ROI and Circulating Capital

by Victor Antonio

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Whether selling a product or a service, one of the keys to positioning yourself as a “sales partner” it to be able to understand the client’s business, but moreover understand what are some of the key pressure points you may be able to impact or improve on.

In this video, I cover the basic pressure points most manufacturers have to deal with.   The goal of the video is to make you, the B2B salesperson, cognizant of where you might be able to help your client which in turn will lead to a sale.

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Product versus Profit Presentation

by Victor Antonio

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In any B2B sales situation, it is incumbent upon the salesperson to improve a client’s ability to circulate their capital quicker. This can be done through increasing sales, shortening account receivables or increasing inventory turns.

The ability to increase a client’s sales revenues or decrease their cost are the two main pistons that power any company.  The engine that drives these pistons is the ability to turnover (or accelerate) capital in the most cost effective way.  B2B buyers want to buy products or services that can help them achieve those goals.

So before you give your next sales presentation, here are some questions for you to consider:

• Does my product (or service) help increase revenue or decrease cost?
• Does my presentation describe how it does that?
• Can I quantify those increases or decreases in terms of the client’s business?
• If so, how soon can the B2B client expect to see a Return On Investment (ROI)?
• Do I provide the B2B client with proof on how my products help increase revenue or decrease cost?

Whether you’re dealing with the CXO or a Product Line Manager, both want to know the same thing; how can you help me grow?  Your ability to qualify and quantify your proposal in terms of the client’s business unit is the key differentiator in any sales scenario with your competitor.  Selling in today’s environment has changed.

Value Centric Take-away:  Clients no longer want only a product presentation, they also expect to see your profit presentation!

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Note: I’ll be posting a video in a few days to illustrate this point.

The Value Conundrum: Cost Savings v. Revenue Increases

by Victor Antonio

When selling a client on value, you’re left with either showing the client how you can reduce their cost or increase their revenue.   Either way, what you’re proposing is a way for the client to improve their profit margin.  Convincing a client that you can help them reduce cost is a far easier sale then convincing them you can help increase their revenue.

Which creates a ‘value conundrum’ when it comes to selling value.  More often than not, clients value a company that can show them how to increase their revenue more than they do a company who can help them reduce their cost.   That said, leading off with a strong cost saving strategy for the client will give you more sure footing than trying to convince the client that you can help them increase sales.  Three reasons why this is so:

1) In general, cost savings are always easier to quantify as compared to a potential revenue increase.  Because they’re easier to quantify (i.e., more objective and tangible), the client is more inclined to believe what you the salesperson (or Business Development) is proposing.

2) Clients know that they have more control over reducing cost than increasing revenue.  Showing the client how your product(s) can help them control their cost give the client a sense of control and ownership of the results.

3) Cost reduction are perceived to have more permanence compared to increase sales/revenues.  When a cost saving measure is implemented, it’s more permanent compared to an increase in potential revenue.

So although cost savings take a backseat to increase revenues when it comes to positioning your product, having the former gives you a stronger position from which to present from.  When selling the advantage of your product or service, lead with cost saving metrics because they’re easier to justify and defend compared to promises of increase revenues if they buy.

Value Centric Take-away: When presenting to your client, lead with cost saving proof and then introduce potential revenue increases they’ll derive from buying your product or service.