Jonathan Farrington’s Blog

The JF Guest Author Spot

Lee Salz

There is no bigger insult to a sales person than being called a “vendor.” Are you the reason why prospects see you that way? In this article, you will learn how to be seen as a partner.

So, it’s been another round of price squeezing. Very painful! They want it cheaper and your company has tasked you with protecting margin. To make matters worse, the prospect called you one of the worst things possible… a vendor! At this point, you have probably decided that sales really isn’t fun. There is hope! You can change the entire playing field by changing your style, your approach, and your game.

Let’s look at two restaurants… McDonald’s and Morton’s. When you go to McDonald’s, you are there because you are hungry. When you go to Morton’s, you want a dining experience. McDonald’s offers value meals. Morton’s offers a high cost a la carte dining experience. If you are concerned about price, Morton’s is not for you. The McDonald’s experience involves you ordering a meal and the order is provided quickly and accurately for you. The question asked of every order at McDonald’s is, “would you like fries with that?” (Apparently, fries go with everything.) At Morton’s, the wait staff make initial recommendations, listen to the diner, make additional recommendations based on the dialogue, finish receiving the order, and the end result is a stellar meal. While both are successful restaurants, this is a metaphor for the vendor/partner relationship.

With that in mind, consider these definitions courtesy of Websters.com…

Vendor: someone who promotes or exchanges goods or services for money.
Partner: one who participates in a relationship in which each member has equal status.

Now consider these…
Customer: one that buys goods or services
Client: one that depends on the protection of another

So if you put this together, customers have vendors, but clients have partners. Let’s make a deal, we won’t call them customers anymore and they won’t call us vendors because at the end of the day, people really want to be treated as clients. Vendors don’t have clients. I suspect that this isn’t overly revolutionary for you, but let’s contrast the vendor/partner relationship.

Vendors provide data, but partners interpret the data, analyze it, and make recommendations. For example, if you were having a business review meeting and told them how many widgets and gadgets they bought, you behaved as a vendor. If you asked them why the location in Missouri bought 30% more than the past, you behaved as a partner.

Vendors take orders, partners inquire as to why they want what they want. Out of the blue, you are asked to provide a different service than you have previously provided to your client. The vendor gets it done, and probably pretty quickly too. The partner asks questions to understand why this is desired and determines the optimum way to solve the business challenge at hand.

Vendors are reactive, or even responsive, but partners are proactive. Many sales people confuse handling issues quickly as being a partner. However, a true partner looks at the business and makes recommendations before challenges are experienced by the client.

Vendors take a narrow look at the world, but partners see the world in totality. If you were selling windows and your discussions exclusively focused on the windows and their benefits and functionality, you function as a vendor. If you discuss the entire house in conjunction with “the how” the windows purchase is related, you behave as a partner.

Vendors ask for the business, but partners share their perspective of the synergies that have been identified and ask how to put a marriage together. One of my favorite vendor questions is, “what will it take to get your business today?” There was a lesson I learned at a very young age when using a similar approach. I was selling to someone and we offered a point of sale incentive for buying on the initial visit. After presenting this, the man stood up and said if the deal isn’t good tomorrow, it isn’t good today. It was over seventeen years ago, but I remember it as if it were yesterday. No one wants to be sold. Trite sales expressions create the vendor aura.

Vendors make sales, but partners formulate mutually beneficial relationships. This is all about matchmaking which will be explored further.

In the movie “Wedding Crashers,” true love is defined as the soul’s recognition of its counterpoint in another. Wouldn’t it be great if client relationships worked the same way? Well, they can and they do. When true business partnerships are formulated, both parties grow as a result. In essence, one plus one equals four. But how do you find a match?

As a sales person, it is all about the mindset. If you wake up each morning with the goal of selling something to someone, the likelihood that you will formulate a partnership is probably equal to, or less than zero. Your mindset is about peddling your wares, not understanding and solving business problems. Business partnerships come together by identifying the synergies between organizations resulting in strong benefit for both.

The mindset of a matchmaker is very different than that of the traditional salesperson. Matchmakers wake up each morning with the goal of finding common bonds with business associates. Think of Velcro. The tighter the bond between the two surfaces, the more difficult it is to separate them. Thus, the ideal business partnership is created.

But what does it take to do this well? First, you have to master your half of the equation. You need to know every bit of what your company does and who the right audience is for it. You need to understand industry challenges and issues impacting your users. The best sales people are often viewed as industry experts because they understand the pertinent issues impacting their clientele. They have invested time to study and learn what is important to their clientele and mastered those elements. Most sales people never do this. They continue to repeat the same boring sales mantra over and over again. “Can I have your business, please?”
The second component is the ability to ask key questions of the potential business partner and synthesize the information. Launching questions into the air and failing to process the information is a common mistake. When preparing for the meeting, you should know what questions you will ask and the possible responses that you might hear. You can then prepare the appropriate direction for the conversation based on those responses. Another common mistake is asking questions that have little or nothing to do with matchmaking. There are just so many questions that someone will tolerate in one session, and in totality. Therefore, you need to ask the most relevant ones. Again, proper preparation on your part will help you to avoid this pitfall.

As a salesperson, there are a number of things you can do to establish partnerships instead of vendor relationships.
• Learn and understand your company’s capabilities so you can clearly articulate them.
• Study the industry you are in. Become well-versed on the issues impacting users of your product or service.
• Ask global questions to understand the overall perspective and direction of the company, not just relative to your solution.
• Analyze your client’s data. Ask questions of them and make recommendations based on responses.
• Focus on match-making, not selling.

Lee B. Salz is President of Sales Dodo, LLC and author of “Soar Despite Your Dodo Sales Manager.” He specializes in helping companies and their sales organizations adapt and thrive in the ever-changing world of business. Lee is available for keynote speaking, business consulting, and sales training. He can be reached via email at lsalz@salesdodo.com, his website at www.salesdodo.com or by phone at 763.416.4321.

Today’s News:

Business Expert Webinars (BEW), an international community of business experts, comprising best-selling authors, award-winning speakers, and business gurus, announced its launch on Monday with more than 100 speakers and 700 live business education webinars that begin airing in May 2008.

“We are using webinar technology to deliver business eLearning,” said Lee B. Salz, President and CEO of Business Expert Webinars. Topics include all genres of business –sales, networking, public relations, marketing, real estate, human resources, entrepreneurship, management and many others.  Visitors interested in participating can view the extensive schedule and sign up for webinars here 

Each webinar is taught by a live presenter on the phone and is supported by a presentation delivered over the Internet.

“People are frustrated with the free webinar offerings where the price of admission is a sales and marketing pitch. Either the entire webinar is an infomercial or the content is delivered at a high-level in the session and concludes with, ‘if you really want to know how to do this, buy my CD, DVD, book, etc.’ Thus, they aren’t really free,” said Salz.

Business expert and author of “Selling to Big Companies,” Jill Konrath, said, “What attracted me to deliver content with Business Expert Webinars was that the experts pick very specific topics and go deep into the subject matter. This is strictly business education. Participants come away from BEW webinars with actionable information they can implement immediately. It is a great way for adults to learn valuable information inexpensively, without leaving the office.”

About Business Expert Webinars:
Business Expert Webinars is an international community of business experts that comprises best-selling authors, award-winning speakers, and business gurus. For more information, visit BusinessExpertWebinars.com.

Tomorrow: “Negotiation - How To Prepare For The Early Stages”

The right to do business has to be earned and never assumed.

Rather than doggedly asking for business, the very best salespeople work to keep the relationship moving toward a sale. They realize the need to identify how to turn their company’s products into real solutions, which must meet specific needs.

Unfortunately, our surveys confirm that the average salesperson drags the customer over old ground as much as 52 percent of the time. They are unable to provide continuous stimulation and never know when to treat an existing customer like a new one.

Conversely, exceptional salespeople make such “return” calls only 10 percent of the time. Above all, earning the right to proceed requires gaining the customer’s trust, and top salespeople work diligently to establish a climate in which the customer is willing to share information and feels comfortable doing so. The key here is integrity.

Part of the Process

Customers are persuaded when they are part of the process and not part of the audience.

Sales success today demands a radical shift from the “peddler” mentality of merely demonstrating products and expanding on their features. It requires treating the customer as a participant. More often than not, a flashy sales presentation alone alienates rather than persuades.

The best salespeople regard the sales call as a two-way conversation - not a one-sided pitch. They have developed active listening skills. Average salespeople score fairly well in their ability to provide customers with facts and figures, but top performers dramatically outscore the rest when it comes to gathering information.

In addition, how a salesperson collects information still distinguishes exceptional achievers from the rest of the pack. Top performers ask better questions and, as a result, gain much better information. Essentially, they aim to engage customers in the buying process with questions that require thoughtful answers and stimulate curiosity. These questions reveal the customer’s underlying needs.

A Fresh Approach to Selling

Many organizations have developed without objective analysis of their purpose and structure. The buying power in many industries is no longer evenly distributed — in a large number of markets, a few big firms control the majority of purchases.

The development of new marketing techniques has meant that some tasks traditionally performed by the sales team can be more effectively handled by other methods. The prime objective of all sales staff is to gain business.

From an organizational point of view, however, how they all achieve their goals must be defined in order to identify what kind and the quality of skills that are required.

Today’s News: “In a single sentence, what’s the best advice you can give us about succeeding in sales?” That’s the question posed over at Dave Kurlan’s excellent blog, and he received some very interesting responses, which you can view here

Tomorrow: Lots of preparation for a big week ahead; my good friend Keith Rosen launches his new book on Tuesday; we are heading towards the announcement of a brand new initiative - “To 100 Sales Gurus”; Top Sales Experts is being re-branded; the first edition of The JF Journal needs to be completed - so I might take a couple of hours off

As ever, wherever you are, have a great w/e and be sure to join me next week - JF

The JF Guest Author Spot

Kendra Lee

Effective consultative salespeople know how to keep their customers up at night. By that I mean they know “how to get in their customers’ heads” by asking questions that will force them to think about the issues that are important to their business. It’s up to you to become their business conscience.

True, not everyone wants to be reminded of the difficult challenges that may be confronting them, but by filling this role, a consultative seller will further enhance their credibility and value to their customers. You’ll be the person who attracts their attention and keeps their interest because of your ability to get them to focus on the important issues at hand, that can’t be overlooked.

For example, one of my customer executives was concerned about the fact that only 19% of his sales force was making their quota. At the same time, he saw an opportunity to greatly improve their revenue position based on the fact that 76% of the remaining sales force was regularly within 20% of their quotas. Last November he told me that he wanted to make it a priority to find a way to get the sales people, who were within easy reach of their quotas, to achieve their sales goals.

Viewing myself as his sales consultant even though he had not yet purchased anything, I have stayed in touch and prodded him – always to hear this was still a priority but that no action had been taken. His many business priorities had gotten in the way. I then posed one very well thought out question.

“Why was he avoiding taking action when he had already quantified the lost revenue this situation was causing?”

Based on my question – one that certainly got his attention and made, by his own admission, for some sleepless nights – he and I have established a plan that he’s now following through on. Without the prodding and attention I displayed, the opportunity to find a way to increase revenue may have been lost while he continued spending money and time, and losing revenue, on the wrong sales strategy.

In my situation, the questions to ask were fairly obvious, but it’s not always easy to know what the most effective and strategic questions to ask are. With this in mind, there are three thought-provoking questions any consultative salesperson can use that will cause their customers to hesitate and give a situation serious consideration:

What are the strategies you’re not focusing on?  — This question will cause a person to think about what they may be overlooking or not giving enough time and attention to. People frequently lose sight of even the most basic strategies for success, and you can help them become grounded again.

What is the return on investment you’re not getting, but should?  - This question will help your customer to consider if they’re achieving the results they expected, and if not, why. It’s an excellent way to address any problems or issues before they become unmanageable.
What is causing the biggest issue; your people, processes or budget?  — This question will help your customer pinpoint where their biggest challenges exist and begin to develop a plan to resolve the situation.

Once these questions are presented, it’s critical for you to continue to follow-up on what’s been asked. You may make suggestions and recommendations, but until you see your customer take action, don’t let them off the hook. And, don’t let them try to provide easy answers, otherwise nothing will be accomplished. Your interest and attentiveness to what’s being done might cause some discomfort for your customer, but by following-through, they will realize the benefits of the exercise and having you on their team.

Kendra Lee is author of “Selling Against the Goal” and president of KLA Group. Specializing in the IT industry, KLA Group helps companies rapidly penetrate new markets, break into new accounts and shorten time to revenue with new products.  Ms. Lee is a frequent speaker at national sales meetings and association events. For more information, contact the company at +1 303.741.6636 or info@klagroup.com or visit www.klagroup.com.

Today’s News: Over at Salesopedia this week, the hot topic is “Time Management” - so if you have time, you can catch some great articles here

Tomorrow: Thoughts about Ernest Shackleton and what we as leaders can learn from this incredible man.

Many organisations do not know who their major accounts are. Certainly many of the people who manage the relationships do not know and even if they know, very few people understand why this customer is a major account but that one is not.

A quick way to test this is to ask ten people in your organisation who your ten most important accounts are. You can be sure that you will receive more than ten answers. In one company we worked with, we received 56 different answers from 10 senior managers! The clarification of major accounts has been a critically important part of our work with a number of the organisations with whom we have worked.

Understand:

We need to understand our major accounts better than our ordinary customers. We need to understand the world they work in, the challenge of their markets, the competition they face etc. We need to understand the individual projects (be it fighting to win new business or managing an existing project for maximum profitability). Major Account management involves understanding who takes decisions and how, who are our competitors, how does our offering impact on the customer’s business? Those who manage, need to keep developing their skills of questioning and listening, of networking and analysing.

Plan:

If a customer is worth being called a major account, then they are worth a plan. It is of course possible to sell successfully in an unplanned way, there are always opportunities to be seized by chance. But if we are serious about developing a long term relationship and if this customer is really important to our success as a business, then we need to plan. We will look later at two types of planning. One of the most encouraging spin-offs in our work with clients is when we see the emergence of succinct, professional business plans for major accounts that cascade down into satellite plans for other parts of the business.

Influence:

There are many people to influence. We need to influence technical people and commercial people; we need to influence our customers, their clients and our colleagues. The major account manager often has little authority to tell people what to do. Instead he or she needs to influence and persuade.

Deliver:

It is good to plan and understand and influence, but our business will depend on our ability to deliver what we promise. This is often seen as the responsibility of customer service but in fact the whole organisation needs to be committed to delivering what the customer needs, the right quality, at the right time and to do it in such a way that the customer feels good about it.

Manage:

Any major account needs managing because success does not just happen. By manage, I mean doing all those things which make things go smoothly. It may be arranging a regular review meeting with the customer, or training the account team to understand the customer better or handling problems or managing complex projects. If we work hard on all six areas of account management and if we gain the trust of our customers, then we will greatly increase our chances of long term, sustainable success.

Today’s News: Very interesting message in my inbox this morning:

Hi Jonathan,

I am sending you this note to let you know about an initiative that you may find interesting for your blog.
 
Third Core works with enterprise sales organizations to hone the execution of sales and sales management behaviors. We come across many organizations, of all sizes, who either don’t have access to training and information on the basics of business-to-business sales or simply don’t know where to find it.
 
To help companies and individuals who find themselves in this position, we’ve produced a collection of video material that covers these common-sense principles of business-to-business sales and sales management. The collection also contains interviews with senior business executives as well as a number of principles-focused role plays. Our goal is to provide a collection of resources that sales organizations and individuals can use to augment their professional development efforts.
 
The material, which we will be updating regularly, can be viewed and downloaded with no controls or constraints. Best of all, access to this material is absolutely free. This means that organizations or individuals with limited to no funds can access useful resources without worrying about the cost.
 
Third Core is one of Canada’s fastest growing companies. We help our clients achieve great successes in performance by improving their sales and sales management execution capabilities. We really hope the video resources we are providing can help to share this success with organizations of all size, and look forward to hearing feedback from people who use the material.
 
The material is available at www.professionalsellingnetwork.com. No personal information is collected. There are absolutely no strings attached. We hope it helps.

Do check them out

Tomorrow: I am still on my travels, so it’s another w/e of catching up with everyone and working on ASP Profile so as ever, wherever you are, have a great w/e and be sure to be back next week. Oh, and please bookmark any posts you enjoyed this week - thanks.

The JF Guest Author Spot 

When it comes to difficult customers, you know the warning signs—they nickel-and-dime you on price, don’t return phone calls, tell you they’re the decision makers when they’re not, threaten you with your competitors, make unreasonable demands, and expect fast, complete, and reliable delivery of your service.

I call those customers PITAs: “pain in the ass” customers. PITA customers are never happy. They’re emotionally draining and they use up your valuable resources. Collect too many PITA customers and watch your profits dwindle—not a compelling scenario. Yet companies continue to accept this bad business, all the while thinking it’s better than no business.

But is it?

When organizations take bad business, they are paying a hidden opportunity cost—the opportunity lost to use their resources to go after the phenomenal clients they want and need to make money! Servicing a PITA customer takes away time we could use providing something extra for our truly great customers.

How is it we end up with a few customers that drive us crazy when we can see the warning signs a mile away? Sometimes it’s because we have a quota to meet, or our company insists we do a deal, or we think that we can turn a bad situation into a good one. We’re dreaming. Bad business is bad business. Period.

We need to attract clients who are the opposite of the PITA—clients who value what we have to offer, who communicate well, are forward-thinking, reasonable, have a good sense of humor, and will give the time, money, and resources to make any project successful. Plenty of these people exist. Since we will get what we ask for, we need to be better at asking for good clients.

Salespeople frequently say that they will sell to “anyone who fogs a mirror.” Avoid that kind of thinking. We shouldn’t target just “anyone.” “Anyone” all too frequently turns out to be a PITA customer, the one who plays the nickel-and-dime game.

You need to create a profile of your “ideal customer” so you can recognize perfect opportunities when they arise. These ideal customers are those you want to serve and the ones you will bend head over heels for. You will also use this profile when you are asking people to refer you. Think of yourself as an artist—the more color and lines you put in your description, the easier it will be for others to recognize the picture of your ideal customer and refer them to you.

For a lot of salespeople, being too specific in describing their ideal customer may seem like they might be leaving good business on the table.  We often think that if we don’t mention everything we do we’ll miss a sale. This is exactly the opposite of what happens. The more specific you are, the easier it will be for someone to refer you. A long list of the things you do¬ blurs your image. For someone to be able to refer you, they need a clear picture of you.

Create a description using the following categories:

Industry: What industry do you want your clients to come from; where does your company have a track record?

Geography: Where would these customers be based—regions of the United States, North America, Europe, Asia, Middle East, Africa?

Size Of Company: How large would the company you would most like to work with be and how do you measure its size (i.e.: number of employees, revenue, age, geographical coverage)?

Business Unit or Function: What group of people within the company are your ideal contacts—CEOs, CIOs, COOs, HR employess, salesmen, marketing people?

Type of Person: What are the personality traits (sense of humor, responsible, dedicated, integrity) of your “ideal customer?”

Situation/Need: “What sort of situation is your ideal customer in that creates the need for your help? Here are some ideas:

“My salespeople aren’t performing, our teams are not working together, we’ve just acquired another company, we have difficulty recruiting the right talent, we don’t have enough clients, our systems are at capacity, we’ll be acquiring more companies.”

And if a prospect doesn’t meet your criteria: Say NO! A PITA prospect is just the beginning of a bad relationship. The downward spiral will have begun. The cost to you will be exorbitant—your resources will be drained, you won’t make money, and you will have lost the opportunity to focus on good business. Say “No!” and a big weight will be lifted off of your shoulders. And, I’ll bet that your “ideal customer” will be right there waiting for you.

It’s not about the number of proposals we write or the number of clients we have. It’s about getting and keeping the right clients—the clients who will produce the revenue and profits we want, and who will readily refer us to others just like themselves You’ll be talking to exactly the people you want to meet and who want to meet you, and you will begin to see that you can actually have fewer leads and get more business. Your biggest challenge will be following up on all your great leads. Won’t that be terrific?

Joanne Black is a professional sales speaker and America’s leading authority on referral selling. She is the author of No More Cold Calling™: The Breakthrough System That Will Leave Your Competition in the Dust from Warner Business Books. For more information, visit www.NoMoreColdCalling.com. Phone: 415-461-8763 joanne@nomorecoldcalling.com

Today’s News: Over on Salesopedia Media, my good buddies Clayton Shold and Joe Heller are in conversation about referral selling and you can listen in here

Tomorrow: Do you really know who your most important customers are?

One can often see two ways of managing major accounts that are certain to fail. The first is management by chance. There is no control. There is no plan. No one can explain why we are winning the business or forecast how long our success will last. We do not learn from our mistakes or from our successes. This is at one extreme.

At the other extreme is management by formula. Here everything is documented, controlled and decided. I have seen one account planning process which demands that for every account the team must hold a one day orientation meeting, then gather information for twenty-one working days and then hold a two day planning session. The timescale cannot be changed. The people who must be present never change. The documents that must be prepared are described in detail. The process is a good one but it leaves no room for flexibility, common sense or the differences that exist both between accounts and departments. We need a way of managing major accounts that is effective, consistent and flexible. We need a way of working that is simple but strong. We need discipline and we need creativity.

So, how is Major Account Management like an art?

Discipline:

Artists need discipline. Think of the discipline of a dancer or a singer, they know that they work best if they create inside disciplines of their art. A poet follows certain rules of rhyme and structure and a painter knows the disciplines of colour and line.

Practice:

Every artist expects to practice. The painter sketches, trying different compositions, actors rehearse until the words are coming perfectly; the dancer works at the bar to keep fit and to perfect every movement and musicians play the piece over and over again. The performance often looks easy but we know that it took a great amount of work.

Creativity:

Discipline and practice alone will not make an outstanding artist. There needs to be a spark - something special that allows the artist to see what many others miss and to communicate their understanding powerfully and clearly. The artist allows us to see and hear things differently.

Managing a major account needs all three parts. Discipline helps us follow the plan, to be self-controlled. Practice means that we do not expect to be perfect overnight, we think and plan and prepare for every important “performance”. Creativity allows us to change the past, to find new ways to solve problems and to win opportunities. If we think of Major Account Management as an art then we will avoid the two dangers of working randomly and working rigidly.

Today’s News: The JF UK Hotel Tour kicks off in June - a series of half-day lectures  at some of the UK’s best venues and full details will be available in the next three weeks - if you would like advance notification and the ability to book early, please e-mail me at jfhoteltour2008@jonathanfarrington.com  Numbers will be strictly limited, because I have chosen smaller venues that understand the importance of customer care and who will look after my delegates appropriately. It is going to be great fun and I really look forward to meeting you. 

Tomorrow:On the JF Guest Author Spot, Leslie Buterin (My good friend BB) makes a very welcome return, with some expert advice on how to reach key decision makers.

We must recognise that we are in Major Account Management for the long term. It takes time to manage a major account and we will only receive a payback on our investment in time if we can have a long term result. In some of the organisations we have worked with this produces a tension because the whole culture is about creating a short term sales result in which product and profit are the main drivers and measures of success.

We should not underestimate what a challenge Major Account Management can be to the corporate culture. It emphasises relationship more than product, profit more than volume, and team more than individual, long term more than short term. At the same time the practical short term realities of business life need to be recognised.

One of the best ways of managing this tension is to have someone who acts as a mentor, conscience or guide to the account manager and account team. They are not involved in the day to day management of the account but are invited in to look at and comment on major proposals and presentations. Their main role is to be involved in reviewing the long term plan every few months to ensure that the relationship is as productive as possible and is reflecting the values of the organisation as a whole.

The role of the major account manager is to be responsible for the overall relationship. They influence all those involved in the account to ensure a co-ordinated, synchronised approach. The major account manager is responsible for drafting the account plan, gaining the agreement and commitment of the team and then monitoring implementation.

Major Account Management Involves Relationships Not Just a Mechanical Approach:

Under this heading we should discuss three main aspects of major account management.

• The importance of relationships in Major Account Management.
• The complexity of relationships in Major Account Management.
• Mapping relationships in Major Account Management.

Importance:
In Major Account Management it is essential that we manage people as well as processes. Of course we must get the product pricing right. We need to be excellent at administration. Our customer service and product range need to be strong. But “people buy from people” and “we are in a people business”. To manage the complex range of relationships within a major account is difficult and demanding but our ability to manage relationships will define whether or not we sustain success.

Complexity:
In a reactive sale there is only one relationship - that between the seller and the buyer. In major accounts the situation is much more complex. There are often contacts going on at many levels and many locations. In one major account, we have identified 1000 relationships between the account team of ten people and individuals representing the client. But it is not just a problem of numbers, it is often a problem of politics. Some contacts do not want us to talk to people in other departments or at different levels. It can also be that the complexity is caused by product range. The users of one product rarely speak to the specifies for another product. In any complex relationship some people will like us more than others. This is to say nothing of inter-departmental tensions. All these things make major account relationships complex and we need to recognise their complexity.

Mapping:
If relationships are important and if relationships are complex then it is essential that we find a way of mapping, analysing, planning and monitoring those relationships. Over recent years we have found that an approach based on the game of chess allows a very practical way of identifying the key issues.

If we can answer these questions confidently and communicate our thinking across the account team simply and clearly then we will be half-way to success. This approach has given people across a broad spectrum of organisations a common language and way of working.

It Can Only Be Done With Selected Customers:

The final word from this definition is selected. Choosing the right key accounts is of critical importance for three main reasons:
• We do not have the resources to treat every customer as a key account.
• Not every customer wants to be treated as a key account.
• Selection allows us to prioritise our activities in line with our overall business objectives.

Many organisations grade their major accounts simply by the size of sales for the year but the organisations we see that are really moving forward in Major Account Management take a number of other factors into account. They also make sure that everybody knows who the major accounts are and why they are major accounts. It is important to be rigorous with the selection criteria you use! You will also need to apply some form of weighting to reflect your priorities. The fact that a major account does not meet all your criteria will not disqualify it from being a major account. It will just need to score higher in other areas to qualify.

On the basis of this scoring, organisations can grade their accounts. They might be Premier, 1st and 2nd Division like a football league, or Gold, Silver and Bronze like Olympic medals or First Class, Club Class, Economy and Standby like an airline. The analogy of an airline is a good one because on one flight you can have people on Standby being entirely happy with the service they are getting, even though they know there are people getting “better” service in Club Class. Grading your accounts is not a matter of giving some customers better or worse service. It is a matter of giving all your customers appropriate service. When we select our major accounts and consistently deliver what we promise, we are managing our accounts professionally and effectively.

Today’s News: My good friend, David Bain of Purple Internet Marketing, informs me that he has a few places left for his seminar on October 2nd in London and you can obtain full details by clicking on the panel in the left hand column: I can thoroughly recommend David’s events - my own technical team attended the last one in Edinburgh and returned buzzing!

Tomorrow: A new piece from another very good buddy across the pond - “The Queen Of Cold Calling” Wendy Weiss, this week’s featured expert on Top 10 Sales Articles and you can read more about her there.

So, just what are the success factors in Key Account Management & Development?

This list, whilst not exhaustive, is not far off and will certainly provide you with an excellent guide and prompt.

• Successful Development Of The Role:

o Effective working relationships with other members of the team.
o A continuing drive to improve account team productivity.
o Management commitment to the account team’s role with opportunities for career progression.
o Re-enforcement of the role through authorised career structures, job descriptions and core training programmes.

• The Key Skills:

o Understanding the financial and legal requirements of the account.
o Understanding of the company’s business objectives.
o Understanding of the company’s commercial policies.
o Build high levels of product awareness.
o Understanding of the customer’s business objectives.
o Identify the decision makers.
o Understand the customer’s purchasing strategy.
o Assess competitive activities.
o Put together an account development plan.
o Ensure effective sales order processing.
o Build the right levels of revenue and profitability.

• The Core Skills:

o Delegation
o Interpersonal skills.
o Consultancy.
o Financial control & analysis.
o Project management.
o Man management.
o Initiative & creativity.

The Secondary Skills:

E.g. Industry knowledge, competitive knowledge, product knowledge etc.

Success Factors In Key Account Development:

• The Stages Of A Long Term Process

o Pre-sales.
o Contract negotiation.
o Implementation / Delivery.
o Review.
o Exploitation.

• Objectives For An Account Team

o Ensure that the customer is presented with a coherent and professional image of your Company as a business partner.
o Secure a long term business relationship with the customer as the basis for growing business.
o Penetrate the customer’s organisation and decision making unit creating new opportunities that can be exploited to accelerate account growth.
o Understand and document, on an ongoing basis, the customer organisations strategic business direction and organisation.
o Provide the company’s senior management team with feedback on the long term growth potential in the customer’s market sector and on critical success factors for exploiting it.
o Ensure that the company’s solutions are technically solid and based on a proper understanding of the current requirements and re-inforce the customer’s perception of the benefits of the company’s market focus.
o Ensure that the company’s total resource is delivered in a way that satisfies customer requirements and supports the objectives of the account plan.

Conclusion:

An effective Key Account Management strategy depends on selecting your key accounts intelligently, creating a strong, consistent, flexible way of working with both major accounts and other customers and then implementing the plan in a disciplined, effective, efficient manner.

One of the successes of our Key Account Management programme has been the creation of common models and language that facilitate discussion and planning across units and departments. It has also stimulated a commitment for our clients to plan long term for key relationships. Key Account Management has many implications for individuals, departments and the business as a whole. It will always be demanding, but done right it will be highly rewarding.

Today’s News: Over at Top 10 Sales Articles we are beginning to plan for the grand finale on New Years Eve - “Top Sales Article Of The Year”. Typically, we will logically have twelve finalists, ie the monthly winners, but of course this year there will only be nine as we launched in April: The prizes are going to be fantastic but we need to consider how we decide on the winner and our two options are: A poll, where visitors can vote for their favourite piece of work or we follow our normal procedure and let the expert panel decide………. or a combination of both - what do you think? Let me have your thoughts. 

Tomorrow:The all action Leanne Hoagland-Smith - the Chief People Officer and ”Queen of Article Writing” - so you can be assured of a very high quality post.

The JF Guest Author Spot

“Increase Your Profits by Keeping More Customers!” by Colleen Francis
Who are your customers, and what do they really want?

Knowing the answer to this question can help you to keep your customers longer, sell them more products over time - and increase your profits by between 75–95%. Given that the potential rewards are so great, what can you do today to dramatically lower your rate of customer departures?

First, you need to understand where those big numbers are coming from. While the figures can vary from industry to industry, retaining more customers will result in significantly higher profits and revenues for three key reasons:

1. Selling more to existing customers is 5 to 15 times less expensive than acquiring new customers (less advertising, less direct mail costs…and much less time);
2. Loyal customers will often refer you to their family, friends and colleagues, further reducing the time and cost of acquiring new customers and closing new business; and
3. Every time you lose a customer it takes time - and effort - to find a replacement.

So how can you reduce your customer departure rate?

By keeping your customers happy. The key to keeping your customers happy is to know what they want, and then find the product that provides them the best possible value - that’s it.

I can’t tell you how many deals I’ve seen go sour when an over-exuberant salesperson on the brink of closing a big deal has blown it by saying something along the lines of: “Mr. Buyer, this product is exciting because not only will it give you A, B and C which you need, but also D, E, F and G!”

Adding bells and whistles to a presentation by offering features that the customer has not said they want will only create objections and foster doubt in the customer’s mind. Even worse, it may lead them to start asking themselves whether they are paying more for extra features they don’t require - just when they were about to place their first order.

To help you keep your customers happier and longer, try some of the following best practices carried out by firms that excel in client retention:

1. Measure your current status
A very effective technique is the “third-party interview.” While many customers often won’t tell you directly the things you most need to hear, they usually aren’t nearly so reticent - or so flattering - when a third party asks them for feedback. To find out what your customers really think of you, consider hiring a consulting or telemarketing firm to conduct a customer satisfaction survey on your behalf.

2. Confirm the criteria for success
Determine what’s most important to your customers, and make sure your definition of success is consistent with theirs. Sales people often mistakenly operate from what they think is important. Instead, try to identify your prospect’s true challenges, by asking leading, open-ended questions that allow the prospect to reveal their real needs, like:

“John, when I speak to executives like yourself, they often tell me that although their business is going great, they have concerns about (a problem your product addresses). Is this a problem for you?”

Or:

“Mary, when I speak to executives like yourself, they find that our products are able to solve problems in one of three areas: (specify three key issues your product addresses). Are these problems ones you can identify with?”

The key is to pick a few serious or common problems that your product can solve. That way, you are almost guaranteed your prospect will admit that they are having the same problem, and then you can follow up by asking them to be more specific about the problems they have. Remember that as a general rule, a salesperson should talk only 20-30% of the time, and listen the remaining 70-80%. This will help you determine which product features or benefits you should focus on - and which you shouldn’t.

3. Know your customers
To serve a good client well (and to decide which clients merit the best service), you need to fully understand their strategic direction, how they operate and who makes their decisions. You or your salespeople can collect this information by writing up account plans for your largest or most profitable accounts, including a review of their industry and revenue projections, as well as how you are positioned in the industry, the threats to your position, a plan to expand within the account, your most recent customer satisfaction survey results and a plan for building and maintaining executive relationships. Then, ask your salespeople to review the plan with your managers or executives, to get additional insights on how to maximize the opportunities presented.

4. Ask questions
Last but not least, remember that the most successful salespeople uncover specific problems, and then align their products as solutions to those problems - nothing more, nothing less. So what are the right questions to ask your prospects? The right questions are those that move them from an intellectual position of knowing they have a problem that needs to be solved, to an emotional state of trusting you to solve that problem in a way that will satisfy them. In other words, the right questions are ones that reveal true buying motivations, which will get the customer engaged in a real conversation.

Unfortunately, many customers have a tendency to become frustratingly vague when asked what’s most important to them. Their first instinct may be to respond with generic or cliché statements like “to do a good job,” “to work hard” or “to be sensitive to what the customer wants.”

These phrases lack specifics, so it is critical that you clarify exactly what they mean. If your customer becomes vague, try asking some of the following specific questions, designed to elicit very specific answers:

• What are your top three priorities defining the success of this project?
• Specifically, what is most important to you?
• When you reflect on this project, what needs to be in place for you to feel that it is a complete success?
• What does success on this project look like for you?
• How will you do that?
• How will you deal with that?
• What plans have you made to handle that?
• How is that working for you?
• How do you mean?
• What have you done to fix that?
• When you say (insert vague word here), what do you mean by that?
• How will you use that to your advantage?
• How will your toughest competitor react to that?
• Is that what you really want?

If your prospect still has trouble being specific, make some suggestions to help them. And if they really don’t know what they want, start by asking them what they don’t want. Then explain that your questions are intended to help you better solve their problems - and serve their needs.

Colleen Francis, Sales Expert, President and Founder of Engage Selling Solutions, since 2001. Colleen Francis is driven by a passion for people-motivating them to reach for the highest standards of success. Colleen trains sales and marketing professionals who want to strive to get to the top… and stay there. Her innovative, no-nonsense approach is based on applying what she has observed in her fifteen-plus years in sales-revealing the common business habits of the top 10% of sales performers in all organizations. Colleen’s approach works.that’s why New York-based Sales and Marketing Magazine has rated Engage Selling Solutions as one of the top-five most effective sales-training organizations in the market today.

Distinguished by the Canadian Professional Sales Association as a Certified Sales Professional (C.S.P.). Check out Colleen and Engage Selling at www.EngageSelling.com

© 2007 Engage Selling Solutions. All rights reserved.

Major Account Management is not a single act but a series of actions which link together to produce a powerful, professional and profitable result.

There are two ways of looking at this process. One is to examine each element of Major Account Management; the other is to create a model which can be applied flexibly but effectively across a range of situations. We will first look at the elements of Major Account Management.

We created this approach for a major institution that wanted to break down the different elements of the process to be sure they were doing everything as well as possible.

• Identify
• Understand
• Plan
• Influence
• Deliver
• Manage

Identify:

Many organisations do not know who their major accounts are. Certainly many of the people who manage the relationships do not know and even if they know, very few people understand why this customer is a major account but that one is not. A quick way to test this is to ask ten people in your organisation who your ten most important accounts are. You can be sure that you will receive more than ten answers. In one company we worked with, we received 56 different answers from 10 senior managers! The clarification of major accounts has been a critically important part of our work with a number of the organisations with whom we have worked.

Understand:

We need to understand our major accounts better than our ordinary customers. We need to understand the world they work in, the challenge of their markets, the competition they face etc. We need to understand the individual projects (be it fighting to win new business or managing an existing project for maximum profitability). Major Account management involves understanding who takes decisions and how, who are our competitors, how does our offering impact on the customer’s business? Those who manage, need to keep developing their skills of questioning and listening, of networking and analysing.

Plan:

If a customer is worth being called a major account, then they are worth a plan. It is of course possible to sell successfully in an unplanned way, there are always opportunities to be seized by chance. But if we are serious about developing a long term relationship and if this customer is really important to our success as a business, then we need to plan. We will look later at two types of planning. One of the most encouraging spin-offs in our work with clients is when we see the emergence of succinct, professional business plans for major accounts that cascade down into satellite plans for other parts of the business.

Influence:

There are many people to influence. We need to influence technical people and commercial people; we need to influence our customers, their clients and our colleagues. The major account manager often has little authority to tell people what to do. Instead he or she needs to influence and persuade.

Deliver:

It is good to plan and understand and influence, but our business will depend on our ability to deliver what we promise. This is often seen as the responsibility of customer service but in fact the whole organisation needs to be committed to delivering what the customer needs, the right quality, at the right time and to do it in such a way that the customer feels good about it.

Manage:

Any major account needs managing because success does not just happen. By manage, I mean doing all those things which make things go smoothly. It may be arranging a regular review meeting with the customer, or training the account team to understand the customer better or handling problems or managing complex projects. If we work hard on all six areas of account management and if we gain the trust of our customers, then we will greatly increase our chances of long term, sustainable success.

Another great week - I will review it in detail on Monday and fully update you - I promise.

Have a great w/e, wherever you are!

JF