Jonathan Farrington’s Blog

 

During the 1970s and 1980s, it was common for large corporations such as Hewlett Packard (Compaq) and IBM to put their new sales recruits through a twelve to eighteen-month training programme. I know, because I went through one myself, before designing the next generation.

Today, salespeople consider themselves “lucky” if they get an initial two weeks of training.

Have companies discovered that training doesn’t really pay off?

On the contrary! Training appears to be even more important today than years ago and it is getting more important all the time.

This extract from one of my favourite books ‘All Together Now’ by Sir John Harvey-Jones articulates the last point perfectly.

“There is practically no area of business where the difference between rhetoric and actuality is greater than in the handling of people. Every businessman will always claim that it is the people in his organisation who are the key to its success. Indeed it is difficult to argue anything else. A company consists of money (which can ebb and flow almost with the speed of light), of fixed investments (which by definition are obsolescent from the very moment that they have been made), and a range of products – and hopefully a market position – which are under continual attack from competitors who are trying to produce better and more desirable products for less costs.

What a company does have, and handled rightly can maintain, is the commitment, skills and abilities of its people. This is constantly attested to by the statements in company annual reports – I cannot remember the last time I failed to see the chairman’s last sentence paying tribute to his people. Yet despite all these facts our skills at enabling our people to give their best, and continuously beat the best that come against them, are remarkably tenuous. Moreover, this area of activity is seldom subject to the sort of analysis, debate and experimentation so readily devoted to fields such as production or marketing.

Even though we are all welded to the concept of continuous improvement, when did you last see an improvement plan for the management of your people? If you have seen one, I would bet long money that the plan referred to reduction of administration costs or overheads, rather than being a plan consciously adopted to enable more of our people to contribute more.”

In 1990, I had dinner with Sir John, and I was able to clarify a number of points with him face to face: He remains one of my most significant mentors.

Less Training With Higher Expectations
So, what’s going on here? How should a Sales Director reconcile the fact that many corporations today provide less upfront training for their sales staff than in years past, yet attach increasing importance to staff development?

This is hardly a surprise, because the current stock market ethos creates a powerful dis-incentive for firms to invest in their people. A firm’s investment of human capital, in the form of training and other forms of education of staff, is not separable from the general expenditure of a corporation. It therefore appears as a cost on the corporate balance sheet.

Difficult Times
Alas, many Sales Directors, having concluded that their best strategy is to cut back on training, look instead to hire people who already possess all the talent and skills needed to do the job and send them out into the field armed with what they know. But many Sales Directors know how difficult it is to find skilled salespeople. And anyway it is not possible to equate experience or seniority with success.

Huge Demands On Salespeople
The fact is that selling in today’s climate is both an art and a science. Selling is a profession that demands a far wider range of skills than ever before – skills that require continual fine-tuning and constant practice.

Lack Of Ongoing Reinforcement And Development
The operative word here is “ongoing”. Even if salespeople have undergone progressive sales training, there’s no guarantee that they will be successful. It is common knowledge that skills grow rusty over time and salespeople are prone to pick-up bad habits along the way or to simply skip steps and take shortcuts that can lead to long-term trouble. Perhaps even more important these days, is the fact that markets, competition, technologies, and customer preferences are all in a constant and accelerating state of change.

This fact requires that salespeople are able and willing to rethink their sales strategy and approach frequently and receive a regular top-up of skills and motivational coaching.

The key word here is frequent - long gone are the days, when professional salespeople could attend a “one-size fits all” program, and consider themselves qualified for life, that mentality, as I say often enough, is being relegated to the annals of selling history.

Today’s top performers, the “Top 5% Players” wake up and smell the coffee every day, before the majority have even stirred from their slumbers. 

 

Today’s News: Is again scarce, as I am still with clients in the “Heart Of England” - but I’ll make it up to you tomorrow.

I will just mention, that I made a decision with this client to introduce in a number of trusted and highly respected friends, all internationally renowned sales experts: The experiment is working superbly.

Last month, Leslie Buterin brilliantly addressed a small group of young sales professionals on “cold calling techniques” and today it was the turn of Paul McCord, to coach a group of more senior sales team members on “referral selling”

Despite the fact that he already had a mentoring appointment at 7.30am CT with his own client, he delivered a two hour session at 5am CT, to my group here in the UK. That is really quite an incredible thing to do, and indicates why Paul is another member of my “inner sanctum” of high commitment, high intelligence, high profile and high integrity friends, who will form the nucleus of something very special, which is due to launch very shortly - The Global Sales Council - a small, unique, band of brothers and sisters, with a “big-picture” international focus. More soon, I promise.

Oh, and the feedback from Paul’s session? - “Superb” “Extremely useful advice” “Excellent, thoroughly enjoyed it” ”Brilliant, what a really great presentation” “What a pleasure to listen to a master” 

I have another treat in store for the team tomorrow - Nigel Edelshain will be giving them an overview of the implications of Sales 2.0 - yep, I do spoil them.

 

Tomorrow: I have a real surprise for you on The JF Guest Author Spot - you will enjoy it!

The traditional customer call once seemed indispensable to the selling process; the time and expense involved were just a basic cost of doing business. In recent years, however, the business community has come to regard the sales call as an expenditure for which there are substitutes. For many companies telemarketing and direct mail have made the sales call a choice not an inevitability. This is not surprising when various studies suggest that getting one sales person in front of one customer now costs $1000 - this cost has trebled since 1983. As a consequence professional salespeople have to be more effective than ever to justify the investment in a face to face effort.

In essence, we can draw several conclusions and when taken together, these findings paint a picture of the current state of the sales environment.

Customer Focus Creates Competitive Advantage:
• The one term that sets top performers apart - customer focus

• Outstanding sales results depend on:
- The ability to think from the customer’s point of view
- Understanding the customer’s agenda, buying cycle and best interests

• Beyond a superficial reading of immediate customer needs, salespeople must gain a deeper understanding of both the buyer’s long-term goals and the overall business climate

• At the heart of customer focus is the art of listening constructively - the best salespeople are masters at capturing information

• Customer focus means taking the customer seriously - to-day the salesperson who clings to the product orientation of a decade ago is losing ground

• As client companies branch into new markets and unfamiliar territories, they are demanding unique, flexible solutions from their vendors - customised to support specific goals

• Another myth which can be exploded is that whilst customers value flexibility, being too flexible can undermine the sales relationship. On the whole salespeople imagine that customers value a vendor’s responsiveness above all. However recent research shows that their primary concern is reliability.

In summary, in order to maintain customer focus the best salespeople become facilitators, creating a partnership that extends the selling relationship within the customer’s company. The motivation to achieve this should be strong - it costs five times as much to attract and sell to a new customer as it does to an existing one!

The right to do business has to be earned and never assumed:
Rather than doggedly asking for the business, the very best sales people work to keep the relationship moving towards a sale. They realise 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% 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 only make such ‘return’ calls for 10% 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.

Customers are persuaded when they are part of the process and not part of the audience:
Sales success to-day 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. I.e. 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, that stimulate curiosity and that reveal the customers underlying needs.

Businesses need to re-define selling and what constitutes basic selling skills:
In to-day’s world of selling, there is less and less room for apprenticeship. Selling has become an exclusive club of highly skilled professionals where product knowledge and time management skills, for instance, are the cost of membership not leadership.

Ongoing research demonstrates that to-day’s ‘average’ salesperson is just as effective as the high performer in explaining features and benefits effectively, relating a service or product to customer needs and closing a sale. But, above this Level 1 plateau of competence, the exceptional salesperson is busy defining the “basic skills of tomorrow”.

Building an up-to-date foundation in sales competence does mean sacrificing some old notions of what it takes to succeed in a competitive marketplace. For example, a salesperson can no longer just “win by knowing”.

Every company needs to test their assumptions about what skills really contribute to sales success. Too often operating on old sales theories means training and rewarding people to do the wrong things.

When the buyer and seller act as partners, they are building a bridge to profitability:
Successful selling is definitely not about the “hit and run” sale. Sales achievers regard their relationships with key customers as a partnership and cultivate it as such. When customers face tough business challenges and complex technological choice, they rely on sales people who can assist them in making the right decisions.

The primary objective of a sales partnership has to be, to create and sustain a mutually productive relationship, which serves the needs of both parties, now and in the future. The key word here is symbiotic.

Partnership does not mean eliminating the tension between buyer and seller; it means that top-performing salespeople know how to strike a balance between achieving immediate results and developing the relationship fully.

In Summary: Why Do We Need A Fresh Approach To Selling?
Many organisations 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 organisational 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.

You will, in all probability, also enjoy: “What Are The Characteristics Of The Very Best Sales Performers?”

 

Today’s News: I haven’t mentioned Top 10 Sales Articles for what seems like ages, and yet everyone keeps telling me that the standard of articles that are being nominated each week, just gets better and better.

Only five more monthly winners to announce and then it’s Top Sales Article Of The Year time again!

Do check out this week’s superb nominations and last week’s winner by simply clicking on the banner below:

 

I recently mentioned that this blog had been chosen by Alltop and last week I learned that my Sales Manager’s Mentor Blog had also been selected - that’s a real honour! Have you been over there recently? It’s just a banner click away again - see the cool avatar below:

 

Tomorrow: This week’s “Featured Expert” over at Top Sales Experts is good buddy Jeb Blount, which means he also fills The JF Guest Author Spot, with something very topical tomorrow.

 

 

Has your business started to take a turn for the worse recently? Are your cash flow worries keeping you awake at night?

The following ten questions will help you to determine if your business is the lean mean fighting machine you believed, or a bed-ridden sick note, coughing and spluttering its way on a wobbly pair of last legs.

1.Increase in staff turnover

If you’ve watched a number of your key employees walk away from the business recently you should sit up and take notice. Staff is arguably a company’s most valuable asset and if your people are leaving, it’s often the first sign that something is going wrong.

The problem is not just the associated cost of recruitment, but also training new starters and the additional burden on remaining staff while the new team members get up to speed, that add further strain on the business.

Remedy

One of the best ways to keep track of staff morale is to hold regular reviews where employees can air their views on both the business and their specific concerns without fear of recrimination.

2. You lose a key account

It’s believed that winning a new customer is seven times more expensive than keeping an existing customer happy. Small businesses are often too reliant on a couple of main customers, as demonstrated in the collapse of MG Rover and Courts a few years back.

There are a number of reasons key accounts could defect: Your product or service is not of the standard promised or expected, or you could be beaten on price, quality or service.

Losing a key account can have a serious impact on your cash flow. Credit companies such as Experian offer a credit scoring service which can be invaluable when setting credit terms for key accounts. This is important: You wouldn’t lend a stranger £20,000, so why offer new customers this kind of credit facility without checking their financial strength? In order to manage this risk further, there is a wide range of bad debt protection policies available which pay out in the event of your customer going under.

Remedy

Take a long, hard look in the mirror and discover the underlying reasons for your clients’ lost faith. This way, you’ll have a much better chance of either winning the client back, or at least making sure you don’t lose others going forward.

If your customers’ satisfaction isn’t a priority for you already, it should be now! Paper trails for every transaction can be an extremely effective way to guard against disputes and to keep an eye on quality control. Obtain written purchase orders to back up your invoices and always get a signoff from the customer to say goods have been received or a service completed satisfactorily.

3. Orders are rising fast

This is not something that would be immediately cited as a sign of problems. However, when your business is growing quickly you need to be even more careful about your cash flow.

We’ve all heard the phrase “cash is king” and this is never more true than when you’re struggling to keep up with increasing demand for your products or services.

While most resources will be occupied meeting that demand, it is worth remembering the income from these orders may take three to six months to come in. That means you’ve got to be able to cover your costs for at least that period to keep the business afloat.

Remedy

Two of the most effective ways to manage your long term cash flow are to use factoring or invoice discounting services and to lease your manufacturing or office equipment.

Factoring and invoice discounting raises up to 90% of your invoice value ‘up front’, enabling you to invest back in the business. You get the remaining monies when your customer pays the debt, less a fee.

4. Waiting longer for payments

If your customers are taking longer to pay your invoices but you’re still working to fulfil a growing order book, you’re going to start having problems. And it may happen sooner than you think.

A customer who puts in repeat orders is important for your business success. However, if they take too long to pay, you have to ask if it is worth accepting their next order until some agreement has been made about payment.

Remedy

Too few small businesses employ a designated credit controller to collect invoice payments and chase up late payers. If you’re starting to notice customers taking too long to pay, it’s worth sitting down with them and discussing the reasons.

Business is built around mutually beneficial relationships and the better you, your suppliers and your customers understand each other, the more flexible the relationship will be.

Be understanding when you’re asking for payments but remember that you have rights, including being able to charge interest on overdue invoices. Make sure that all credit terms are stated on each invoice, along with the due date for payment. If you don’t, your customer can quite rightly say they didn’t know when they had to pay.

Remedy

Factoring companies can also collect your outstanding debts. They’ll effectively buy your outstanding invoices, release up to 80% of the value and take their fee from the remainder when payment is collected. If you do not need an external credit control facility but would still like the funding it can generate, an alternative product is available called invoice discounting.

5. Unrealistic assets on your balance sheet

Many businesses have valuable assets on their balance sheet, including machinery or equipment owned outright. All assets depreciate over time – how long has it been since your business assets were valued?

Out of date and inaccurate valuations make a business look healthier than it actually is and may cause problems when you’re looking for growth investment or calculating your profit and loss statement.

It’s also worthwhile considering that older assets lose their market value very quickly and can start costing more in operating and maintenance costs.

Remedy

Leasing and asset finance services can help simplify cash flow by enabling you to use the equipment you need without actually owning it outright. This financing mechanism is available for both existing and new machinery.

6. Increasing stock levels

Unused and unsold stock isn’t just cash tied up in the business, it’s also a depreciating asset with a diminishing return on the money you invested to produce it. In other words, it’s a waste of money.

Although this is more relevant to manufacturing businesses, the underlying factors behind this problem should be a concern for all businesses – if you’re producing something that isn’t selling, how long do you expect to last?

Remedy

Keeping a close eye on patterns of supply and demand and having the flexibility to adjust to these changes is the difference between a growing business and a dying business. By automating your ordering process, wastage is minimised and the business has moves closer to a just in time delivery structure.

7. Cutting prices

While a popular tactic for promoting new products or gaining short-term market share, reducing your prices without cutting your production costs can seriously damage your business prospects.

Remedy

Instead of cutting prices if sales start to fall, try to find the reason sales have slowed. It’s possible that your market sector has reached saturation point or it could be a problem with the quality or perceived value of the product.

There are a number of ways to differentiate products from the competition. There might be an alternative to cutting prices that will strengthen your business and its prospects, rather than eating into your profit margins.

It’s often worth spending a bit of money to market your product more effectively, or by hiring a designated sales person to reverse the downturn in sales.

8. Rising debts and slowing growth

Getting into more debt is not the best way to finance business growth. The quicker you can get your business trading on profits rather than debts, the better.

That said, some forms of borrowing are more sustainable than others and can reduce the time it takes your business to begin trading on your profits.

The debt to asset ratio of the business becomes serious when your assets (including book debt) are outweighed by liabilities (including creditor’s ledger and longer term liabilities such as director’s loans).

Remedy

VAT and PAYE payments are often tricky to keep on top of if you are experiencing a change in your sales volumes. While many companies pay their VAT quarterly, if it might be easier to pay monthly. Many VAT offices will be happy to change to this structure.

The Crown has lost its preferential creditor status and so is under increasing pressure to secure payments from companies which look a little shaky. If you do anticipate problems paying the Crown, you should immediately meet your tax officer to discuss a payment plan.

Agree in writing to clear your arrears and guarantee future payments. As long as you stick to the terms, this should stave off further action from the Crown on outstanding monies.

Most businesses have a number of assets that can be used to secure much-needed capital – including your outstanding invoices, machinery, equipment or company vehicles. Two of the most effective ways to manage your long-term cash flow are to use factoring or invoice discounting services and to lease your manufacturing or office equipment.

Factoring is essentially selling your outstanding invoices to a company that will release a percentage of those funds immediately for you to invest back in the business, for a fee.

Also, don’t be afraid to have another look at your business plan. The most successful businesses have management teams that can spot opportunities and have the flexibility to adapt to these opportunities.
Don’t rely on your yearly accounts for the day to day financial management of your firm. Even simplistic management accounts, if kept up to date, can be invaluable.

9. You don’t admit the truth

Are you still trying to convince yourself that everything will be alright? Do you find yourself hiding from bills and avoiding contact with your accountant, investors and staff?

Covering up the truth about your financial situation will not only stop you getting out of the mess you’re in, it may get you into deeper trouble. Investors aren’t going to penalise you for getting into problems – every business faces financial difficulties– but if they don’t know what’s going on, they can’t help.

Remedy

Investors will be far more likely to help if you are open and honest with them, so that potential problems can be caught earlier rather than later.

Your investors will have put a significant amount of money into the business and would undoubtedly prefer to invest more money than to lose it all because they were never told of the difficulties.

10. It’s not fun anymore!

Think back to the reason you first got into business. It’s generally because of the excitement and the challenge, rather than the opportunity to make a quick buck.

If you wake up in the morning and can’t stand the thought of going to work or is it that the company has evolved beyond your interest or control, then perhaps it’s time to consider getting out.

Many entrepreneurs enjoy the challenge of getting a company off the ground but once the business has become reasonably self-sufficient, they lose interest and need to move on to the next challenge.

Remedy

Perhaps it’s time to start thinking about how you can start delegating more authority to employees that you trust as part of your exit strategy.

By giving some of your key employees the authority to make decisions, you can free up more of your time to concentrate on the parts of the business that still excite you, and potentially even get the passion back that made you start the business in the first place.

The main thing to remember in all of these cases is that they do not necessarily mean that your business is on its last legs. If you catch any of these signs early enough, they can all be turned around so the business ends up stronger in the long run.

For more informative articles on Organisational Development, please go here

Today’s News: The excitement is building and places are being filled rapidly. The 2008 Sales SheBang is gathering momentum - you should really consider booking early - this promises to be THE sales event of the year. Just click on the banner below for full details.

Complimentary Sales SheBang Preview Calls - here are the details:

You don’t want to miss these COMPLIMENTARY Preview Calls where Jill Konrath will be interviewing the Sales SheBang presenters. You’ll have a chance to learn from these savvy sales experts - even before the conference.

These calls are open to EVERYONE! Even if you can’t make the call, sign up. As soon as it’s posted online, we’ll send you a link to listen at your convenience.

Wednesday, August 20th at 1 pm ET

- Leslie Buterin, author of Secrets to Scheduling the Executive-Level Sales Call, will discuss the challenges selling to senior management and tips you can leverage to get in the door.

- Brooke Green, the Ultimate Sales Chick podcaster, is passionate about claiming your worth. She’ll give you ideas you can use to strengthen your personal and professional value.

- Anne Miller, author of Metaphorically Selling, is the force behind “making what you say, pay.” She’ll share tips you can use to sell, explain and persuade anything to anyone.

COMPLIMENTARY Preview Calls! Register now:

Wednesday, August 27th at 1 pm ET

- Kendra Lee, author of Selling Against the Goal, will talk about traps that sellers encounter that derail their consultative sales efforts - and how you can get out of them.

- Ardath Albee, power blogger at Marketing Interactions, will share what it takes to catch and keep your prospects’ attention - especially when they’re busy decision makers.

- Michelle Nichols, former savvy selling columnist former Savvy Selling columnist for BusinessWeek and founder of Hug Your Kids Day will talk about the fallacy of work-life balance.

COMPLIMENTARY Preview Calls! Register now:

Wednesday, September 3, 1-2 pm ET

- Kim Duke, founder of SalesDivas.com, will talk about why you need to stop being just like everyone else as well as strategies you can use to stand out from the crowd.

- Lori Richardson, AllBusiness.com sales blogger is a master at setting up alliances and partnerships. She’ll share useful strategies you can apply right away.

- Debbie Mrazek, author of The Field Guide to Sales, will give you insights into what prevents sellers from achieving their goals as well as tips you can use today to have your best year yet.

COMPLIMENTARY Preview Calls! Register now:

Finally, I recently accepted a request to publish my work on a brand new site called Insightory - I have been really impressed with their professionalism and I think you will be too - just click on the banner to find out all about them.

Tomorrow: One of the most recent recruits to the Top Sales Experts team Shane Gibson, makes his debut on The JF Guest Author Spot, with an excellent article about team selling - it’s true, the “Lone Ranger” style of selling, really is consigned to the annals of history!

In response to a question I received in my mailbox this weekend, I identified that in my view, there are five main drivers for improvement in organisations:

In no particular order
• Strategy
• Lean operations
• Balanced culture
• Customer responsiveness
• Leadership

Strategy sets direction and gives focus to improvement. It must however be deployed throughout the organisation to be effective.

Processes need to be mapped and analysed in a methodical way; projects must be managed; problem symptoms traced to root causes; data must be collected before decisions are taken; trends in customer preferences detached and fed back; improvement activity of any kind reported on and coordinated; improvement action measured. Just about everything should be done to a discipline.

A balanced culture means effective, creative management of people. Customers are served by people; processes are managed by people. Only people can deliver quality improvement. For them to work well they must be empowered, given direction, measured, reviewed and success recognised.

Customer responsiveness keeps the organisation focused on customer needs, reactions and changing requirements.

Finally, leadership ensures that everyone is enthused and supported to work on the strategy, improve processes, serve customers and become active team players.

You may also enjoy “Is Your Organisation Committed To Success?”

Today’s News:

Over at Top 10 Sales Articles, we have just announced the Top Sales Article for June - no, I am not going spoil it for you, please check it out here

I am making a concerted effort to read more blogs, particularly those written by fellow Top Sales Experts and I promise to share with you any posts that I think you will enjoy. Dave Brock recounted an interesting experience on his blog last week - “What Did You Sell That For”  and Dave Stein had something to say about “Competing On Price”

 Tomorrow: My guest is “Mr Inside Sales” - Mike Brooks, who has a brand new book coming out shortly.