Sales Blog with Sales Tips

If you’re phobic about math, stay with me for one moment while I define a simple statistical term for today’s sales tips post.

Correlation. It’s the statistical relationship between two or more random variables. In short, if one thing changes, how much and in what direction does it affect something else?

See, that wasn’t too bad.

Example
As the collective IQ of the US Congress decreases (a purely anecdotal observation on my part), the American public’s dissatisfaction with their performance increases. Summary: smart is going down while unhappiness is on the rise.

There are many interesting correlations in sales (“interesting correlations in sales” is an oxymoron that you will probably never see or hear again the rest of your life). I’m going to talk about just one in today’s sales tips blog.

Sales Application
The example given above is called a negative correlation. As one number moves in one direction, the other moves in the opposite direction.

Did you know there’s a negative correlation between sales cycle duration and pricing? As sales cycles get longer, our pricing typically declines.

Our customers are very aware of this phenomenon and they can use it as a silent negotiating technique.

Why We Decrease Pricing As Time Increases

• We think any delay is caused by competitive inroads. The customer must really be checking out the competition and is finding pricing significantly below ours.
• Stalling is a form of a customer objection, and we instinctively lower our pricing in response to all objections.
• We’re afraid the customer has lost interest. Maybe a price concession will get them back in the game.
• We don’t know the customer’s budget, but we’re afraid our quote may have exceeded it. Just to play it safe, we’ll reduce our pricing.
• We’re impatient.
• Our sales manager wants us to close business as quickly as possible.

Sales Blog Wrap-Up
Getting out of this habit requires that we understand this is nothing more than a head game. One we play alone.

Its fundamental cause is a fear of losing the deal.

When we discount pricing because the buyer is delaying, we make pricing decisions from a soft position of assumption and conjecture.

There are a million reasons that cause sales cycles to lengthen. Most of the time we don’t know why. More often than not, it has nothing to do with pricing. Instead of discounting, we need to be asking questions.

There is little or no correlation. Resist the temptation.

©2010 Scott R. Sheaffer

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Today’s guest post is by Russ Emrick. Russ is a sales professional with 25 years of experience. He focuses on sales coaching and specializes in lead generation. Learn more about Russ and his company at www.breakoutselling.com.

Recently I had a new water well dug at my residence. I realize now that the effort it took to find a good water supply is analogous to locating new opportunities.

Both start with a plan and changes are made as necessary.

Plans Don’t Always Work
Engineers studied my property. Their research identified the location and depth where water could be found. After drilling at the specified location and to the depth they calculated, no water spouted up. It was a dry hole.

Time for “Plan B.”

Selling often has the same outcome. After in-depth research and needs analysis, we may not uncover any customer opportunities. However, good preparation means having multiple options so that we have the flexibility to change course.

Muddy Water That Nobody Can Drink
On the second attempt, the drillers did find water, but it was undrinkable. The water was mixed with contaminants.

When we drill for information from customers, we frequently accept muddy answers instead of drilling deep enough to get good information.

I call vague customer answers, “stems.” In other words, they are just the beginning of an answer, but certainly aren’t enough to move the sales process forward. There are no flowers to be found here.

• “We have to drive costs out of the supply chain.”
• “We need to decrease our time-to-market.”
• “Our operational efficiencies need to be improved.”
• “We want more of a return from our technology infrastructure.”

Notice that none of these statements are quantifiable. I think George Orwell called this Doublespeak. They really say nothing. There’s a big difference between general customer issues and specific customer points of pain.

We have to dig deeper when we only get a trickle of muddy water from our customers.

• Reframe their answers by asking how a certain issue affects their business.
• Ask them to tell us what they think the solution to their problem looks like.
• Whenever possible, quantify their answers – in dollars and numbers.

Finding Clear Water Is Not Enough
On the third attempt, the well produced sparkling clear water, but not enough to supply the needs of my family.

Many times we immediately engage prospects and customers despite the fact that their well is shallow.

By digging down another 250 feet, a gusher of drinkable water finally erupted from my well. If we continue to ask informed questions of our customers – and wait for the answers, we can frequently find areas of opportunity.

Know What You Want To Achieve
It took four attempts to get a well that produced a large volume of clear water. Mission accomplished. Knowing what I wanted from that well guided me through the process. The outcome was established before we started.

We have to begin the sales process by knowing what we want to achieve. We also need to be prepared to walk away from some opportunities.

Flexible plans, quantifiable outcomes and persistence create winnable opportunities.

©2010 Scott R. Sheaffer

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Executives. When it comes to engaging them, we can’t afford to ignore the thinking style that is characteristic of their position.

Their job requires a temperament that is different from other decision makers. We have to understand how they process information if we want to connect with them.

Selling value, addressing needs, demonstrating ROI (Return on Investment), etc. are important. But we’ll be ineffective if we disregard the unique aspects of how they think.

ADD (Attention Deficit Disorder) And Executives
They all have it. It’s a requirement for the job.

Why?

People with ADD are not stupid, actually quite the opposite. They simply think in a random fashion versus the more conventional serial thinker (i.e. stream of consciousness). While the non-ADD person is putting one brick on top of another, the ADD executive is juggling.

He or she has to. Too much is going on in their world to be strapped down by a serial thinking style.

Attention Spans
They don’t have one. They can make us think they have one. But they don’t. There’s a reason executive summaries are called “executive summaries.”

When it comes to the executive suite, “Anything that has a staple through it will not get read,” (Jensen 2003).

Executives simply don’t have time to assemble all the facts on every issue.

Constantly Changing Contexts
Executives are able to quickly and competently move from interpreting financial statements to handling personnel problems to dealing with legal issues to making presentations, etc.

Serial thinking and “paralysis of analysis” don’t allow for this.

Two Sales Tips For Understanding The Executive Brain
These are more than sales tips; these are axioms cast in stone.

1. Executives have a highly tuned “this-person-isn’t-shooting-straight-with-me” radar. They also have its close relative, the “this-individual-doesn’t-know-what-they’re-talking-about” scanner.

While we’re presenting, they’re analyzing our information from many different angles. They see things globally, not serially.

They are skilled at ferreting out the whole story.

2. They like working with people who can make ideas and concepts compact. They like all forms of communication to be short and to the point.

They’re only going to invest a limited amount of time in the content of our words. Make them count.

Conclusion
We have to adapt our selling style to every decision maker. It is especially important to do so when sitting in an executive’s office.

©2010 Scott R. Sheaffer

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