Sales Blog with Sales Tips

All sales professionals want to position their employer as one of the biggest players in their particular market. We think that size equals greatness in the buyer’s mind.

However, always pitching “big” might just be a big mistake.

And if we work for a small company, our competitor’s “bigness” can be used against them.

Beer and Purses
There are examples all around us of companies whose marketing departments have wisely concluded that big isn’t always perceived as better by the customer.

Samuel Adams beer is currently running ads proclaiming they only have slightly less than 1% of the beer market. One percent of the fragmented beer market is actually a huge share, but they want to be seen as a niche player.

Kate Spade sells women’s clothing and accessories. They are a significant global force in the high-end market they focus on. Their marketing department has done an excellent job of making the company feel small to its customers. Andy Spade, President, said, “There’s nothing interesting about buying from a large corporation.”

Those Big Bullies
Why do these two companies, and many more, want to be viewed as small?

In the eyes of the buyer:

• Big companies are bureaucratic.
• Big companies are awkward and slow.
• Big companies aren’t dependent on individual customers.
• Big companies only like big customers.
• Big companies don’t give good customer service.
• Big companies (especially the Fortune 500) have tarnished their reputations with incompetent management, disregard for stockholders, environmental apathy, poor treatment of employees, etc.
• Big companies don’t fit the new information age; they’re dinosaurs.
• Big companies can be intimidating to buy from.

Small Can Feel Better To The Customer
Instead of launching into a 20-minute discourse about how gigantically wonderful our company is, we might want to reconsider our options.

Customers not only don’t care how great our company is, they probably find our company’s lofty view of itself as offensive.

Remember, if you work for a small player in your market segment, you can turn a large competitor’s vast size into their Achilles’ heel.

Start Thinking Small
Customers care about what we can do for them and not much else. Taking care of our customers requires a relationship with them. Relationships are about one person relating to another, not about a behemoth corporation’s need to flaunt its immensity.

©2010 Scott R. Sheaffer

Do you have a large customer base of mid-sized accounts or do you only have a few large customers you rely on? Your answer to that question will determine your success over the long haul.

Staying Power
I don’t think I’ve ever known of a top producer over an extended period who built a successful account base with a few large customers. What I’ve observed is quite the opposite. Sales professionals who are rainmakers do so year after year with a large number of medium-sized customers.

Experienced sales professionals know better than to put all of their eggs into two or three customer baskets.

The Problem With Selling To Really-Big-Companies

1. They beat you up on price. Everyone is after Really-Big-Companies so the downward price pressure is enormous.
2. You’ll waste lots of time on their government-like bureaucracy. And “may the force be with you” if one of your Really-Big-Customers is a government entity.  Double jeopardy.
3. Don’t be in a hurry to get your invoices paid; they aren’t.
4. They have people on the payroll to keep metrics on your performance. If you fall below their thresholds, you’re out. You’re a number. You have to watch your step on every order.
5. Since they eat up so much of your time, you can only maintain a limited number of these Really-Big-Companies as customers. Do the math. If you have three of these and lose one, you’ve just lost 33% of your sales. In short, you’re very vulnerable. A large account base of mid-sized customers allows you to spread the risk. Remember, 100% of sales professionals lose 99% of their customers over time because of normal attrition. I’ve seen too many examples of sales professionals who thought they were exempt from this universal sales law.
6. You’ll most likely be dealing with the purchasing department. Selling to purchasing departments is rarely a good thing from a sales perspective.
7. Whether you call it supplier reduction or vendor consolidation, Really-Big-Companies are constantly trying to reduce their number of vendors. See number four above.
8. You’ll rarely be selling to high-level decision makers, even if you are able to break free of the purchasing department. You’ll be selling chiefly to mid-level managers who are usually just information gatherers and recommenders.

Sales Tips Wrap-Up
I’m not saying that you shouldn’t take big orders from Really-Big-Companies. To do otherwise is not too smart. What I am saying is that long-term, high producing sales professionals usually achieve their results with a large number of medium-sized customers. This kind of account makeup normally results in better margins, fewer competitors, time savings, reduced credit problems, less account vulnerability and better access to decision makers.

©2010 Scott R. Sheaffer

Summary: Selling name brands for big corporations might look easy on the surface; it’s not.

It was my first day of my new job. I had worked for years for small companies and was incredibly excited to finally be selling for a really-big-company. This was a Fortune 10 company that everyone knew; I could finally let the products and services sell themselves and relax a little. I had paid my dues and I was now on selling-easy-street. I could not have been more wrong. Before you answer the siren song of a really-big-company sales position please consider the following.

Quota/Budget. Those really-big-company executives may have gotten their executive position for all the wrong reasons but they definitely are smart enough to know that brand name recognition normally translates into an easier sale for you. They compensate for that fact by giving you a large sales budget like you’ve never seen before.

Competition. As Reggie Jackson used to say, “Fans don’t boo nobodies.” The more visible your company is, the more likely your prospects and customers are going to be a target of fierce competitive activity.

Bureaucracy. You only thought you had to do a lot of paperwork when you worked at those smaller companies. Really-big-companies will bury you in meaningless and redundant paperwork, CRM systems, ERP systems, SFA systems, expense voucher systems, ad infinitum systems.

Account Base/Territory. You can’t believe how much really-big-companies segment sales territories. Since market share is high, they figure that you don’t need very much geography or accounts/prospects to meet your quota. The fewer companies you have to contact the more important it is that you don’t damage any sales opportunities, especially considering the big sales budget that is assigned to you. Every sales presentation can become a do-or-die effort.

No doubt there are some advantages in selling for a really-big-company. But don’t take a sales job for one of these companies thinking that it is going to be easy. Life and work have a way of always balancing advantages and disadvantages. Nothing that pays you a significant income is going to be easy.