Entries Tagged 'Summary' ↓

We all know the ABC’s of sales right (Always Be Closing)? I think that sales philosophy is BS (Bull $#!%). A car dealer closes a sale when you take a car off his lot - a professional salesperson simply lets their sales cycle lead to a natural end, whether it’s a sale or not. I’m very passionate about this subject.

As we’ve talked before, your prospects should be well aware of the sales process steps that you’re going to walk them through right from the onset of the courtship. So if you reach the end of these steps, an order will be the natural outcome, you don’t have to pressure them into “What will it take for me to get you in this car today?”

Before you say anything, of course I realize that this is an oversimplification and you often have to nudge clients into moving, but the theory is sound.

Another thing I hate about ABC is the word close itself. When you get your order, it should be an opening to more business with them, not a closing of some type.

A key to treating customers in this manner is that your sales funnel is full enough so that you’re not panicking at the end of your quarter and instinctively try to push your prospect faster than you should.

So do yourself a favor and take the notion of closing out of your mind. Walk your clients through your sales process and show them all the points along the path where they have an opportunity to detour. If they are still on the ride at the end, an order follows and you start the dance all over again.

One of my favorite sales podcasts is the SalesRoundup Podcast, the hosts, Mike and Joe, are funny and are actually selling - i.e. not trainers, and it shows in what they say.

That being said, I have had a slight bone to pick with them for quite some time. I LinkedUp with Joe over a year ago and we exchanged a few emails talking about sales cycles. I explained that a sales cycle in my industry (advanced materials) can be as long as five years. Well the next Podcast I hear them taking a few shots at an unnamed person (me!!) and making fun of me a bit. I was jogging when I was listening to it and it really fired me up for about a day - I even shot them an email about it. So this post is to clear the air and explain my very complex sales cycle.

Among other things, I help develop and sell advanced metals to the aerospace industry. From the time of a first call with, say an engine OEM, to a production sale it can indeed take over five years. Would you feel comfortable flying across the country on an unproven material? There is so much testing and evaluation that you can switch jobs before you make the big sale.

So what is my solution? I obviously can’t wait for five years to make a sale. The solution is twofold. First, you better have more than one material at various levels in your sales funnel, or you better make the majority of your pay via a salary for the first few years as opposed to commission.

The second solution, and what I choose to do is to find more forgiving and risk taking markets to sell to before your main aerospace customer blesses it. Let me show a quick example to keep this post from getting too long.

Let’s say that your company has a new material called Xmetal. It is strong, lightweight and will never corrode. GE and Rolls-Royce are both very interested and in the initial stages of testing. Revenue from them buying your test material is maybe $150,000 per year, and your company is probably losing money at it.

Who else can use this awesome material? How about the motor sports industry? They will die for a lighter metal that can shave a few pounds out of their chassis - there’s another $200,000 per year. The medical industry has a need for a super-corrosive resistant metal for certain surgical tools. That equates to $500,000 per year at a healthy margin.

You see where this is going? You might have to support your big breakthrough with supplemental sales in the early years so that you don’t starve while waiting for the big payday.

Oh, so it’s five years later and your material is finally approved and you got your first repeatable production order - for $7MM.

I trust that my honor has been restored, in my own mind at least.

To show that there are no hard feelings and that I still love these guys, I asked Joe to comment on this strategy and here’s what he had to say.

Heck you should be put on a pedestal for taking on a product line with an average sales cycle of five years. - And I thought nine to twelve months was long. First let me comment on your strategy. Whenever you have a cycle that transcends fiscal years (and could up to five) you really should develop a laddered approach to the business timing. In your example, you close the $7M deal in year five. Hopefully you started a second and perhaps third cycle four and three years ago respectably. This way you will have built a nice pipeline of “large” deals and a predictable success rate.

I particularly like the creativity of approaching adjacent markets to supplement your revenue in the short-term. As you so nicely pointed out you do need to generate a steady stream of revenue! Although not your prime source, adjacent markets could be what your company needs to sustain operations during the “startup” period.

One final point I would like to underscore. In your post you alluded to the fact that many sales professionals will not make it the five years needed to realize success. Having said that, I would pursuit large deals with a team of sales people to mitigate the risk of turnover systemically affecting the outcome.

As far as the honor goes, anyone who successfully takes on a product line with a multiple year sales cycle is tops in my book. Five years! Man I still think you are crazy! LOL

Make sure to check these guys out - it’s about 40 minutes a week of free sales training.

As we talked about in the previous time management post, managing your sales time is of paramount importance to keeping your sales funnel loaded. Let me explain this post with a personal example. I had a inside salesman working for me, let’s call him Steve. Steve was always at his desk working - filing, reading, stapling, Web surfing - you name it, he was doing it.

He made me look like I was lazy.

To make a too long story shorter, this went on and on and very little actual sales fell through his sales funnel, but he was always “close to closing”. It got to the point where I literally sat right beside him for an entire day to observe his sales tactics. And all he did was busy work.

For example, if he was supposed to call on someone, he would spend all his time printing out Web stories about them and highlighting meaningless passages - in face he showed me a collection of binders filled with this “intelligence”. I forced him to stop and we made a quick cold call to the company, got an appointment and he was on his way.

Unfortunately, things didn’t work out with Steve and I had to let him go, but there is a year’s worth of posts that will come out of my working with him - as well as some good lessons for me on when to let people go.

Bottom line: Don’t get sucked into thinking that just because you are doing something, that it’s counts as selling - a single call is worth more than a dozen reams of printed paper of contact information.

We all know that there isn’t enough time in the day to do everything, so take a lesson from all the time management gurus that are springing up and allocate your time wisely.

I suggest laying out your plan of attack for the week on Sunday evening - this is in the form of major goals, such as “Finish XYZ’s sales proposal” and “Make 15 cold calls”.

Then at the beginning of each day (before anyone else is at work), lay out your daily plan. I do this at 6:00 in the morning. These tasks should be as detailed as you need them to be. Some folks respond best to tasks laid out on a time line, so that you know from 9-10, you’ll be cold-calling; while others respond better to a short listing of tasks.

My personal style is to make a list of general tasks for the day and knock them out - except cold calling. It’s not my favorite activity so I have a specific day and time that I shut down and do nothing but prospect. And make sure to leave lots of slop in your schedule for all the things that crop up and demand your attention.

One more tip - write your sales proposals and quotations at night when your customers aren’t at work; use the daylight hours to sell. Writing a proposal is not selling.

Experiment and find out what works best for you.

Mike Smith had a great post last week called “5 Reasons Why Arguing with Unruly Clients Will Get You Nowhere“. While most of the work is directed at Internet workers, I’d say that he’s just about right on the spot even in complex engineering sales.

The main point is that it wastes time and typically doesn’t gain you any money. You have to be selective in who your customers are. Any time you spend with a certain customer is time away from another potential customer.

So ask yourself if you’re better off bickering with a jerk in a losing situation or spending that hour calling up a customer that you’ve lost touch with over the years - should be a pretty easy call.

Try this, “Well Mr. Prospect, it seems pretty clear to me that your business would be better off not dealing with us, perhaps we’ll have a chance to work together in the future.”

I have a strange habit of saving one of my own business cards every time I have a new one (I’m up over a dozen). Thinking about this got me reflecting on the importance of your own title.

My feeling and experience suggests that you don’t want to be called a salesman - that’s a title reserved for sly characters that sell used cars. If you’re an engineer, flaunt it.

One of my favorite titles that I ever had was “Director of Engineering Services”. I was in charge of the sales and marketing department and was initially given the title of “VP, Sales” - yuck!

When I would call on fellow engineers (that’s who I was selling to), I got much more traction with the seemingly technical title than with the flashier sales title.

Most of the times, even when I own the company I’m selling - I don’t use CEO or President, I’ve had much more luck with mid-level technical titles. Your level should be high enough to convey that you can close a deal without running to your boss, yet low enough to suggest that you are on the same plane as your customer - this is why I like Director.

So, talk to your boss and ask to have business cards made up with a title of your choice - offer to pay for it if you have to. And don’t let ego be your enemy, flashy titles are just that, flashy title.

I remember one time, I had a title President and CEO and I was calling on people literally working in the field, they’d shake with a dirty hand, look at my card and say “wow, aren’t you important” with a disgusted smirk on their face - learned a quick lesson there.

Bottom line, put the effort into getting yourself a title that helps you sell to your target customers.

It is absolutely critical that you know all the touch points that your company and product has on your prospects and customers. The vast majority of salespeople out there worry only about their direct touch points, such as calls, visits, emails and the such - but you don’t want to act like that masses, you want to stand out.

We need to think about our sales position as if it were our own business and act accordingly. I’m talking about treating anyone and everyone in your organization as if they are part of your sales team. Don’t like the way the receptionist answers the phone; then write them a new script.

Sit down and go through your company’s entire system to see where your customer gets touched from initial inquiry through sales fulfillment. The list is long and is different for most companies, but here are some examples:

• receptionist
• accounts payable
• accounts receivable
• customer service
• MSDS documentation
• Web site
• building (if it’s a local business)
• shipping documents

Let me just take the last bullet as a quick example. Let’s say that you sell widgets and each one that gets shipped contains a packing list. What does it look like? Most of them look like something thrown together by an intern the day before they left to go back to school. Why not put in the two hours some evening and design a nice clean one to give to your shipping department? Many of your customers will be given a copy of all shipping documents when they receive their package from their shipping department - and for many of us, our customer is also the shipping department.

A messy packing list reflects that you might not really care about anything after closing the sale.

My point is twofold:

1. understand that the sales process involves your entire organization and lasts the entire life of your customer, and
2. take the time to choreograph your sales process and your sales funnel will thank you for it.

This post marks the end of the introductory phase of this blog and begins to dig into the meat of what we’ll be talking about here for all time to come. And that’s the sales funnel. We employ a sales philosophy that has as its backbone the sales funnel - oddly enough, we call it “Sales Funnel Selling^™.”

A great way to learn what Sales Funnel Selling is all about is to read our free white paper “What is a sales funnel?” It represents the first in a long series of papers that will dig deep into our philosophy and provide tools and tactics that can be put to immediate practical use.

Just like a typical funnel moves liquid from the big end to the small end, a sales funnel moves opportunities in a predefined path from initial contact through receiving a purchase order. Think back to when a big order came through your company’s door. Did it magically appear on your fax machine or in your in-box? Doubtful.

Think farther back. Back to a time before you even knew this client. From the day of first contact to getting that sweet piece of paper from your fax machine, that client went through several steps, transforming themselves from an unknown outsider to one of your most cherished customers. Those steps are what the sales funnel is all about and why it is the key to any sales process or philosophy.

A sales funnel illustrates how your sales pipeline is flowing now and what it might look like in the future.

A typical sales funnel is shown here. The key to surviving in sales is to make sure that each respective layer never goes empty - it really is that simple. You should always know how many companies are in each of your respective layers – in general there should be more and more companies as you move up in layers. New opportunities are put in the top of the funnel and walked through the maze of layers until they either become disqualified prospects (hopefully we find that out early) or they give us a purchase order and fall to the bottom layer.

Now it could take weeks or months to bring this prospect through the entire funnel, so you better have some deals close to the bottom of the funnel or you’ll be going hungry until you push something down. And don’t think for a minute that a purchasing agent doesn’t know when your funnel is a bit dry. They can smell that a mile away and make you pay dearly to expedite the sales process.

So the bottom line is pretty straightforward.

Make sure that you have action at all levels in the sales funnel and you’ll never be desperate for a close again.

When you aren’t desperate for opportunities in the bottom end of the funnel, you can stay detached from the prospects in the top of the funnel. Detachment means that you aren’t pressuring you or your prospect to move too fast through the sales process because you don’t need the sale. Once you begin to feel that pressure, you can lose sight of the real goal – to help your client. And when that insight is lost and you don’t have your client’s best interests at heart, you can damage your relationship and reputation beyond repair. Nothing is more important to your clients than your integrity.

A well populated sales funnel gives you the time to help ensure that your proposed solution becomes the chosen solution.

Although we can’t go into too much gross detail here because of space requirements, each layer of the sales funnel is briefly defined below. Remember to download the What is a sales funnel? white paper for a much more detailed explanation regarding the sales funnel process.

New Opportunity – This layer contains new leads that you’ve either uncovered or that were passed onto you from the marketing department. See the “Where do sales leads come from?” article for information on how to make sure this layer is chocked full of thirsty prospects.

Initial Communication – Will it be the dreaded cold call, or do you have an in because you both graduated from the same school. The article “Getting the initial sales appointment” details the process for getting yourself noticed and gaining the all important foot in the door.

Fact Finding – This layer is where you ask question after question after question to make sure that you exactly understand what the real problem is. “We need a lightweight material for this shaft” is not a problem statement; “We need to reduce our fuel consumption by 15% because of new FAA regulations” is a problem statement. Do you have anything in mind that can help them save fuel; perhaps a lighter material for that heavy steel shaft?

Develop Solution – After all the facts have been gathered, collated and restated, work with your technical team and do what you do best and come up with a proposed solution. Depending on the complexity of your product, try to have your client in on some of your brainstorming meetings to get their buy in – even if it’s over the phone. Do you think you would have an edge in winning the work if the solution was partly your client’s idea? I’d bet on it.

Propose Solution – This is the layer where the gross glossy proposals and PowerPoint sludge-pits are created. You won’t be doing that however. Since your prospect was intimately involved in developing the solution, they already know basically everything that’s in the proposal including the price. You’ve created a “zero-surprise proposal^™”, and your prospect loves you for it. As an added bonus it’s only four pages long compared to your competitor’s 28-page behemoth that no one is going to read anyway.

Solution Evaluation – This is the time that your prospect earns his keep. Since he already bought off on the proposal, you need to work with him to push your solution through his buying process and not worry about selling him anymore. Of course you already know what that buying process is from the Fact Finding step right?

Negotiation – Ah, yes; if you buy today I’ll knock off $300 and throw in a free oil change! We certainly don’t want to come off like Crazy Jerry from Crazy Jerry’s Used Cars. Of course since we’ve had the client involved in the process the entire way and created this wonderful zero-surprise proposal^™, we should actually be able to skip this step on many occasions. As deals get bigger and more complex, however, the legal, purchasing, and accounting departments usually want to take a few swings at you. Don’t fret; you’ll be ready and waiting.

Purchase Order – Here it is, the big rush of getting exactly what you were expecting at the exact time you were expecting it. But even knowing that, it’s still a climatic experience that will drive you to jump back in the funnel and keep shuffling deals downward.

Account Maintenance – Don’t think that this is an afterthought; it is one of the most important layers in the funnel. I’m sure that you’ve heard how much easier it is to sell to an existing customer than to acquire a new one, well it’s true. You’ll be able to skip the first few layers and jump right into developing solutions with your client right at your side.

Well, that title is offensive enough. As engineers and inventors, we’re in an envious position to sell our products and services with the technical know-how that only a select few have. A run of the mill salesman would kill to have our in depth product knowledge and problem solving skills. Heck, many of us helped invent whatever it is that our company is now selling.

So why is it that most companies hire professional salesmen (or sales engineers) over promoting us to that typically more lucrative position?

• Are they afraid that our pocket protectors will wear holes in their company provided shirts?
• Are we so backward that we’ll grossly offend their clients and send them dashing for the competition?
• Do they think that we’re just not interested?

Typically companies have silos that people fit in, or should I say that they fit people in. “You, you’re an engineer, and you over there, you’re a salesman”. The problem is that in today’s world, engineers are relied on more and more to take an active role in the sales process - in fact we need to lead it many times.

I’m sure a lot of you out there view your corresponding sales team simply as order takers for all the hard work you do. And in fact, in many instances you’re exactly right - so why not step up and claim the sale yourself?

This gets to the core of this blog - how can we as engineers excel in the sales world?

The good news is that we’ll be putting together a structured method to follow to help ensure sales success. I’ve found that this method is attractive to most engineers because it fits our ‘divide and conquer’ attitude and leaves the ’soft skills’ talk in the garbage where it belongs.

So back to the original question of why can’t engineers sell - well we can, and we’re going to learn here how to do it and how to do it so well that we’ll be faced with a choice of whether we want to be in the engineering or sales group.

Ask yourself this question - do you think it would be easier to learn how to sell or to learn how a material’s microstructure controls the mechanical properties - the answer is obvious and this is why engineers have a leg up on standard salesmen, we already understand the technical mumbo jumbo, we just need to package it better.

In fact we already conquered one of the 10 sales commandments, “Know thy product”. As you know, most salespeople never even come close to following this rule - they simply call you in to field all the technical sales questions; and then they take the order - and the commission.

Perhaps the title of this post should have been “Why don’t engineers sell?”

The answer to that question is much more involved and we’re going to tackle it frequently here in this blog. We’re going to lay out a structured sales approach based on the theory of following a structured method called Sales Funnel Selling^™.  We’ll dissect the sales process into easily digestible steps and become an expert at each step. When all those steps are put together, we’ll have a seamless and successful sales process that relies on honesty and integrity rather than cheesy sales tactics.

In the next post, we’ll define our sales funnel and begin to see how it applies to helping engineers sell.

Well, we’re off and running - thanks for stopping by. I’m starting this blog to help engineers, inventors, and business owners navigate the intersection of engineering, technical sales and marketing. Although the tips and techniques will be applicable to most any product or service, my specialty is technical in nature, so it leads that the majority of posts will draw on that expertise. That being said, I’ve sold everything from retail with a sales cycle of minutes to advanced aerospace materials with a 5+ year sales cycle.

All too often we technical folks are thrust into sales positions without training and it’s an uncomfortable position to be in. It took me an MBA, several years, and countless books to become comfortable in this world, and it shouldn’t have. I hope to provide lessons learned from myself and others to all my fellow geeks and nerds so that we may all excel in this important aspect of any business.

In a nutshell, the focus will be on providing the readers with tools and practical theories to help them sell - both inside and outside their organization. An important word in the previous sentence is practical - if I ever go astray from this statement, feel free to blast me a harsh email telling me to get back on track and give you something that you can actually use.

A favorite technique of mine is applying retail and general consumer theories to the high tech world. So I’m sure that we’ll have many conversations about treating your customers like people and not big corporations.

I hope to create an interactive audience with comments and cross talk. And please let me know at any time if you have any suggestions on how I might improve this site and make it more usable for you.