Before I get to the Three Laws of Power Selling, I thought I should restate for you the three most important things that every new startup and freshly minted entrepreneur has to worry about first. The three most important things you need to focus on above all others are: Sales, Sales and Sales.
It turns out that most entrepreneurs are blessed with cleverness, ambition, flexibility, initiative, the ability to work in teams, curiosity, creativity, fear of failure, willing to take responsibility, leadership, energy and willingness to work hard; they have lots of ideas, some good and some bad.
But if you can’t sell, you’re toast. I have often heard CEOs of large, successful corporations and Presidents of fast growing SMEEs (Small and Medium Sized Enterprises) say: ‘Ah, now that things are going so well (i.e., sales are rolling in rather nicely), I can stand back and work on the business instead of in the business.’ This is completely wrong; as soon as a CEO delegates wholly the responsibility to his or her Vice President of Sales, the business starts to go down hill.
When Lou Gerstner stepped in to the CEO role at IBM in the early 1990s (a time of great crisis for IBM), he took a very active role in sales. Within a few days of taking the reins, he wanted to see a list of IBM’s top 300 customers. Why? Because he wanted to visit each and every one of them.
Sure you want to spend some time working on the business but you have to working in the business too and you have to be involved in sales you have to be in the sales loop otherwise you have abrogated your basic responsibilities to your company’s stakeholders including your customers. I mean there are times when your customers don’t want to talk to another sales engineer; they need to talk directly to you, Ms. CEO or Mr. CEO. And this way you disintermediate all the layers of bureaucracy; you get the real story and you then are in a position to create new sales channels and new sales opportunities that only the CEO or President can champion at the end of the day.
I thought it was weird circa 1995 to 2001 that all of a sudden entrepreneurs and their financiers started thinking that they needed financing first and sales second (or third or sometimes not at all). I have always taught that if you have revenues, you will get financing and not the other way around. Have you ever heard of a business folding where their sales are booming? Don’t think so.
They might change CEOs for one reason or another but if you have great sales, your company is going to be around for a long time.
So, quick, what is the entrepreneur’s first and foremost challenge? Sales, Sales and Sales.
Getting sales is not easy. There is always competition and it’s hard to find customers.
Some of my students tell me that their ‘pixie dust’ in their business model is that there is’t any competition for their (great!) new idea. This is actually quite funny there are two reasons why there might not be any competition. One is that it is a bad idea. Two is that it is a good idea that no one else has thought about before (unlikely but possible). However, in the second case, if it is a good idea, you absolutely will have competition. Check out how long it took for competitors for Viagra to appear. (I am not saying Viagra is a good idea, never having tried it myself, but it sure is a money maker.)
If your idea is a good one, you will create your own competition. So it’s a tough old world out theren your competitors don’t want you to succeed but, guess what, your customers and your future customers do.
They want you to be successful because they need your product or service. They don’t want you to go out of business. They are your greatest allies.
So making a connection with them (this is called marketing) is really crucial and you have to be able to make these connections cheaply and effectively (this is called Guerrilla Marketing substituting advertising and promotion brains for money).
But Guerrilla Marketing is something I deal with elsewhere; here let’s assume that you have made the connection with a potential client. How do you make your selling proposition irresistible? Well, you do it by first applying Firestone’s Three Laws of Power Selling.
The Three Laws of Power Selling
Here below are Firestone’s Three Laws of Power Selling. First, I’ll iterate them and, second, I’ll give some examples that will seek to illustrate how the Three Laws of Power Selling actually work. Most people read these types of things and they nod wisely but really have no idea how to apply these how-to-guides to their situation. I have found that people learn best from RL (Real Life) examples.
Firestone’s Three Laws of Power Selling are
• Law No. 1: SITTING ON THE SAME SIDE OF THE TABLE
Thou shalt get on the same side of the table as thine customer or client.
• Law No. 2: SOLUTION SELLING
Thou art selling a solution to a client problem or opportunity.
• Law No. 3: NEGATIVE COST SELLING/NEGATIVE COST MAREKTING
shalt demonstrate that thy solution is a negative cost for thine customer that thy customer’s or client’s costs decreaseth or thy customer’s or client’s revenues increaseth or both.
Thou shalt find persons who be willing to pay thou to market thine wares or services
Law 1 Some Examples of SITTING ON THE SAME SIDE OF THE TABLE
When I was doing some consulting work with GradeAStudent.com (started by four, really smart, former students of mine), I told them that if they adopted Law No. 1, they could greatly increase the amount of hardware and software they sell.
Their main business is at-home computer service fixing your PC on-site: installing software, getting rid of viruses, making your network to run, etc., etc. But clients naturally trust them to help them buy hardware and software too.
I told them that instead of trying to sell their customers stuff; they should put their suppliers on the other side of the table. So basically a GradeAStudent.com techie would say to a customer: I can get you XYZ virus scan software from Acme Corp. for 200 bucks and it does everything, including block spy ware and ad ware and pop ups, as well. Or I can get you something cheaper from Pirate Software Co. for $99 it scans for viruses but doesn’t block pop ups, etc.
Now the GradeAStudent.com techie is taking on the role of trusted advisor, a consultant to his customer, if you will he is on the same side of the table as the client. The suppliers are on the other side. If the client doesn’t like any of the options, the techie can then say: Look, maybe I can get you a better price from Acme or Pirate or maybe I can find something that will suit you better from someone else.
In either event, the client isn’t saying ‘no’ to GradeAStudent.com and they aren’t ‘buying’ from GradeAStudent.com they are buying ‘through’ GradeAStudent.com and from GradeAStudent.com’s suppliers. The question of GradeAStudent.com�s margin and markup on the sale isn’t likely to come up at all�it will be the suppliers who will most likely take heat if the pricing is too high or the offer doesn’t have all the features (or has too many of them) that the client wants. GradeAStudent.com can back away from any solution with no loss of face. This kind of ‘non-selling’, selling is extremely powerful.
Another client of mine, a web developer at EnvisionOnline.ca, was asking how he might apply Law 1 to his business. I thought about it a bit and came up with this example for him. He has already designed a web site for a Home Heating and Air Conditioning Company (HHAC, not their real name). I told EnvisionOnline.ca: Why not turn HHAC into a quote machine instead of a seller of AC units or furnaces? The idea would be for HHAC to consult with their clients, get on the ‘same side of the table’ and spec two or three different solutions for them. Again, HHAC clients would (hopefully) tend to see HHAC’s suppliers as the entities they are negotiating with, not HHAC.
Maybe EnvisionOnline.ca could create an opportunity for itself to get some recurring revenues by optimizing HHAC’s web site for maximum search engine traffic and perfecting an online quote system for HHAC. EnvisionOnline.ca could operate the site for HHAC. Today, what once were product companies like IBM want to be more like service companies and get more of their revenues from consulting for clients or operating things for their clients. It makes sense these types of revenues can be more predictable and they obviously can lead to more product sales too. IBM has been very successful at this: operating huge data centers and other back office operations for major global companies. They now get a huge portion of their revenues from services. And when these back office operations need new equipment, you can be sure that IBM supplies a lot of that as well.
But service companies also want to be more like product companies. Selling products has its own appeal you make a thing once and you resell it over and over again.
EnvisionOnline.ca develops products (web sites) with many, many of the components being repeatedly reused. By operating client web sites (consistent with the Three Laws of Power Selling, of course), EnvisionOnline.ca can be more of a service company with more predictable revenues perhaps.
Now another important feature of the Three Laws of Power Selling is to make sure that you are applying the Three Laws to not only your sales to your clients and customers but also thinking through how they might or should be applying the Three Laws to their efforts to sell to their clients. Huh?
Now one could carry this on down the food chain indefinitely but I think applying the Three Laws to two generations of the business-land ecology is enough to think about at any one time.
So let’s go back to Law 1 and see if we can find an example where we can apply this type of thinking. How about the case of Brymark.com, a seller of promotional items. One of their sales people, Dale (not his real name) is a keen golfer and he wants to sell promo items to Golf Pros but everywhere he goes, he hears the same story they don’t have the budget for it.
Now Golf Pros do a lot of teaching (their bread and butter) and Dale notices that a lot of those keen students are lawyers. Dale realizes that lawyers (at least in Canada) are usually in tough trying to find ways to market and sell to new clients Canadian lawyers tend to do less of those late night television ads than their US counterparts who don’t seem to mind a direct pitch like say: Have you recently been injured in an accident? Do you need someone to represent you and take your side?
So maybe Dale can solve the problem this way: he will sell the promo items to the Golf Pro but he will get one of Golf Pro’s legal clients to pay. This is how it works: he chooses a promo item that appeals to both of them the Golf pro and the Law Firm, say, mouse pads. He brands the mouse pads with both the Golf Pro’s information and the Law Firm’s pitch too.
Now the Law Firm gives out free mouse pads to its clients, many of whom are probable golfers, and the Golf Pro gives out the mouse pads to his clients, many of whom are probably in the market for legal services. By thinking about how the Golf Pro’s clients sell (or market) to their clients, Dale has made a sale and created a new marketing channel for both the Golf Pro (who gets the Law Firm to distribute his marketing info to their clients) and the Law Firm (who gets the Golf Pro to distribute their marketing info to his clients).
This is called co-branding and can work with more than two parties as well. For example, promo items for a high end men’s shoe store might work well with an upscale jeweler and a high performance auto dealership.
This kind of selling is more difficult to do because it involves a minimum of three parties: you, the sales person, and at least two co-branders. Anytime, you need three approvals to get a project off the ground, well, that’s tougher to get than a two party agreement. Obviously, the degree of difficulty goes up as you bring in more co-branders. Having said this, by making it more difficult for himself, Dale is also making it harder for his competition to duplicate too. And in the promo business, which is absolutely cutthroat at the best of times, that’s not a bad thing.
I really like how the Ottawa 04 International Animation Festival sold to one of their key sponsors (Electronic Arts, EA). Usually, these sponsorships are pretty boring put up a banner, hand out some brochures, demonstrate the products or service. Most sponsors get involved with good works out of guilt and don’t leverage their sponsorship dollars very well, if at all.
But the Festival had clearly thought about some of EA’s challenges, like the fact that one of EA’s biggest problems (circa 2004) is how to recruit top notch talent. By getting on the same side of the table as EA, the Festival thought about who EA is selling to; they need to sell to (i.e., recruit): software engineers, animators and computer graphics artists. And those just happen to be the kind of people who might come/be attracted to an International Animation Festival.
So EA brought their recruiting machine to town.
So the Festival was not only thinking about how they could sell to their customer (EA) but how their customer (EA) could sell to their customers (software engineers, et al). You can only see solutions like this when you are sitting on the same side of the table as your client and looking at their problems the same way they do. This leads us to Law No. 2.
Law 2 Some Examples of SOLUTION SELLING
Law No. 2 involves ‘solution selling’. I am always amazed at how many sales people make a sales call on a prospective client knowing next to nothing (or sometimes absolutely nothing) about the potential client’s organization and its problems and challenges. It’s hard to sell a solution when you don’t know the problem.
Solution selling is all about knowing a client’s business and business model in incredible detail so that your product or service addresses, in a very direct way, at least one of their key issues.
Solution selling often involves self-financing offerings, where the money the client needs to have in order to pay you for your services or products doesn’t actually come from them but from their clients; i.e., your client’s clients.
I worked with one NPO (Not for Profit) outfit and we devised and entire program for them that cost them $100,000+/- to implement but generated more than $600,000 in net funds from event participation and sponsorship. They never had to reach into their (short) pockets for a dime.
Furniture sellers and auto dealers do this all the time they provide attractive financing deals (OAC, On Approved Credit) like those don’t pay a cent events until some point in the future or by providing you with 100% financing at super low interest rates.
I have been involved in mergers and acquisitions where the acquiring company ends up with more cash after buying the other business than they had before. These are called ‘accretive’ financing deals they can be cash accretive or earnings accretive or both. This is another, more complex form of solution selling.
Another way to look at it is, if I am asked to help sell a company, one of the first things I might do is to try to find a way to provide the acquiring company with the financing to do it so they don’t have to reach into their jeans for any money at all.
In one transaction I am familiar with, the acquiring company bought a franchise for $30m, half down in cash and half paid at $5m per year for three years. (The numbers have been changed to protect the identity of the acquiring company).
They then entered into a long term lease for a facility and received a leasing inducement in the amount of $20m in cash from their Landlord. They also put in place a credit facility with their Bank for 50% of the value of their new franchise.
If you do the numbers, they put up $15m in cash to get into this business but received back (from the leasing inducement and the credit facility) a total of $35m so they had $20m more in cash after buying the franchise than before. Nice work if you can get it.
Accretive deals like this are much easier to do when you are a large company with a top credit rating and explains to some degree why the rich get richer and the rest of us, don’t
Real Estate transactions can often be like this too. It’s a form of Bootstrap Capital.
How can you acquire real estate with no money down? I get asked this all the time. In reality, you usually can’t do this; it’s more like acquire real estate with little money down. But it can be done. For those of you who are curious about this, you can read an example of how Betty and Phil (not their real names) acquired residential rentals with very little money down.
One of my former students started his residential construction business with no money down by finding a willing landowner to play along with him. He optioned a piece of land for almost nothing ($500), put his sign up, put a trailer on site and he pre-sold 10 units from plans. With the deposits he received from Purchasers, terms he got from his suppliers and with the co-operation of the landowner, he was able to profitably build more than ten single family homes in his first year.
The landowner and his suppliers got paid out of the closings. He had zero bank financing and practically zero cash when he started out but he did have one thing credibility. And that can take you a long way.
There are other ways people acquire real estate with no money down. For example, they might be speculators who intend to flip the land for a profit before they actually acquire it. Or they could buy land or buildings that are undervalued.
The latter was especially popular in the real estate go-go years of the 1980s. Another way of looking at it is they are over-leveraging the acquisition.
Basically, it works like this: buy an undervalued property; add some value by doing a lipstick (i.e., superficial) renovation or raising rents; get it reappraised at a higher valuation; mortgage the property for more than you paid for it.
Solution Selling and Measuring the ROI for a Potential Client of a Promotional Products Company: AcePromotions.com
Opportunity Is Everywhere if You Look and See
Let’s look at an example of solution selling where a promotional products company (AcePromotions.com) has decided that they need to be more than just product pushers. The sales manager for AcePromotions.com is writing to one of her sales people about approaching Tom Smith Toyota (TST) using a new approach for promotional products. This is what she writes.
Hi Guy: why don’t we try something like this with the Smith Toyota people? Call your contact over there and try to up sell them on this new solution selling thing we are trying. Let me know how it goes. Btw, take the lap top with you and the attached spreadsheet. I am sure that they will like the new approach. Here it is:
1. Let’s suppose that TST agrees to buy 10,000 windshield scrapers from us for $4 each or $40,000.
2. The scarpers say something amusing and informative about TST with a tel. #, web address, RL address on them.
3. TST also says that anyone who brings their scraper in to show them that they have one before, say, June 30th is automatically entered into a contest to win a free lease on a car for a cost to TST of $300 per month say or $3,600 for the year.
4. They are also entitled to a $250 cash rebate from TST on every new car sold before June 30th just by showing up their scrapers.
5. TST pays AcePromotions.com another $6,000 and AcePromotions.com hires students to go around to selected gas stations, collision repair places, car washes and give them out free.
6. We will already have pre-sold these non traditional outlets on this delivery option. They get the scarpers for free and can use it in their promotional efforts too.
7. We then gives selected gas stations, collision repair places and car washes the option to co-brand the scrapers and let’s assume that 50% of them choose to do so at an additional fee of $2.00 per scraper. Note that AcePromotions.com is selling half the scarpers for $6.00 and yet the distribution outlets are getting scarpers for half price. TST is happy too because they are getting their message into the hands of consumers who are not yet TST customers.
8. There is an advertising budget of $8,000 to support the new campaign paid by TST and managed by Brymark.com with TST’s ad agency.
9. To see how you measure ROI, see attached spreadsheet.
10. In this model, TST has to sell 14 new vehicles and 7 new leases in five months to have benefits that are 33% higher than costs.
11. You can play with the spreadsheet numbers and vary all of the inputs.
12. You should sit down with TST with this spreadsheet and go through it with them; they will know the variables better than we do.
13. Then we will track the program with the TST people over five months.
14. This is the level of detail we need to do for every proposed solution selling opportunity.
15. It is very engaging for our clients too; they really enjoy this type of involvement and will fool around with our spreadsheet model till the cows come home.
16. Also, most clients like TST get the fact that that there are other indirect results of a program like this�they will get a ton more sales after the five month period is over that are never actually measured. People like me don�t enter contests or take freebies but I would keep a TST scraper for a long time and when it is time to buy a new car, why there it will be as a reminder about what a good outfit TST is and how I should consider buying a Toyota anyway.
17. Note that: a. AcePromotions.com’s sales are much higher than if we just sold promotional products, b. we will have created a host of new selling opportunities (in the distribution channel; i.e., selling co-branded promotional products to the collision repair, gas station and car wash industry an selling them their own promotional products and delivery solutions) and c. our margins are much better too.
18. Furthermore, AcePromotions.com is more likely to make this sale because: a. we are providing a total solution, b. we are targeting the potential clients (future car buyers) of our client (TST) rather than our client, c. we are measuring ROI for our client.
Good luck, Sally
28-Jan-03 Confidential
Measuring Tom Smith Toyota (TST) ROI
Costs
Scrapers $4
10,000 $40,000 PRO
Delivery Solution $6,000 DEL
Car Lease Prize $300
12 $3,600 PRZ
Cash Rebate $250 REB
Advertising Budget to Promote Program $8,000 ADS
Benefits
Average Profit per Car Sold $3,000 APC
Average Profit per Car Leased $2,000 APL
Average Profit per Car Serviced $1,200 APS
How many additional cars does TST have to sell to have benefits greater than costs?
Solve this set of equations by iteration 1.333 MAR (Margin of benefits over costs)
[APC * n1 + APL * n2 + APS * n] – MAR * [PRO + DEL + PRZ + ADS + REB * n] = 0
n1 + n2 = n
n1 = additional new cars sold
n2 = additional new cars leased
assume:
n1 = 2 * n2 2
n1 = 0.666667
n2 = 0.333333
Number of new cars and leased cars such that benefits are 50% greater than costs
try n = 22 $954
Therefore, TST has to sell in the five months before June 30th
new cars 14.66667
leased cars 7.333333
Law 3 Some Examples of NEGATIVE COST SELLING/NEGATIVE COST MAREKTING
Negative cost marketing is really two things one is being able to show a client (and really show it using a spreadsheet) that by hiring you or by buying your product, their costs will go down or their revenues will go up or both. We are going to call this negative cost selling here.
Two is to find people who will pay you to market your products or services. We’ll call this negative cost marketing and, somewhat surprisingly, it can be quite common and would be more commonplace if people (read marketing professionals) were willing to think more in these terms to begin with.
The obvious example of this is what pro sports teams do. It seems incredible to me that people will gladly buy overpriced merchandise and walk around as unpaid billboards for their favorite sports teams. I mean in the Great Depression of the 1930s, some poor suckers got paid (wretchedly) to become walking billboard and shills for local businesses. Now we do it for free; in fact, we pay sports teams to do it for them.
Of course, it isn’t just sports teams that are in this space; Calvin Klein Jeans, Roots and other assorted brand name manufacturers long ago figured that people would pay to buy your stuff with your name and brand on the outside of their clothes. What’s with that anyway?
There are many other ways to induce people to market your stuff for you. One of my former students owns a beautiful, hand crafted wooden gondola that he charters out all summer. Then he pays to put it in storage for the winter. I suggested to him that he contact some of the large commercial office or commercial retail landlords in his area and see if they want to put his boat on display in one of their atria.
After all, his boat is an artifact a unique (in Ottawa) piece of artwork really. And while they won’t pay him to put his boat in their atrium, at least they won’t charge him to do it (we hope). So he ‘saves’ three times over he doesn’t pay to store the boat; he doesn’t have to pay for the space in the atrium and the free display he gets all winter to huge numbers of office workers or mall customers is a heck of a marketing tool for him. Let’s put it this way, if he doesn’t try something like this, his best marketing tool (his boat) sits hidden under cover for six months of winter.
Now let’s turn to negative cost selling. To do this, you have to know how your customer’s business (model) actually works. Study your client it pays off, big time.
I go through one example of re-engineering a business model for a friend of mine (Bill Farley, not his real name), who is in the media training business. We tweaked his business model to help his business out of a slump and we made it consistent with the Firestone’s Three Laws of Power Selling, of course. In my view, the latter is the cause of the former. You can read more about Bill’s Media Training Business Model Revamp and I won’t repeat it here.
Another friend of mine, Anthony (sorry but not his real name either) owns his own mail order house and part of his business model is to create his own customers through negative cost selling. I think he does it more because he is bored with the normal course of business than because he needs more clients. He finds that sometimes he can create more interesting solutions for potential clients than they can for themselves and, happily, more interesting work for himself. He sees it as a kind of challenge.
Anthony has recently gotten into the lumpy mail business today Canada Post and the USPS allow people to send all kinds of weirdly shaped objects through the mail. They had to adjust their business models too or face near oblivion.
So Anthony came up with the idea of helping a summer camp for distressed children raise money by using his bulk mail service. But he just didn’t go to them with a proposal of give me $15,000 and I’ll mail out thousands of solicitation letters. I mean how many of these does everyone see in a year anyway? And where do most of them end up? File 13.
No, he pitched them on sending a select group of CEOs and senior Managers (from a good quality mailing list he had) a lumpy mail piece containing a skipping stone and an invitation to a CEO stone skipping challenge event. Over 90% of these lumpy mail packages got opened and the response rates were in the stratosphere.
Everyone can skip a stone and everyone has childhood memories of time spent by the water on a perfect summer’s day.
He even got a Toronto quarry to provide the stones and sponsor the mail out too. Now that’s solution selling.
I like even better the example of Peter Patafie, owner of Patafies Inc., who started his packing and moving supplies business and in five years, built a $15m a year business from nothing with nothing.
Peter noticed how all the sales persons for moving companies in the Ottawa area were supplying their customers with packing supplies by first taking delivery of cardboard boxes, wardrobe boxes, bubble wrap, tape, tape dispensers, wrapping paper, what have you, in their warehouses and then the sale person would hump the stuff over to their clients homes in their vehicles. Peter saw OPPORTUNITY.
He thought that a better use of the sales person’s time was selling more moves (better for them since they are mostly on commission and better for the moving company obviously) rather than delivering boxes to people packing up for their moves. So Peter pitched every moving company this way: he would sell them packing supplies but his people would deliver them to their customers.
It was a simple idea but brilliant. Today, 98% of the movers in Ottawa are supplied by Patafie’s Inc. Peter got all Three Laws of Power Selling in one fell swoop: 1) he is sitting on the same side of the table as his customer (where his customer’s customer becomes his customer), 2) he is ‘solution selling’ (by making his customer’s sales people more productive) and 3) he is a negative cost too (since his customer’s customers are paying for the packing and moving supplies).
In essence, the moving company gets money for nothing they mark up Peter’s packing and moving supplies, sell them to their clients, Peter delivers the stuff, they never see it, they get the money (less Peter’s share) but haven’t done any more work and, in fact, have unleashed their sales people to sell more moves.
A few years later, Peter noticed something else by visiting his clients. (What a novel concept, wouldn’t email have done as well? Don’t think so.) They each had a zillion used boxes lying around. Boxes that Peter had sold his clients clients; after their moves, somehow they ended up back in the movers warehouses.
So Peter asked them what they did with the used boxes. They paid to have a recycler take them away. So Peter offered to buy the old boxes from them (another negative cost!) They might have thought Peter a bit foolish but they indulged him. Sure, you can buy our discarded cardboard, they said.
But Peter had noticed that plenty of people were scrounging old boxes from grocery stores, hardware stores, liquor stores, wherever. People who didn’t want to buy new boxes. So Peter started selling used boxes and he turned that into a thriving million dollar plus retail business in less than two years. Think about it Peter sells new boxes, later he buys them back at a fraction of the price and then resells them again at a substantial markup.
Peter has created his own clients seeded the fields and reaped the harvest, if you will. He created a new revenue stream and a recurring revenue stream for himself, both critical components to having a great business. And he made the connection with new customers efficiently and effectively by first visiting all the moving companies in the area, which is feasible for one person to do since there aren’t that many of them. And later, he created a mass market for recycled boxes by niche radio advertising.
At the beginning of this paper, I made the point that if you have to knock yourself out to make a connection with potential customers at huge cost in terms of time or money or both, your business won’t be sustainable and it will fail. So remember: finding, getting and keeping customers have to be (relatively) cheap and easy to do in order for your business to have a chance at success.
Conclusion
Really, Firestone’s Three Laws of Power Selling are woefully inadequate to by themselves create a truly powerful sales organization; there’s a lot more to it than my Three Laws, for sure. At its very essence, power selling is about becoming more creative, thinking a lot about your customer (and your customer’s customers’) needs. It’s about hard work. It’s about lateral thinking. It’s about seeing opportunities. It’s about knowing how the world works. It’s about training your whole team and I mean everyone including your receptionist and your accounting staff too to be power sellers.
Your accounting team is a great source of leads; why not reverse sell to people you buy from (aka, your suppliers). When I was with the Ottawa Senators, I didn’t like to buy from anyone who wasn’t already a season ticket holder or prepared to become one; I think we should expect people to buy from us if we are buying from them, provided it makes sense.
And nothing is worse (and this has happened to me a lot) than calling a tech company or calling a real estate company or any type of business and getting a receptionist who knows nothing about the company she or he works for. How is it possible for a receptionist not to know what real estate projects a company has on the go or what new products the firm just released with great fanfare at a tech trade show? And don’t blame the receptionist it’s management’s and ownership’s fault if they have untrained and uniformed employees running around.
In pro sports, they know how important it is to be prepared. They say that if you develop good habits in practices, it will carry over to games when the results really mean something, like whether you get to keep your job or get cut. In any competent military, they are fanatical about training and preparation because it saves their lives. You want to be a power seller? Then you and your entire organization need to be trained and prepared you need to do your homework and you need to learn how to be a power seller and then you need to practice it again and again because you will get better at it. You can train yourself to be more creative if you are alive to that possibility.
At the end of the day, people like to buy from people they like so you can’t neglect the human factor. My late father, Professor O.J. Firestone, told me if I wanted to get a deal done then it had to be face to face. I thought he was being a bit old fashioned but in this time of widespread email abuse and voicemail hell, I think his advice is even truer today than it was when he said it to me, in 1982.
Postscript: Recently, I took a course in real estate given by a fine teacher, Mr. Wayne Hancock of Oshawa and he added an important caveat. He said: ‘Selling is control.’ I instantly recognized what he meant. First of all, you always want to be the one who volunteers to write up the agreement. The pen gives you control. Second of all, most clients will behave irrationally at some point between negotiating the deal and closing it; it really doesn’t matter if they are seller or buyers there are always some kinds of second thoughts going on: either buyer’s remorse or seller’s remorse is trying to take over their minds. So deals tend to fall apart. If you have control over your own emotions and you have some influence with your clients, you can often put Humpty Dumpty together again by asking them simple questions, like, what is the alternative? (Summer 2005)
Cold Calling and Successful Selling: The three most important things in business are Sales, Sales, Sales,
1. Before you lift up the phone, think about whom you are calling. Know something about their business, go to their web site and have a ‘solution’ in mind this let’s you start a conversation with the prospect rather than making a sales pitch.
2. Even if the prospect doesn’t like your idea, they might still like you your creativity and initiative and the fact that you bothered to make the effort to do some research on them before you called. People like to buy from people they like.
3. If you do this and if you make 50 calls, you should get 10 (20%) F2F meetings.
4. Out of 10 F2F meetings, you should get 4 (40%) sales orders.
5. If your annual quota is $1m in sales and your average order size is $5k, you need 200 orders for the year or 4 per week.
6. That means you need to make 50 calls each and every week to meet your goals.
In summary then, we have:
• Have a conversation starter an idea of a ‘solution’ for them (‘selling is telling’*) have a success story to tell them about someone in a similar industry or situation
The Storyteller
• Talk about what their competitors are doing and what they are not doing that gets their competitive instincts going
• Do NOT sound like a salesperson (i.e. like you are reading a scripted message)
• Learn something about the prospect before you make the call
• Be nice to every receptionist (she/he can/cannot put you through to the right contact)
• Always introduce yourself
• Verify facts ‘Who is the decision maker’?
• Always have a call to action ask for the deal and have a paper ready that they can sign
• When you hear ‘yes’ stop talking, thank them for the deal, get a signature and then leave
• Always be courteous even when you get a ‘no’
• Remember ‘yes’ is the best answer but ‘no’ is the second best answer
• ‘No’ is better than a ‘maybe’ since ‘maybe’ just wastes everyone’s time
• A call to action gets you a ‘yes’ or a ‘no’ don’t be afraid to ask for the deal
• If you get a ‘maybe’ tell the prospect you are going to treat that as a ‘no’; they will either change their mind or at least you will have resolved the situation
• Selling is best done F2F; second best is by telephone; third best is by email fax and snail mail do not even rate
• Schedule appointments by saying I am going to be in your area on such and such a date (book two to four weeks in advance)
• Do NOT call to confirm appointments it gives people a chance to cancel on you
• If people are really rude, look at it as an opportunity to call them back in six weeks or so they may feel some remorse and you get the appointment and sale anyway
• Keep an up-to-date data base telephone numbers and email addresses especially
• Always thank people for their time in writing
• Always volunteer to write up the notes of a meeting or the agreement he/she who controls the pen, controls the deal
• Sometimes use a marketing survey to get in the door
• Ask a lot of questions and listen carefully people like to talk about themselves and their companies; when you listen, opportunity will present itself
• When people say send me some info, make sure they really want it and it’s just not a way to get you off the phone
• If they say they are not interested, ask if you can follow up in a few months and then do
• Silence is a weapon sometimes just by being quiet, they will answer their own objections and talk themselves into a deal
• DV x Q = $, Differentiated Value times Quantity equals Dollars**; what this means is you have to talk to your prospects about your differentiated value what makes you different and better
“In order to be irreplaceable, one must always be different,” Coco Chanel
[Please note that this image has been edited to conform to the policies of this site wherein all of the content (except where noted in rare cases) is for a General Audience, Ed.]
• If call is not going well, ask to be included in the next opportunity: Can you include me on the bidders list next time you order? Get an email address and follow up
• Use the six degrees of separation to find someone you know who knows them but don’t rely on third party introductions go after it yourself; use them as references and sources of testimonials
• Always practice bottom up selling start with a peer-to-peer relationship before you get the Presidents of the two companies involved; they should only basically get involved to bless a deal
• Always try for at least a two year deal if every sale you make is one-off, every year you are like a baseball player, you start over at 000 home runs. If you do multi year deals, your sales are guaranteed to increase year over year and increase much faster than if every deal is a one year deal
The Two Step Process – You Only Need to Meet with the Client Twice to get the Deal
Step 0: Study the biz and come up with a case study that is relevant and tells an interesting story. Call the prospect and start a conversation.
Step 1: Meet with the prospect face-to-face this is a discovery meeting but a discussion is taking place about the case study you are using/suggesting and determining its relevance to their requirements. You are determining their budget and other factors in this meeting.
Step 2: You make a final presentation, ask for the deal and get a signature or not.
Strategic Selling
See if you can do some strategic selling. Strategic selling is where the cost to your client of buying from you is negative. This is the easiest type of sale to make.
For example, a client buys something from you but you have already lined up someone to buy those products or services from them, you have guaranteed them a win, basically. See for example: http://www.dramatispersonae.org/NegativeCostMarketingArchitectFirm.htm
Sales People are Entrepreneurs
A. Every sales person is really running his or her own business.
B. More sales = more income for you.
C. Your cost side is you.
D. The great thing is you don’t have to worry about all those other kinds of things like paying to keep the heat on; you just concentrate on your own business, selling more
E. You are (mostly) your own boss.
F. Create your own PWS (Personal Web Site). Put your bio on it, a picture of you (even on the Internet, people like to see whom they are dealing with), other interesting material you have created/written (e.g., any case studies you have written), testimonials about you given to you by your clients, your contact co-ordinates, etc.
G. You need to be an expert in selling obviously but also an expert in marketing yourself.
H. Remember that the harder/smarter you work, the luckier you get.
Sales are the teeth of the business. Sales people are valuable to every business and even in difficult economic times, they are rarely laid off. When a JOB opens up in the Marketing Department, one typically sees dozens or even hundreds of candidates, all equally well dressed and well presented. Marketing types mostly make $30 to $50k. Sales people make $80 to $100k+.
But people are afraid of sales. They think selling is selling stuff to people who don’t want it when in reality, real selling is providing timely solutions to real problems clients are experiencing. Successful selling is a rush and it is very creative. It also involves a lot of marketing especially if you view your sales JOB as your own business and a big part of your JOB is marketing – yourself.
Prof Bruce