Find greater returns on your cost of sale.

In this article, I will review some key aspects of the industrial sales model, that is :

  • how to conceptualise the sales function from an organisational perspective;
  • the language of industrial selling and the journey to a successful sale;
  • understanding the three key strategic options for competitive positioning and the role of influence in successful sales conversion.

This article draws on work by industrial psychologists, some of our best training organisations, and from my first hand experience managing multi-million dollar sales targets in some of our best technology companies.

The sales function.

The attached figure describes the key elements of industrial sales function. On the top line you have a description of what a sales function is supposed to do: Understand where the revenue opportunities are (revenue management), generate the ability to effectively compete for those revenues (competitive advantage), and manage the cost of selling into the markets you wish to serve (cost management).

The key management tasks are to determine how to address the marketplace, what business assets are needed, and how to actively manage the resources to address the markets being targeted.

For each of those tasks, organisations need to make strategic decisions about which markets, what value, what resources, and what the key outcomes and results (OKRs) are going to be put in place to shape the sales function.

With the strategy in place, the organisation needs information, to guide opportunity management, territory assignment, and opportunity coverage.

The organisations challenge is to keep these cells in alignment while responding to the changing circumstances an organisation inevitably encounters in the marketplace.

In my own experience running high performance sales teams, things inevitably get out of alignment for a range of reasons. The sales manager has to continually prioritise where to invest their time by being able to identify the weakest areas, hypothesising change impacts, and deciding where to invest management resource.

Sales language.

One of the biggest challenges in any organisation is communication. Having a common language supports better communication and decision making. There is a common language that describes any sale and it is both simple and powerful.

We know that any sale happens because the customer has a need, you have a solution, and your solution fits with the customers buying vision. Miss out on any one of those items and you have no sale.

This implies that there is a formula that must be met, at a minimum, for any sale to happen:

  • The customer must have a compelling reason to act (CRA).
  • Your solution must have unique business value (UBV).
  • You must be able to convince the economic buyer i.e. have access to power (P)

Any sales opportunity is a function of CRA + UBV + P.

In my view this is the core of an “ontology” of industrial selling. Ontologies address questions of how entities are grouped into categories and which of these entities exist on the most fundamental level.

Why do I say that?

Firstly the CRA+UBV+P implies order. For example, if an organisation spends sales resource on trying to position unique business value, without having established a compelling reason to act, they have taken a big risk with their resource. Ideally, you would only invest time on developing UBV on customers that have a clear need to buy your solution.

To simplify it, you don’t drink when you are not thirsty. Don’t waste your water trying.

In the language of sales this order applies:

  1. Establish CRA.
    • What is the customers pain? Who cares and why? Is there a compelling reason to act?
    • Is there an opportunity?
      • If no – disengage or start another initiative to create or find CRA.
      • If yes – go to UBV.
  2. Establish UBV.
    • What is the customers buying vision?
    • What is your unique business value? Do they agree with it?
    • Who can influence the outcome?
    • Is my value recognised?
      • If no – disengage or re-engineer buying vision.
      • If yes – go to P.
  3. Establish Power.
    • What is the evaluation criteria?
    • What is the business risk for the client?
    • Do you meet the evaluation criterion and have you minimised risk?
    • Does the power sponsor – economic buyer, support you?
      • If no disengage or realign your power base.
      • If yes – monitor change.

Customers buy, mostly, when their expected solution value exceeds their cost and risk.

There is a kind of implied contract between sellers and buyers. Sellers invest their time and money understanding customer need, customers invest their time understanding value and risk. The difference between the two parties is this. Customers are trapped in their own organisation or reality. Sellers however can choose to move on, and always have a choice to spend their time elsewhere, farming other and perhaps better opportunities.

The importance of sales language should be self evident. What is presented here is a simplification – there are many question categories for the CRA, UBV, and P. As each question is answered through the sales cycle, the chances of conversion increase or decrease.

The sales language is a key input into the sales pipeline. The language describes the effort and return and puts everyone in the business on the same page when it comes to market engagement.

The power of the language is most visible when you decide to disengage on an opportunity and spend your sales time elsewhere. Consider the following two pipelines – same resource, different outcomes. In the second case the seller disengaged from 2 opportunities that were taking a lot of time to get through CRA/UBV stage – and used their time to get more (better) opportunities into the pipeline.

An organisation with an effective sales language can look at a sales pipeline, like a flower grower looks at their bed of flowers. You can see if your watering is working, what flowers are responding, what flowers are very thirsty, and what flowers offer the best return when you finally cut them and monetise them!

Sales differentiation.

In the market for ideas and products you are rarely alone. You compete with sales organisations that functionally may be as good as yours or at the very least competent in how they perform.

Moving beyond sales ontologies, what often makes the difference at the final stage are the more difficult concepts of strategy and influence.

Strategy can get very messy, but it can also be simplified. If you are on a battlefield there are only ever three strategies at your disposal:

  • Frontal – you believe you are stronger so you go forward with all resources into the organisation.
  • Flank – you believe you may not be stronger, but are faster or have a particular strength. You focus on the oppositions weakest links and break their line.
  • Fragment – you believe the battle is way to big to win. You focus on chipping off a smaller piece that plays to your strengths and can be consumed by your organisation.

In my experience any sales strategy comes down to one of these things, and often strategy will change as conditions change.

Of all the strategies, the frontal is perhaps most prone to disappointment on many levels. Expectations are high, hubris can overwhelm seeing the real competitive threat, and inevitably frontal strategies get attacked by flankers and fragmenters.

Thinking strategically this way can simplify how you see your competition or potential threats and focus your sales resources.

Influence on the other hand is the hardest to simplify. When we think about what influences us as individuals, we find that we are the product of many experiences and beliefs. But there is also a way to simplify it (somewhat).

We have individual differences, but we have all evolved out of the same soup. Part of what has made us successful as humans is that we are cognitively hardwired to respond in certain ways to stimuli. For example, humans have evolved to form group bonds. which from an evolutionary point of view has been a key driver of our success as a species.

This has been the studied by many psychologists but one I personally like is the framework of influence put forward by Dr Robert Caldini . He spent 2 years as a door to door sales person looking for common influence triggers that could persuade people to act on their underlying needs – with him. The figure below is a snapshot of his early conception of influence describing the persuasive tools that we are all, evolutionarily hardwired, to respond to.

There are now many more “tools of influence”, but these six are good to keep in mind when you are trying to achieve a sales edge through being more persuasive.

A word on persuasion. It is only the gift wrapping of everything else your organisation does to manage its sales activity. If the wrapped box is empty, customers inevitably find out sooner or later. However sometimes the gift wrapping is what makes the final difference between two equivalent products, and in that sense it is important to consider.

Strategy and influence go together. For example, if your sales representative has a personal or family connection with the economic buyer, you may choose a frontal sales strategy. Liking and frontal go together well. If on the other hand you have some special feature, scarcity and flanking or fragmenting go together well.

The bottom line is that strategy and influence work together as the head of your sales spear. One sharpens the other.

Summary

Sales effectiveness doesn’t live in a black box or a star salesman. It starts with a functional set of organisational components to create business assets, that are focussed on market segments. The effective deployment of those components relies on a common organisational language around sales, and clarity on the pipeline. This creates measurements and metrics around the functional components of a sale CRA + UBV + P.

Those functional components are enhanced by choosing the right strategy and being aware of influence and persuasion in the delivery of sales messages.