Sale (Photo credit: Gerard Stolk (vers le Mardi gras))

High-Profit Selling. Win the sale without compromising on price. Mark Hunter. 2012. ISBN 9780814420096. This a core book for your sales library on selling value and not discounting on price.  But that’s not all this book is, it is chock full of great sales strategies and the tactics to pull them off.  In a slump , and had a really bad sales call?  Bounce back by calling your best customer and rebuild your confidence.  Torn with what to do with RFPs, here are four approaches that you may want to consider before you do not respond. ie how to win even if you chose to lose the bid. What you want to work through the Christmas to New Years break.   How to get a sale from a buyer on a Friday afternoon.  A very valuable, clearly organized and well written book. A must buy for sales and sales managers.  His blog is a great resource.

Related articles

• Value-Added Selling. How to sell more profitably, confidently and professionally by competing on value not price. Tom Reilly (regnordman.com)
• How to Say It:Business to Business Selling. Geoffrey James. (regnordman.com)
• Accelerate the sale. Kick start your personal selling style to close more sales, faster. Mark Roberts. (regnordman.com)
• Bottom-Line Selling. The sale’s professional’s guide to improving customer profits. Jack Malcolm. (regnordman.com)
• Hunter and farmers – it’s time to change sales strategy – A STC Classic (customerthink.com)
• What Great Salespeople Do. The science of selling through emotional connection and the power of story. Michael Bosworth & Ben Zoldan (regnordman.com)
• Sell Now! Adaptive Strategies for Today’s Marketplace.Stacia Skinner. (regnordman.com)
• Pricing and Profitability Management. A practical guide for business leaders. Meehan, Simonetto, Montan & Goodin. (regnordman.com)
• Selling to Sales People With War Stories (frontofficebox.com)

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Inside Apple. How America’s most advanced- and secretive – company really works. Adam Lashinsky. 2012. ISBN 9781455512171. (e-book).  Unlike the recent  Steve Jobs bio, this is a fact filled book on the company and the players (as well as Steve Jobs)  that should be on every Apple shareholder and traders reading list. The author is a long time Fortune reporter ( a magazine that Steve Jobs often favored with information over others). You will learn more about the inner workings, strengths and above all the culture of Apple.  As a journalist, Lashinsky writes clear concise copy making the book a good read.   He succeeds in helping pull back the veil in this company.  Highly recommended.

Related articles

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• ‘Inside Apple’ author Adam Lashinsky says Apple is antithesis of Google, talks post-Jobs culture (9to5mac.com)
• Inside Apple: one of the most secretive organisations in the world (telegraph.co.uk)
• Apple’s secrecy extends to fake projects for new, ‘untrusted’ employees (examiner.com)
• Why Apple Keeps New Hires in the Dark (news.dice.com)
• Pulling Back Apple’s Magic Curtain: Fortune’s Lashinsky Talks About New Book (Video) (allthingsd.com)
• The Apple Hiring Model – Let Them Work On Fake Products Till We Can Trust Them [Video] (thetechnologycafe.com)

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How to Say It: Business to Business Selling. Geoffrey James.2011. ISBN 9780735204584.  This is a desktop book that every salesman and sales manager needs to have. It is extremely clear, concise and well written. Each chapter is a treasure trove of useful nuggets.  He covers the bases:

• How to Craft an Elevator Pitch
• Find Hot Sales Leads
• Negotiate the Best Deal
• Sell to Top Execs
• Build Sales Partnerships
• Get a Customer Referral
• Prospect with Voice Mail
• Give a Compelling Product Demo
• Move a Lead to a Prospect
• Develop B2B Campaigns
• Close a B2B Deal
• and more

He built this book through countless interviews with sales giants like Tom Sant, Wendy Weiss, Linda Richardson, Keith Eades, Jeff Thull, Keith Rosen, Joanne Black, Jeffrey Gitomer and others.  As a regular contributor to Selling Power and other publications, the author really knows what works. Buy, read and review.

Related articles

• Why B2B and B2C Sales are Different (rocketbuilders.blogspot.com)
• 10 questions to ask everyday (interconnecta.wordpress.com)
• Why Sales Hates Marketing: 9 Reasons (rocketbuilders.blogspot.com)
• Jan 16, Business to Business Selling: Use Effective B2B Marketing Strategy (more-for-small-business.com)
• Pricing Optimization in a B2B World: Value-Based Pricing Comes of Age for Sales (rocketbuilders.blogspot.com)
• B2B Marketing: Why Maximising Leads Won’t Maximise Revenues (rocketbuilders.blogspot.com)
• 10 Must-Read Books for every B2B Sales and Marketing Bookshelf (rocketbuilders.blogspot.com)

Value-Added Distribution Services That Strengthen Customer Relations

Guest Post by Derek Singleton

Derek approached me after I reposted some of his very good content on adding value. After reading this, head over to his website and see his other good advice.  Reg

Distributors always have a host of pressures to contend with. For instance, the industry is constantly grappling with fierce competition and rising fuel prices. Under these conditions, it’s becoming more important than ever to maintain customer relationships. Like other industries, one of the ways that distributors can strengthen their customer relationships is by offering value-added services.

But what services should distributors offer? Customers have a whole laundry list of services they’d like to see added. These services range from providing consultations to managing customer inventory. Of course, distributors can’t provide all of these services. They have to pick and choose which they’ll provide. I’d like to highlight three value-added services the industry should consider providing their customers.

1. Vendor Managed Inventory

Vendor managed inventory (VMI) is a concept first popularized by Walmart. Under a VMI system, the distributor assumes responsibility for keeping their customer’s inventory levels stocked at optimal levels. While this is a complex undertaking, advancements in web-based software and mobile capabilities are making it easier to manage inventory on a customer’s behalf. As an example, a distributor at their customer’s location can access their their software with their smart phone and initiate a new purchase order to restock inventory levels.

2. Delayed Product Assembly

Distributors that work with manufacturers have an opportunity to increase customer satisfaction by delaying product assembly. Distributors get great discounts by purchasing component parts in bulk and assembling the product as orders come in. However,  managing product assembly can be tricky. To effectively manage delayed assembly, distributors should rely on the bill of materials (BOM) functionality in their wholesale distribution software. A bill of materials allows distributors to track the components parts, item numbers and proper packaging specification to ensure that final assembly is done correctly.

3. Improve e-Commerce Support

In the digital age, more and more retail are operations are asking distributors for help in fulfilling online orders. Supporting online sales distributors shifts the traditional dynamic of distribution operations by shortening delivery times and increasing the number of shipments. To handle the demand of fulfilling online sales, distributors need to focus on integrating their system with their customer’s. This allows distributors to receive orders instantaneously and to pick, pack and ship these orders in the most efficient way possible. Of course, it’s also possible to fulfill online orders through manual methods but these have a large efficiency gap compared to automated systems.

These are just a few of my ideas on how distributors can improve their customer relationships. If you’d like to see an expanded list of value-added services, please visit the Software Advice website to view the original article at: How Distributors Can Improve Relationships with Value-Added Services.

Related articles

• How Distributors Can Improve Relationships with Value-Added Services (rocketbuilders.blogspot.com)
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Bottom-Line Selling. The sale’s professional’s guide to improving customer profits.  Jack Malcolm.  2011. Second Edition. ISBN 9781935961321. This was first published in 1999, but the story is is even more true today as then. If you want to sell in value, you need to prove it to  the client using their data. To be more than a discount salesperson this is the type of book you must devour on your way to the top 5%.

A long time ago I built and used a presentation,  “What Your  CFO Can Teach Your Sales Team”. In it I laid out the various simple quick ratios a salesman can use to analyze a prospects annual reports to see if they would qualify for terms, their profits and where they came  from , growth rates, and several others.

Malcolm’s book goes much further than that PowerPoint of mine in a a very readable and digestible manner.  Any solution seller will recognize the terms used and also learn many more.  I always ask clients, “Do your salespeople  deserve to take the client meeting?  Have they done their homework.? “  Malcolm’s book has the right kind of homework here for all the value sellers. Excellent revision and a valuable addition to any sales managers/salesman’s library.

Paul McCord does a terrific review of this very valuable book.  See http://salesandmanagementblog.com/2011/12/05/book-review-bottom-line-selling-by-jack-malcolm/

Related articles

• Book Review: Bottom-Line Selling by Jack Malcolm (salesandmanagementblog.com)
• How to Become a Cash Flow Engineer for Your Customers (rocketbuilders.blogspot.com)
• Value-Added Selling. How to sell more profitably, confidently and professionally by competing on value not price. Tom Reilly (regnordman.com)
• Accelerate the sale. Kick start your personal selling style to close more sales, faster. Mark Roberts. (regnordman.com)
• Pricing and Profitability Management. A practical guide for business leaders. Meehan, Simonetto, Montan & Goodin. (regnordman.com)
• Zero-Time Selling. 10 Essential steps to accelerate every company’s sales. Andy Paul (regnordman.com)

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Zero-Time Selling. 10 Essential steps to accelerate every company’s sales. Andy Paul. 2012. ISBN 9781614480501. This short (168 pp) tightly written book punches way above its weight class.  The 10 steps are simple, obvious and elegant. It relates very well to changes we are seeing in the marketplace, changes that negatively impact technology sales.

Why change?  Here is his comment on the buyer’s life today.

“Customer firms are no different from any other business.  Most productivity gains are due to people being pushed to work harder , to increase their output within the same number of hours.   If buyers are stretched thin like everyone else, then it stands to reason that one good avenue for creating value for the customer through the selling process is to reduce the time he needs to spend assembling the information required to make a fully informed decision.”

As a salesperson, do you deserve to be in front of the buyer? Have you done your homework on his industry and his needs plus do you have the product knowledge to answer the most important of their questions immediately?

To make Zero-Time work ( and this is not a quick fix ) sales managers need to be able to measure that:

• 100% of leads are being followed up
• lead follow up time is meeting your set time goals (30 minutes? )
• the salesperson is answering the buyers needs/questions without extra follow-ups?
• weekly reviews with ea salesperson show that:

they are tossing the losers from their pipeline and

selling  the proper solution to the people that need it. (Often this is the researcher/user, not the payer who is  waiting for the users approval/research results.)

This book is recommended to sales people and their managers who want to step up their game in response to the changing selling situations.  One cautionary note to sales managers.  The Sales Lead Black Hole research indicated that the more seasoned/mature salesperson can be expected to react negatively to extra manager attention to lead follow-up. See below. (full post)

We also find that as sales reps become more experienced, they are less likely to:

1. pursue marketing-generated leads,
2. respond positively to managerial tracking of marketing lead follow-up, or
3. respond positively to greater marketing-generated lead volume.

Thus implementing a change to your program means more than a Jean Luc Picard “Make it So” .

You will need to think this through and work together with your star performers first.

Related articles

• Sales Training: Value Propositions Continued (rocketbuilders.blogspot.com)
• 4 Ways Marketing Automation Will Shorten Your Sales Cycle (hubspot.com)
• Accelerate the sale. Kick start your personal selling style to close more sales, faster. Mark Roberts. (regnordman.com)
• Implementing a Value Based Sales Approach – Part 4 of 4. Some sales training ideas (regnordman.com)
• Sales Contests: How do you Focus on the Right Things? (rocketbuilders.blogspot.com)

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Some recent articles on value, pricing and sales came across my desk last week.

You”re pricing it wrong from SmashingMagazine .  You’re pricing it wrong is by Fran Galperin.  He presents some very compelling arguments making this a useful read for all.  I  I picked up on two definitions of value he used,  Perceived and Objective value.   In his words, “You can set a higher price without changing your product just by changing the potential customer’s perception of the product.”  Objective value is how much would people pay if they were indeed rational decision-making machines. “

He believes that buyers are not logical, rationale decision makers, but are much more emotional about decisions, giving the perceived value more importance in a sale. “Vendors can improve the perceived value through marketing with such things as copy, visual design, and demos.” In our research we have seen how marketing has just such an impact on presetting the reference price of a product and contributes to the the retention (or loss)  of value through the sales process.

The Sales Lead Black Hole ( download)  from Penn State Business school – marketing is a scholarly analysis of why 70% of marketing’s leads are not followed up by the sales team.  It is good research and could be one of a kind in this area.  In the summary they say,”

“We find that sales reps spend more time pursuing marketing leads if they

perceive their firm has an effective sales lead prequalification process.

We also find that as sales reps become more experienced, they are less likely to:

1. pursue marketing-generated leads,
2. respond positively to managerial tracking of marketing lead follow-up, or
3. respond positively to greater marketing-generated lead volume.

Our results also show that the better the sales reps’ past performance, the more likely they are to respond positively to

an increase in volume of marketing-generated leads and respond negatively to managerial tracking of marketing lead follow-up.”

This is material that gives good directions for how sales managers can make a greater impact on the team performance.  It is academic but is very direct in application and well worth the read.

Exploring Price Fairness Perceptions in China and U.S. by Lisa Bolton, associate professor of marketing at Penn State’s Smeal College of Business, along with Hean Tat Keh from Peking University and Joseph W. Alba from the University of Florida, Pennsylvania State Business School.   Fascinating bit of research.   E.g.

• Bolton, et al  find that both Chinese and American consumers judge it fair to pay a lower price but unfair to pay a higher price than paid by another customer. In other words, “what’s good for me is fair”—a kind of egocentric bias at work.  However, the Chinese are especially sensitive to the type of comparison. For example, Chinese consumers judge it unfair to pay a higher price than a friend but are indifferent to the price paid by a stranger. In contrast, Americans are indifferent to the friend-stranger distinction, judging it equally unfair to pay a higher price than paid by either a friend or a stranger.
• These findings reflect the tendency of Western cultures to possess an independent, individualistic identity, whereas Eastern cultures are interdependent or collectivist in nature. Bolton says the Chinese “view the world as a network of social relationships and are, as a result, strongly oriented toward the in-group (friends and loyal relationships).” In contrast, Americans see the world in terms of independent and autonomous individuals and are less sensitive to relational information.  For example, prior research shows that Americans perceive friends, coworkers, and business owners as equivalents, but such is not the case for the Chinese, who put greater emphasis on their personal social networks.
• Another concept that comes into play in the research conducted by Bolton and her colleagues is a culture’s sensitivity to mianzi or “face.”  Face is defined as status earned in a social network, and a person can either gain or lose face depending on the situation. Keeping in mind the difference between the collectivist Chinese consumer and the individualist American consumer, Chinese consumers typically experience a greater loss of face if they pay a higher price than a person in their in-group as opposed to someone in an out-group. For example, paying a higher price than a friend affects the Chinese consumer’s status or “face” within the social network and is experienced as a feeling of shame. In contrast, the American consumer tends to feel anger at paying a higher price than another consumer, friend, or stranger.
• Ultimately, consumer price fairness response and emotional reactions affect customers’ interactions with the firm in regards to purchase intent. For example, American consumers report lower intentions to re-purchase after paying a higher price than another consumer, whether friend or stranger. Chinese consumers are less likely to re-purchase after paying a higher price than a friend, but are unaffected by what a stranger paid.
• Interestingly, the cultural differences in sensitivity to relationships among consumers also extend to relationships between consumers and firms. The researchers find that “Chinese consumers judge it unfair to pay a higher price than another customer when in a loyal relationship with a firm but are relatively indifferent when in a first-time buyer situation. In contrast, Americans judge paying a higher price than another customer as unfair regardless of past loyalty to the firm.” Again, the results appear to be driven by face:  Chinese consumers experience a greater loss of face when they pay a higher price to a vendor with whom they have a long relationship as opposed to a new vendor.

These findings by Bolton and her colleagues suggest that price perceptions are more a matter of psychology than economics—with many implications for marketers, particularly in the areas of dynamic pricing and relationship marketing. If consumers feel that dynamic pricing is unfair, marketers can defend themselves against consumer backlash by using differentiation to reduce the impact of the price comparison. Doing so may be especially important with American consumers, who will resist paying a higher price regardless of the identity of the other consumer.

In terms of relationship marketing, conventional wisdom states that loyal consumers are less price sensitive, so they’re willing to pay a higher price. According to Bolton, “Our research suggests that, if anything, loyal consumers are more price sensitive.” Americans are equally sensitive regardless of whether they’re loyal or first-time buyers, and Chinese consumers are more price sensitive when loyal. As a result, marketers need to take into account the importance of culture, and the role of social networks and personal relationships, in order to effectively market their products in the United States and China.

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Rusher’s Gap and its implications on pricing.  (Thanks to David Moulton for pointing this out to me.)  Rusher’s Gap is named for the former magazine publisher William Rusher. Rusher’s Gap is the difference between the extra amount you figured something would cost and what it actually did cost.  Here is an example common today in software sales.

One of the unplanned outcomes of the hey days of big , costly ERP software implementations is that savvy CFOs and procurement officers who have gone through the process now believe that if the software is quoted at  say $350 000, the true cost of deploying, and implementing it will be another $350 000, a Rusher’s gap. making  the total is twice as much.   Thus sometimes when buyers receive quotes  for software now, they do not believe the number but automatically double the amount, causing them to push back.  As Bob  Artner says  on TechRepublic, this is different from sticker shock . The price oriented  salesperson  goes back to his manager and negotiates a hefty $50 000 discount (14%). The purchaser sees a $ new quote for $300 000 and in his mind makes that a $600 000 total purchase.

Artner goes on to say”

Rather than spending your time defending the cost you quoted or speculating how you can save money at the margins by cutting out features, what you need to do is convince the would-be client that the number you quoted, no matter how high, isn’t going to go significantly higher.  In other words, instead of trying to defend x, you need to explain why it’s going to cost x, and not 1.4*x, and then some.

How do you do that? Well, here are some suggestions (and there are plenty more):

1. 1. Make sure that your numbers are right before you walk into the room.
   2. Provide milestones on the project path that break down the expenses by project phase.
   3. Perhaps most importantly, provide references that can attest to your firm’s ability to accurately forecast project costs.

Thus if  a sales force is working from a value based pricing model, when faced with what could be a Rushers’ Gap, they need to be prepared with the above proof and activities.  Better yet, the value based pricing model includes a response to Rushers Gap. For any selling organization, on budget execution after the sale is paramount to providing proof needed in the next presale in order to get to the value based pricing.

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Value-Added Selling. How to sell more profitably, confidently and professionally by competing on value not price. Tom Reilly. 3rd ed. 2011. ISBN 9780071702683.  This is the complete sales book for anyone who wants to break out of the zero sum game of selling on price.  Great point in the book- when asked, a majority of B2B customers see that 25% of the value of the products they buy comes from the salesman himself. Ask yourself, what have you done to deserve to take the meeting with the high value prospect? have you done the work to bring value yourself?

This is a  very current salesman’s bible.  Plus its a  very practical easy to read guide to getting the job done whether you are a part of a huge well supported multinational team or a single sales guy in a start up.  He starts where you need to and has lots of guidance for the sales person who has been forced into a price only style but wants to move to selling value ( the smarter way).  A must have for a sales manager and a salesperson who wants to be a high earner.

If selling on price has you or your organization trapped in a cycle of tightening of margins and unrelenting price pressure then this book is essential to your sales team and will be  a very valuable resource for you.

Related articles

• Accelerate the sale. Kick start your personal selling style to close more sales, faster. Mark Roberts. (regnordman.com)
• Implementing a Value Based Sales Approach – part 3 of 4. What sales must do. (regnordman.com)

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Value-Based Pricing. Harry MacDivitt & Mike Wilkinson.2012. ISBN 9780071761680.  This is one of the best texts on this topic I have run up against so far.  First the descriptions of pricing and how it is arrived at is succinct, clear and bang on the money.  Second this is the first pricing book that really identifies how many objections that sale can find with changing the pricing strategy  as well as the huge obstacle that sales is to implementation.  Then they do show you how to capture customer value in order to extract the price you deserve. The case studies at the end of the book are a bonus for those serious about implementing value based pricing. This is a must have reference for sales and marketing organizations as well as CEO’s.  Plus with both authors from the UK, they do not waste a word- it is all clear and valuable.

Related articles

• LinkedIn Poll – Where does pricing have the most impact in the sales funnel? (leveragepoint.com)
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• Implementing a Value Based Sales Approach. Part 2 of 4. Marketing (regnordman.com)
• The Art of Pricing: How to find the hidden profits in your business. Rafi Mohammed. (regnordman.com)