Like CEOs, salespeople must have a strong asset management program.
Posted Sep 1, 2005
To be successful, salespeople need to develop a CEO mentality. They need to view their territory as a separate company that they run with profit and loss responsibility. Salespeople should have an acid test for assessing their activities; if I had to fund every penny of my salary, benefits, expenses, and other costs of acquiring this piece of business and in return get reimbursements and 30 to 40 percent commission, would I do it? That's the bet companies are making in their salespeople everyday which unfortunately is usually a poor bet. The best salespeople think like CEOs. They may even lack a good sales strategy, but succeed because they look at the sales cycle as a business investment.
A salesperson with CEO mentality understands that he has to manage and control five assets to be efficient in his day-to-day selling activities. Salespeople have to be effective asset managers and must be protective, judicious, and discriminating about who they will allocate their assets to.
The five assets are: time, information, resources, relationships, and self-concept.
Time--your single most important asset. Unfortunately it depreciates and cannot be recovered. Once you've given it away you can never get it back. Since time is money, be very discriminating as to whom, when, and under what circumstances it is allocated. Not only do we have to manage spending time on the right people but we also have to work to shorten the length of time it takes to sell to people. Time kills all deals, and shortening the selling cycle is critical to managing time. The longer they sit out there the greater the chance they will go south. Most salespeople operate under the exact opposite assumption. They believe if they hang in there, outdistance the competition, show the customer they care, and be assertive they will ultimately prevail. In reality, this is simply not true. Professional salespeople are good at qualifying their opportunities and quit early when they are operating under non-optimum conditions. They know there are only two winners in a competitive selling situation, the salesperson who was awarded the deal and the salesperson who lost early and saved time.
Selling is more about sifting, sorting, and selecting opportunities that have the greatest likelihood of closing as opposed to always trying to sell, convince, persuade, and cajole. A CEO would look at acquisition cost as overhead that needs to be judiciously guarded and protected. Unfortunately, 80 percent of what salespeople are spending their time on has low value and probably won't close. Working this way is a waste of your most valuable asset, time, and not consistent with a CEO mentality.
Time should also be viewed as an inventory control system. A CEO looks at inventory with one thing in mind, how to turn it as quickly as possible. A salesperson with a CEO mentality sees his sales pipeline in the same way. He must move his clients quickly and profitably through his pipeline, while keeping them comfortable and feeling no pressure. He knows the longer it takes to sell them, the more time and money he has to invest.
Salespeople believe they can manage time. Time management is an oxymoron. You must become a master of prioritizing. Most salespeople make the mistake of trying to manage time by organizing their week with activity that is unqualified and a poor use of their time. Two of the greatest skill sets a salesperson can have is being able to quickly assess whether a client has a compelling reason to change, and being able to confidently walk away from opportunities that will be a time drain. Top sales professionals are not afraid to walk away and strive to walk as early in the sales process as possible, supported by an effective qualifying model.
Information--Salespeople misuse this valuable asset by giving out information and solutions to clients before they qualify. Salespeople are frequently rendered to the status of free consultants because they freely and willingly give out information believing it will make the sale. If they had a CEO mentality, they would guard and protect their information knowing that it is one of their most important assets. Salespeople must realize that the most important information is the information the customer has. But since most salespeople are so product-centric they lead with their information, which invariably invites comparison, confusion, and objections. Ultimately, the best presentation you can give is no presentation at all. Your job is to get information, not give it. Use the information you get from the customer to build a presentation that they are less likely to object to.
Most sales organizations are finding that their value proposition is valueless, because the information they tout--quality, service, reliability, expertise, value and performance--is a mirror image: All of the hard work they do to create a difference actually ends up making them look the same. Unknowingly, they are marginalizing, commoditizing, and denigrating their value. The real value proposition lies with the customer, not the seller. So your most important job is to understand where the value gaps are. What are the costs and consequences of not getting what you have? The sale and the trust are won in the diagnostic phase, not in the solution phase.
Resources--With a CEO mentality you must guard and protect
company resources and only allocate them when appropriate. Most salespeople operate as if their company had infinite resources. They promiscuously quote and bid on deals with little chance of winning, and little consideration of the cost and drain of their company's resources. They involve management's time and energy on deals that don't fit the company's strategy and squander its development costs trying to fit a square peg into a round hole. They freely give samples to anyone who asks. If they had a CEO mentality, they would quickly realize that the company's resources are really their own. Companies' resources (demos, samples, tests, quotes, proposals, technical expertise, and management's time) are leverage points but only as validation and proof steps to move the sale to its completion. It is imperative that these resource be used on well qualified opportunities and at the right time in the selling cycle.
Relationships--People buy from people they like, but more important, from people they trust and believe understand their problems and their unique situation. No longer can you rely on building relationships on personality and shared interests. Today, the only solid business relationship is one built on trust. Clients build trust in direct proportion to your understanding of their problems, your business knowledge, and your ability to help them understand their problems in a way that no other salesperson has. With a CEO mentality you will be much more discriminating as to whom you will spend valuable time building a relationship with. Too often salespeople will build strong, long standing relationships with people who are at the wrong level, who don't have authority to buy. Some salespeople claim that they are great relationship sellers, when in fact they are just professional visitors who bring no business substance to the relationship. They just go where they are liked and are used only as a price check or are thrown an occasional bone.
Relationship sellers are more concerned that people respect them and view them as a business resource. They ask tough questions, and they are willing to walk away from relationships that no longer are mutually profitable. They build relationships wide within an organization so they are never left high and dry when the inevitable day comes when "their guy" leaves. They know when to have serious relationships and casual ones, and they are always open to making adjustments.
Self-Concept--Salespeople consistently perform at a level equal to their belief in their self-worth. To guard and protect this valuable asset they will only work on qualified deals. Instead of spending a lot of time giving quotes they spend a lot of time disqualifying opportunities that don't fit their ideal profile. They know that having a CEO mentality involves taking risks and pushing the envelope and nothing maintains self-concept more effective than risk, change, and learning. They know that you can't be rejected if you don't make an offering. So they sparingly make offers and only do it under optimal conditions for success. They use a selling process that limits failure and preserves their dignity.
A CEO mentality is not only a frame of mind, but also a business sales strategy. Like CEOs, salespeople must have a strong asset management program. The more successful they are at managing their assets, the more successful they will be in selling.
About the Author
Rick Farrell is vice president of Selling Dynamics, a national sales and development training company. He can be reached at firstname.lastname@example.org and at 781-404-7915