Category Archives: Sales

How To Sell Like Apple

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I’m not sure why but everywhere I go these days I seem to hear some version of the same question, “How can our company become more like Apple?” Then I ran across this article by Steve Tobak in his BNET BLOG “The Corner Office” and I thought “well it must be a sign from God”. So here’s his take how you too can become more like Apple (at least when it comes to sales).

“From its direct and channel pricing strategy to its retail and online storefronts, Apple sells its products like no other company in the consumer electronics space. If you know “the channel,” you know this is by no means an easy trick. And it works, big-time. But it does raise two interesting questions.

First, can other companies “sell like Apple,” or is Apple’s sales and channel strategy unique to Apple? And second, is it permanent, or will Apple eventually lose control over its positioning, pricing, and channel?
Let’s find out. First, here’s what makes Apple’s sales and channel strategy unique:

Apple never discounts through its direct channel. It does discount refurbished products and, of course, there are price changes, but there’s no “sale” pricing, say on a holiday, for example.
Apple keeps reseller pricing stable. While it’s illegal to set dealer pricing (to its customers), Apple still manages to keep retail pricing remarkably stable. It probably does that by keeping dealer margins slim, offering no volume discounts, and keeping terms consistent between resellers of the same product.
Apple’s retail and online storefronts are unique. They’re more about education and support than selling. They’re simple, even austere, with minimal signage and crystal clear messaging. The pervasive feeling is that lots of folks are there to help you and nobody is there to sell you anything.
Apple products are positioned as unique categories. To the extent that it’s feasible, Apple likes resellers to sell its products as unique categories, as opposed to side-by-side next to competitors, either on storefront shelves or online. For example, Best Buy online has a section called “iPad and Tablet PCs.” They’re distinct and separate.
Now, the strategy of positioning a product as unique relative to competitors and maintaining tight channel control and pricing to manage that positioning is nothing new. In fact, it’s sort of the holy grail of selling.

Loads of companies have tried to do it with various products and with varying degrees of success, including Intel processors, Microsoft software, Tiffany jewelry, Swarovski crystal, Dyson vacuums, and certain “premier” manufacturers of everything from wine and watches to guns and knife sharpening systems.

In every case, it really comes down to the same five factors that enable that holy grail of sales strategy:

1.Perceived or real high demand and limited supply
2.Unique and superior value proposition or brand perception
3.Perceived or real monopoly
4.High enough margins to support a robust channel support infrastructure
5.Clear, top-down sales / channel strategy and disciplined execution
Having said all that, the practical matter of maintaining the practice over an extended period of time is almost impossible. Sooner or later, it breaks down. Sooner or later, things change. It could be a change in the competitive landscape, intellectual property protection ends, a new widget or innovation comes along, societal trends change, or even changes in government regulations. Sometimes, the company itself is willing to break its discipline to accelerate growth at the expense of profit margins.

The bottom line is it can be done, given certain factors. And those factors change over time.”

Courtesy of BNET.

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Sales as a Conversation

I’ve been saying for some time  that sales is turning into a more of a “conversation” than a “sales pitch”.     The days of the old “sales pitch” that captured someone’s attention and compeled them to buy has gone by.  In it’s place, we’re being forced to carry on a “conversation” about our products over time (and multiple mediums).

Think about it.  If someone sees your ad and they’re interested in knowing more, they go to the Internet and check you out.  They read reviews (both from consumers and consumer publications).  They compare prices.  And then, finally, they come in to “try and buy”.

That ties into this interesting article written by Sean Silverthorne in the blog “The View From Harvard Business” (courtesy of BNET).

“When I walk into an Apple retail store, I get the feeling that I am on my own to explore, touch, lift, try and compare. Sure, I can get help if I want it. But what the store is designed to do is get people engaged with the product directly.

MIT’s Michael Schrage calls this a “selling themselves” strategy, opposed to the “sell to” approach we get when we listen to a sales pitch.

“I’d argue that the future of salesmanship and innovation alike will increasingly depend on giving people easier ways of selling themselves on whatever it is you’re selling,” Schrage writes. “It’s not enough to be persuasive; you’ve got to make it easier for people to persuade themselves.”

Even professional service firms should adopt this approach, Schrage argues on his HBR.org post, Let Your Customers Persuade Themselves. A PSF would be well advised to ask the question, “What can we give away to entice prospects into a serious conversation about becoming a client?”

It’s all a matter of degree, I think. Some people are uncomfortable trying on a new technology or law firm without some guidance and context, which comes in the form of a quick sales pitch.

Schrage admits he doesn’t like being sold to. I don’t mind it at all, as long as the sales person is listening to what I want, a point sales guru Tom Hopkins makes in this nice interview with my BNET colleague Geoffrey James.

So at the end of the day, your best bet is to understand how your own customers want to be approached, and be ready to mix and match tactics to help them make a decision.

From your experience, what company really gets it in terms of a compelling sales experience? Who gets the balance right?”

To Sell More, Scare Your Customers

bigstockphoto_Horrified_Businessman_2799199Here’s a new idea: to increase sales, scare the living bejezzus out of your customers.  According to high tech guru Geoffrey Moore, some B2B vendors are motivating customers to buy (even during hard times) by identifying something that terrifies them and then developing a sales pitch that explains the horror in an insightful, actionable way.

Sound crazy? Yup. But according to Moore, this weird technique actually works. He cites the example of the software vendor Sybase, which was able throughout the summer of 2008 to pry business out of financial services clients, even as their industry was beginning to implode.

Rather than probing for what those clients thought they might need, Sybase reps pointed out the impending disaster likely to result from an industry-wide failure to manage risk.  By explaining the scale of the threat in all its gory details, Sybase was able to sell its Risk Analytics Platform, a tool for integrating risk management.

Moore calls this method “provocation-based selling.” The key, according to him, is to develop a pitch that doesn’t align with the customer’s outlook, and doesn’t identify and respond to the customer’s proverbial “pain points.”  Instead, you must provide a new angle on the situation by outlining a problem the customer hasn’t yet put a name to.

Of course, this only works if you’ve got the credibility and personality that inspires confidence in a crisis.  And you’ve got to be careful how you play this card.  You can’t just stand up and blast your pitch to all and sundry, or you’ll only harden the cognitive dissonance.

Instead, you’ve got to pitch the story to a carefully chosen line executive in one crucial meeting.  You’ll also need incontrovertible proof that the problem is real, with evidence that proves that you’ve got a firm handle on the problem’s scope and depth. You’ll also need a short diagnostic study that maps the horror onto the prospect firm’s own financials.

The game plan?  Once you’ve scared the living daylights out of the key executive, you help that executive save the company by selling your offering as preventative to the impending disaster.

The advantage of framing the sale this way is that the immediacy of the threat creates a readiness to listen, while the diagnostic study helps convert the dialogue into an actual contract.

There are two disadvantages, though.  First, it can take considerable time and effort to develop a credible pitch with all the relevant evidence and proof points.

Second, and more importantly, if you’re not careful, you can scare the exec so badly that you’ll get a “deer in the headlights” rather than a motivated customer.

Courtesy of BNET (Don’t Blame Me!)

How to Squash “Your Price is Too High” Objection

Ran across this video on You Tube and thought it made some powerful points.

1.  If someone says “your price is too high” act startled and say “why?” Then you can get them to state their REAL objection (like “I just don’t think it’s worth that much” or “I saw it somewhere else cheaper”).

2.  Then, you RESTATE the objection in terms you can address.  “Well, let me make sure we’re not comparing two different things…here’s what our product does and why it’s more expensive”.

3.  Then GO FOR AN IMMEDIATE CLOSE.  If that really was their only objection, then maybe they’ll buy!  And you won’t “talk yourself out of a sale” by covering unnecessary ground.

But quite often “price” is simply an excuse.  It means a) you didn’t really sell them on the value of your product  or b) they aren’t really in the market right now or c) they just don’t have the money.

4) But whatever you do, SHUT UP & FORCE THEM TO TALK.  Once you go for a close, the next person who speaks loses!  As this video says, once you handle an objection, you either close the sale or force them to tell you why they won’t buy.  In the back and forth process of selling, you make it clear it’s THEIR TURN TO TALK.

Some obvious points, but well worth repeating.  Try it!  And tell me if it works…

Courtesy of BNET and www.NationalSalesCenter.com

Why Sales Quotas Can Lower Revenue

What would happen if you got rid of your sales staff’s quotas? Would they slack off and make your profitability plummet?

According to new research from the Stanford Graduate School of Business, the opposite very well may happen: eliminating quotas can provide a means of boosting your profits.

Quotas are generally seen as a way to encourage and pay off employees who work the hardest, but researchers Harikesh Nair, a Stanford GSB associate marketing professor, and Sanjog Misra of the University of Rochester found that quotas can actually encourage employees to make fewer sales. Nair explained how in a Stanford press release:

Those who have already made the quota in a current compensation cycle may have an incentive to postpone additional sales. Alternatively, those who perceive they have no chance of making the quota in the current cycle have a perverse incentive to postpone their effort to the next cycle.

In their research, Nair and Misra worked with a Fortune 500 company developing an alternative compensation system, which eliminated quotas. The result of the new system was an approximate increase of $1 million a month in incremental revenues.

Of course, one company’s success with eliminating quotas shouldn’t be taken as a condemnation of the entire system, which may work very well for some companies.

“What managers need to do is evaluate more carefully how the [quota] system is functioning for their own organization,” Nair suggests. He advises managers to analyze employees’ behavioral patterns regarding the compensation system, and to look at sales data over time to see how employee output changed when different quotas or incentives were introduced. This can give managers an idea of whether quotas are helping or doing more harm than good.

Courtesy of BNET Back To B-School.

Cold Calling Dos and Don’ts – RainToday

Here is an interesting podcast I came across. Courtesy of Rainmaker.com.
Cold Calling Dos and Don’ts – RainToday

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How to Market Luxury in a Downturn

Harvard logoOne of the best-known academic minds in marketing is John Quelch, a 30-year veteran of Harvard Business School and one of 10 marketing experts profiled in the 2007 book Conversations With Marketing Masters, by Laura Mazur and Louella Miles. Quelch’s own co-authored book, Greater Good: How Good Marketing Makes for Better Democracy, points out that marketing serves a higher purpose in society than simply moving products. Quelch writes the Marketing Know How blog for Harvard Business. Here he talks to BNET about the two types of luxury consumers and how to hang onto them in a recession.

BNET: You’ve said there are two types of luxury consumers. What are they?

QUELCH: I divide the luxury market into “must-haves” and “wannabes.” Members of the first group have incorporated luxury into their lives and seek to retain that lifestyle in the face of recession. Very high net worth individuals occupy the top rung of the must-haves. They are largely inoculated from the downturn. Even if they’ve lost a lot of money in the recession, they are still ultrarich. On the other hand, those must-haves who have become financially strapped are now buying luxury items at lower price points or buying them less often, but never compromising on quality.

The luxury wannabes view luxury aspirationally, occasionally investing in luxury purchases in order to touch luxury without immersing themselves in it. They would never buy (or probably would never be able to buy) a Ralph Lauren suit. But they can afford a few lower-cost accessories such as a polo shirt with the logo.

BNET: How do marketers hold on to these customers in this economy?

QUELCH: You have to figure out how your customers’ behavior has shifted. Can you enable your more price-sensitive customers to continue to patronize you? It’s a balancing act, because you don’t want to taint the image of the brand.

This is more challenging at a time when cash-strapped companies are reducing spending on market research that could help them learn just how to reach those customers. Most large companies in the U.S. are cutting their research budgets by 10 percent to 20 percent. To adjust to this shift, I urge marketers to focus their research on the products, brand, and markets that are key to their strategy. Don’t waste resources on peripheral or potential consumers.

BNET: Should you consider discounting? Or is that always a bad idea for luxury brands?

QUELCH: Of course, discounts, if overdone, can detract from brand quality and the credibility of retail list prices. But modest, often unadvertised discounts on selected or discontinued items need not dilute brand quality. In fact, during a recession, even some luxury must-haves are hurting and need a helping hand in the form of a price cut from their favored brands.

BNET: You’ve described a new kind of consumer as being a “Simplifier.” What does that mean?

QUELCH: Simplifiers predated the recession, but the recession has accelerated the trend. These are people who trade down to a simpler lifestyle than they are able to afford. In particular, they seek to reduce the scope and scale of the stuff they own, because they simply find it too aggravating to maintain and less emotionally satisfying than they expected. Often, as they grow older, they place more value on — and invest more money in — experiences instead of possessions.

Courtesy of BNET.