This year CMG Partners, an East-coast based marketing strategy firm hosted a panel discussion entitled Why Good Products Fail & How to Improve the Go-to-Market Process. The face-to-face event was complimentary to the local business community in Northern Virginia, and included experts from four enterprises: startup beverage company Honest Tea, National Geographic Channel, WeatherBug, and Intelevision.
Five minutes into CMG’s introductory PowerPoint, a man in the audience named John interrupted the presenter and opined “You’re the experts in marketing strategy, and yet, I don’t hear anything new. You haven’t provided anything we don’t already know!” He continued by reciting the unremarkable bullet points projected on the large screen in the front of the room, and emphasizing that he wanted to hear thought provoking insight worthy of his time. The slack-jawed audience at the McLean Hilton fell so totally silent you could hear a Blackberry hitting the plush carpeted floor.
Faced with this unexpected detractor, the presenter replied with such aplomb that his response belongs in the history books along with Lloyd Bentsen’s legendary debate response to Dan Quayle : “Well John, you get what you pay for!” The widespread laughter that followed was evidence that the tension of the moment had been broken.
The exchange somehow ended amicably, although I don’t think John will receive an e-invitation to CMG’s next event. The panel tried hard to live up to John’s expectations, thanks largely to Mark McNeely, CEO of Intelevision (more about that in a moment). During the post-panel networking, I introduced myself to John and thanked him for voicing an opinion that was probably unspoken by many, including me. “I might not have said it the same way, but I appreciate that you spoke your mind. There have been many times that I’ve wanted to say what you said, but didn’t.”
John might have been similarly moved during the recorded one-hour webinar on social media and selling I listened to on Monday. The topic is of particular interest as I’m completing a series of interviews with salespeople for an article I’m releasing next week. Like CMG’s event, there was a panel of thought leaders with cross-functional expertise—a great blend that should have created pungent discourse. And there were some good ideas that I jotted on my notepad and marked with an asterisk. But a few opinions were so over-worn that I stopped the recording and pushed back the timer a few seconds to make sure I heard them correctly: “We have to be in touch with our customers and understand what’s OK for them and what they expect from us.” And “It’s becoming more critical to know your customer.” Really? I acknowledge these comments are removed from the context of the discussion, but they were as attention-grabbing in the webinar as they are here.
Which leads to a question: are thought leaders fostering a sort of institutional stupidity by being too timid to espouse bold ideas? Or are thought leaders simply reacting to a perception that businesspeople need to be spoon-fed unremarkable ideas (not too big, not too small, not too hot, not too cold) so they can be nudged into considering larger ideas? On the other hand, could executives and managers simply be too intimidated by the multitude forces that are upending their business plans and strategic objectives to consider big ideas?
Mark McNeely might have answered the question when he synthesized the reason for the problems American businesses face: “there’s no oxygen in the room. Companies are run by management that is stagnant, bureaucratic, and self-satisfied.” He predicted that will change—because, if you subscribe to the idea of a Darwinian process for business, it has to.
Resolving our global economic situation demands the creation of provocative ideas. Controversial ideas. Ideas that are unpopular or disagreeable. We don’t need any more Mom and Apple Pie. In marketing and sales, nothing great will happen when well-known truisms are dusted off and passed on as contemporary expertise.
To those who regularly offer contrarian views, keep doing what you’re doing. The world needs your fresh perspectives now more than ever.
Thursday, April 16, 2009
Friday, April 3, 2009
Ready to Sell? Quick--Name Your Prospect's Issue!
Author Michael Korda said “great leaders are almost always great simplifiers who cut through argument, debate, and doubt to offer a solution everyone can understand and remember . . . straightforward but potent messages.”
As the photo illustrates, simplicity alone doesn’t make a message potent. What’s missing? Two crucial factors that Howard Gardner describes in his book Leading Minds: how effectively the scripts are enunciated and how convincingly the deliverers of the communications embody the scripts. On those dimensions, “now serving food” doesn’t demand rigorous analysis.
In marketing and sales, we live and breathe message potency. We have to. Everything we do must nudge, push, or demand a change in one or more entrenched behaviors. So, when it comes to potency, could the intended change be as significant as the message itself?
To answer that, we must address a challenge even more basic than potency: how to select the right issue to address in the first place. From experience, I know it’s hard to get it right. In business, we tout high ROI when our clients want strategic enablement. We push strategic enablement when cost reduction matters most. We communicate about best practice knowledge transfer when the greater issue is how to build communities. We promote social media tools to build communities when a client’s overarching concern is managing profitable growth. Our assumptions leave us in a fog of sometimes-happy ignorance. Most exasperating, our prospective clients usually can’t tell us that we’re attacking the wrong issues because they’re not even aware of our companies or our products!
Happily, every now and then, we find a great example that reminds us that we can connect to visceral issues and make our communications potent—but first we have to understand what the issues are. An advocacy group called Food Democracy Now (FDN) has a mission is to advance “the dialogue on food, family farm, environmental and sustainability issues at the legislative and policy level.” Against a powerful food industry lobby intimate with the complexities of the Farm Bill and the machinations of the National School Lunch Program, Dave Murphy, FDN’s president, faces a daunting challenge. According to a recent article in The Washington Post (“Where Policy Grows," March 25), Mr. Murphy recognizes that it’s not only important to understand the legislation, but to “recast the debate about good food from a moral battle to an economic one. Take the school lunch program, which Congress will review this year. Food activists have long argued that more fruits and vegetables from local producers should be included to help improve childhood nutrition. But Murphy says the better way to sell the idea to legislators is as a new economic engine to sustain small farmers and rural America as a whole (italics, mine). Talk about nutrition and you get a legislator’s attention, he said. ‘But you get his vote when you talk about economic development.’”
Bland? After all, ‘economic development’ lacks originality—many times over. In addition, because righting economic wrongs isn’t FDN’s primary mission, Mr. Murphy could be forgiven for being more pedantic about nutrition, health, and the environment. But he knows that by building an economic frame around his cause that FDN will accomplish more than it could through moral grandstanding. By going after the wrong issue Mr. Murphy would find promoting his cause a much tougher row to hoe (pun intended).
Mr. Murphy’s circumspection about issues applies equally to other marketing challenges with differing complexities. What does finding the right issue mean for achieving a targeted return on invested capital? Sales productivity? Reducing sales risks and shortening sales cycles? Meeting revenue forecasts? Everything. Attacking the wrong problems (or attacking the right problems the wrong way) creates a cascading set of selling failures. When it comes to changing entrenched behaviors, not all issues are created equal. For maximum potency, messages need a highly motivating context, and that means choosing the right issue.
Like FDN, when you find the right one, you can change the world!
Thursday, March 19, 2009
Hold the Trust: A "Trusted Advisor" Who Earns a Sales Commission is Just an Advisor
“We want our salespeople to work as trusted advisors to our clients.”
The VP of sales who shared that idea has a noble vision, and he’s not alone. Building customer trust is inseparably connected to building shareholder value. Not surprisingly, there's great interest: searching the phrase “how to build customer trust” returned 3,890 results on Google. But the VP has a conflict: his sales team is “coin operated,” vernacular for “they earn commissions based on revenue.” Could that undermine the platform of trust that’s core to his strategy? After all, his customers don’t know his company’s sales commission plan, and it’s no secret that clients don't always benefit.
In the US, commission-based arrangements for sales forces come in many flavors and varieties. And they're widespread, according to Barry Trailer of CSO Insights. His company's research found that of companies responding to their 2008 sales compensation survey, 98% included variable pay as part of their compensation plans. I know from personal experience that a commission-earning salesperson walks a fine line as a Trusted Advisor, and there's an ethical morass on either side.
Variable pay by itself doesn’t destroy trust, but the opacity that commonly accompanies it does. The headlines we've read about AIG and Madoff remind us why. In The New York Times, Frank Rich wrote “The question in the aftermath of the Madoff calamity is this: why do we keep ignoring what we learn from the black boxes being retrieved from crash after crash in our economic meltdown? The lesson couldn’t be more elemental. If there’s a mysterious financial model producing miraculous returns, odds are it’s a sham—whether it’s an outright fraud . . . or nominally legal, as is the case with the Wall Street Giants that have fallen this year.” And Republican Richard Shelby of the Senate Banking Committee, quoted in The Wall Street Journal (March 17), said of AIG's widely-condemned bonus payments “There’s been no accountability, no transparency to speak of. . . Whatever we’ve gotten, we’ve had to extract it piece by piece, little by little. There’s too much secrecy.”
Agreed. Secrecy stinks. But Madoff committed deception. AIG . . . didn’t. And in what way do these issues relate to an Account Executive who sells professional IT services to companies in the Midwest? Fair question. There is a connection. Customers think salespeople have something to hide—and that’s a trust breaker. In a March 2, 2009 issue, InformationWeek reported the results from their survey of 345 technology professionals. The participants were asked “if you could get vendors to start doing one thing, what would it be?” Thirty-four percent of the respondents indicated “being up front about how their products do and don’t meet customer requirements.” That was more than twice the percentage for any other response.
In our technology-rich world, it’s humbling to think that good old fashioned honesty exists at the top of the list of customer wants. If only we could easily give our customers what they’re begging for. But for a salesperson with money on the line, “being up front” presents a wide ethical strike zone. And companies use variable pay to influence a myriad of actions, which include the ethical decisions the sales force makes. (Specific ethical dilemmas salespeople face are discussed in an earlier CustomerThink article, "On My Honor As a Salesperson: Why Sales Ethics Matter") Similarly, in my selling past, there were many background situations I didn’t disclose, but they influenced the advice I offered. For brevity, I’ll list just four:
Service plan revenue generated 8% commissions (at the time, the highest percentage category)
Selling direct to customers (versus through a channel partner) credited 40% more revenue toward achieving my sales quota
There was a quarterly bonus of $10,000 for achieving the quarterly revenue goal
Competitive displacements earned higher commission than installed account sales
In March, I decided to investigate this issue in more depth, and through LinkedIn I asked salespeople “Do you think prospective customers should know how much their salesperson might make in commissions and/or bonuses from their purchase transaction?” Although the number of responses received wasn’t large, they supported the idea that for salespeople, such transparency was not needed—with one notable product exception: sales of financial securities. A few nuanced views discussed the importance of disclosing to a customer how much a broker might make selling Security A versus Security B. But why draw a boundary around financial services? Shouldn’t customers of other products and services demand equal levels of transparency from their sales advisors?
Some companies believe so, and in the name of increasing shareholder value, they have adopted a progressive view for creating sales trust and transparency—and been rewarded for the effort. The Wall Street Journal reported on March 16th (Best Buy Confronts Newer Nemesis) that Best Buy CEO-designate Brian Dunn “opposed (Best Buy’s) 1989 decision to do away with commissioned sales in favor of salaried staff, which was widely opposed by sales workers who feared losing income. He now concedes it was the most important shift in company history, lowering worker costs, and changing the core model of electronics retailing. Best Buy expanded across the US, and Circuit City eventually followed by eliminating sales commissions.” To the victor go the spoils. Analysts believe Best Buy will capture half the business of now-defunct archrival Circuit City.
There’s more to that story than just sales commissions, but it’s worth pondering how—for a business as complex and dynamic as electronics retailing—elimination of sales commissions was granted such honored recognition. As one who eschewed buying from high-pressure Circuit City salespeople, I know the decision had as much to do with improving customer experiences as with lowering labor costs. According to Mr. Dunn, “we want our stores to morph into a series of experiences . . . to do that, you need to go where the rubber meets the road, the sales floor.” For Best Buy, eliminating sales commissions makes it easier to foster the transparency required for creating valuable customer relationships.
Outside of electronics retailing, improving customer experiences doesn’t mean eliminating variable pay, but it does mean looking at sales compensation differently. Are the right outcomes rewarded? Does rewarding revenue achievement alone work at cross purposes for maintaining excellence in customer experiences and building loyalty? Does increased transparency matter to customers? When it comes to trust, what changes would be most valued? If transparency is increased, what additional changes would cascade throughout the sales organization? Would those changes be positive for building shareholder value?
Best Buy, which now has a new major competitor in Wal-Mart, has the right perspective on trust, transparency and customer experience. I hope others will follow their example.
The VP of sales who shared that idea has a noble vision, and he’s not alone. Building customer trust is inseparably connected to building shareholder value. Not surprisingly, there's great interest: searching the phrase “how to build customer trust” returned 3,890 results on Google. But the VP has a conflict: his sales team is “coin operated,” vernacular for “they earn commissions based on revenue.” Could that undermine the platform of trust that’s core to his strategy? After all, his customers don’t know his company’s sales commission plan, and it’s no secret that clients don't always benefit.
In the US, commission-based arrangements for sales forces come in many flavors and varieties. And they're widespread, according to Barry Trailer of CSO Insights. His company's research found that of companies responding to their 2008 sales compensation survey, 98% included variable pay as part of their compensation plans. I know from personal experience that a commission-earning salesperson walks a fine line as a Trusted Advisor, and there's an ethical morass on either side.
Variable pay by itself doesn’t destroy trust, but the opacity that commonly accompanies it does. The headlines we've read about AIG and Madoff remind us why. In The New York Times, Frank Rich wrote “The question in the aftermath of the Madoff calamity is this: why do we keep ignoring what we learn from the black boxes being retrieved from crash after crash in our economic meltdown? The lesson couldn’t be more elemental. If there’s a mysterious financial model producing miraculous returns, odds are it’s a sham—whether it’s an outright fraud . . . or nominally legal, as is the case with the Wall Street Giants that have fallen this year.” And Republican Richard Shelby of the Senate Banking Committee, quoted in The Wall Street Journal (March 17), said of AIG's widely-condemned bonus payments “There’s been no accountability, no transparency to speak of. . . Whatever we’ve gotten, we’ve had to extract it piece by piece, little by little. There’s too much secrecy.”
Agreed. Secrecy stinks. But Madoff committed deception. AIG . . . didn’t. And in what way do these issues relate to an Account Executive who sells professional IT services to companies in the Midwest? Fair question. There is a connection. Customers think salespeople have something to hide—and that’s a trust breaker. In a March 2, 2009 issue, InformationWeek reported the results from their survey of 345 technology professionals. The participants were asked “if you could get vendors to start doing one thing, what would it be?” Thirty-four percent of the respondents indicated “being up front about how their products do and don’t meet customer requirements.” That was more than twice the percentage for any other response.
In our technology-rich world, it’s humbling to think that good old fashioned honesty exists at the top of the list of customer wants. If only we could easily give our customers what they’re begging for. But for a salesperson with money on the line, “being up front” presents a wide ethical strike zone. And companies use variable pay to influence a myriad of actions, which include the ethical decisions the sales force makes. (Specific ethical dilemmas salespeople face are discussed in an earlier CustomerThink article, "On My Honor As a Salesperson: Why Sales Ethics Matter") Similarly, in my selling past, there were many background situations I didn’t disclose, but they influenced the advice I offered. For brevity, I’ll list just four:
Service plan revenue generated 8% commissions (at the time, the highest percentage category)
Selling direct to customers (versus through a channel partner) credited 40% more revenue toward achieving my sales quota
There was a quarterly bonus of $10,000 for achieving the quarterly revenue goal
Competitive displacements earned higher commission than installed account sales
In March, I decided to investigate this issue in more depth, and through LinkedIn I asked salespeople “Do you think prospective customers should know how much their salesperson might make in commissions and/or bonuses from their purchase transaction?” Although the number of responses received wasn’t large, they supported the idea that for salespeople, such transparency was not needed—with one notable product exception: sales of financial securities. A few nuanced views discussed the importance of disclosing to a customer how much a broker might make selling Security A versus Security B. But why draw a boundary around financial services? Shouldn’t customers of other products and services demand equal levels of transparency from their sales advisors?
Some companies believe so, and in the name of increasing shareholder value, they have adopted a progressive view for creating sales trust and transparency—and been rewarded for the effort. The Wall Street Journal reported on March 16th (Best Buy Confronts Newer Nemesis) that Best Buy CEO-designate Brian Dunn “opposed (Best Buy’s) 1989 decision to do away with commissioned sales in favor of salaried staff, which was widely opposed by sales workers who feared losing income. He now concedes it was the most important shift in company history, lowering worker costs, and changing the core model of electronics retailing. Best Buy expanded across the US, and Circuit City eventually followed by eliminating sales commissions.” To the victor go the spoils. Analysts believe Best Buy will capture half the business of now-defunct archrival Circuit City.
There’s more to that story than just sales commissions, but it’s worth pondering how—for a business as complex and dynamic as electronics retailing—elimination of sales commissions was granted such honored recognition. As one who eschewed buying from high-pressure Circuit City salespeople, I know the decision had as much to do with improving customer experiences as with lowering labor costs. According to Mr. Dunn, “we want our stores to morph into a series of experiences . . . to do that, you need to go where the rubber meets the road, the sales floor.” For Best Buy, eliminating sales commissions makes it easier to foster the transparency required for creating valuable customer relationships.
Outside of electronics retailing, improving customer experiences doesn’t mean eliminating variable pay, but it does mean looking at sales compensation differently. Are the right outcomes rewarded? Does rewarding revenue achievement alone work at cross purposes for maintaining excellence in customer experiences and building loyalty? Does increased transparency matter to customers? When it comes to trust, what changes would be most valued? If transparency is increased, what additional changes would cascade throughout the sales organization? Would those changes be positive for building shareholder value?
Best Buy, which now has a new major competitor in Wal-Mart, has the right perspective on trust, transparency and customer experience. I hope others will follow their example.
Friday, March 6, 2009
When False Expections Lead to "I Don't Think There's Anybody Back There"
If you’re old enough to remember Wendy’s Where's the Beef? commercial, you’ll recall Clara Peller, the woman on the right of the skeptical customer trio, slipping in one final barb, “I don’t think there’s anybody back there,” as she struggles to peer across an oversized sales counter. I doubt if anyone reading this hasn’t wondered the same thing at least once after clicking “submit” on a customer support web page.
The commercial parodies the frustrations of customers trying to squeeze a plaintive request through a monolithic corporate bureaucracy, and it would be even funnier if it weren’t so true. The ladies’ voices echo off stark, confining walls, ominously distorted by the camera. It’s unclear who they are talking to. There’s no response to their now-iconic question “Where’s the beef?” Dancer Fitzgerald Sample, the ad agency that created the commercial in the early ‘80’s, might have been unintentionally prescient of Voice of Customer (a yet-to-be popularized term at the time) challenges in the age of the Internet.
Technology hasn’t made us any better at hearing customers. But the issue is greater than companies using simple email services and Web 2.0 to craft a “we’re listening to you” image for their customers and prospects. That over worn approach has now become a cliché. It’s about companies taking action when they’re creating the expectation that they are going to take action.
In the last two weeks, I’ve requested support from two companies, CraigsList, and a communications service called DimDim. Both companies offer an online feature that enables a person to send questions and other information from a web page. In both instances, I carefully composed a written explanation of my support question and clicked “Submit.” Then—nothing. It’s more than a coincidence. It’s happened with other companies enough times that when I see Clara trying to peer over that counter, I know exactly how she feels.
What should customers expect? Well, at the very least, to receive a response. In the case of CraigsList and DimDim, an auto response such as “Thank you for your question. Because our support manager decided to take two months off to go mountain biking in the Andes, it might take a week or so to answer your question.” would be better than to hear nothing at all. A few websites offer a great service that requests my phone number online. Within one second after clicking “submit,” my phone rings! Then, an agent gets on the call. At least I know there’s someone on the payroll!
Failure to support breaks trust, and breaking trust is fatal for successfully selling anything. In an era when so many past truths are called into question, the certitude of “no trust, no sale” might even be half comforting.
I don’t care how cool a company’s technology is. When they belly flop on customer support, what message does that send about how they care about their customers? What information do consumers receive about the capabilities of their operations? What do they convey about their ability to provide value in the future? I don’t think there’s anybody back there!
The commercial parodies the frustrations of customers trying to squeeze a plaintive request through a monolithic corporate bureaucracy, and it would be even funnier if it weren’t so true. The ladies’ voices echo off stark, confining walls, ominously distorted by the camera. It’s unclear who they are talking to. There’s no response to their now-iconic question “Where’s the beef?” Dancer Fitzgerald Sample, the ad agency that created the commercial in the early ‘80’s, might have been unintentionally prescient of Voice of Customer (a yet-to-be popularized term at the time) challenges in the age of the Internet.
Technology hasn’t made us any better at hearing customers. But the issue is greater than companies using simple email services and Web 2.0 to craft a “we’re listening to you” image for their customers and prospects. That over worn approach has now become a cliché. It’s about companies taking action when they’re creating the expectation that they are going to take action.
In the last two weeks, I’ve requested support from two companies, CraigsList, and a communications service called DimDim. Both companies offer an online feature that enables a person to send questions and other information from a web page. In both instances, I carefully composed a written explanation of my support question and clicked “Submit.” Then—nothing. It’s more than a coincidence. It’s happened with other companies enough times that when I see Clara trying to peer over that counter, I know exactly how she feels.
What should customers expect? Well, at the very least, to receive a response. In the case of CraigsList and DimDim, an auto response such as “Thank you for your question. Because our support manager decided to take two months off to go mountain biking in the Andes, it might take a week or so to answer your question.” would be better than to hear nothing at all. A few websites offer a great service that requests my phone number online. Within one second after clicking “submit,” my phone rings! Then, an agent gets on the call. At least I know there’s someone on the payroll!
Failure to support breaks trust, and breaking trust is fatal for successfully selling anything. In an era when so many past truths are called into question, the certitude of “no trust, no sale” might even be half comforting.
I don’t care how cool a company’s technology is. When they belly flop on customer support, what message does that send about how they care about their customers? What information do consumers receive about the capabilities of their operations? What do they convey about their ability to provide value in the future? I don’t think there’s anybody back there!
Wednesday, March 4, 2009
What Makes a Social Network Valuable? The Answer Might Surprise You
“What do we know about the networks of high performers? What promotes knowledge worker productivity? What would you do if you could see the networks? What would you do differently?” Rob Cross, author of a new book, Driving Results through Social Networks, shed light on the answers to these questions and others in a webcast I attended on February 19.
These questions are especially important because the answers lead organizations away from practices that worked a year ago, but might not today. For example, if you really want to know how your firm won a new client, what’s the value in knowing that your marketing team began by mining a database? As Mr. Cross shares, “when you look inside teams and see networks that are forming around an idea, you get a totally different perspective about how value is getting built in organizations.” And that perspective offers killer insight for sales teams.
The Social Network Analysis (SNA) tools Mr. Cross describes identify bottlenecks and gaps that hinder customer relationships. They also identify where “value is built out,” and where cross-selling occurs—insights particularly important for large, multi-division global organizations. Adding more Web 2.0 connectivity won’t help. According to Mr. Cross, “we don’t need more calls, meetings, and emails.” The key strategic and tactical changes result from learning where and how organizations need to add social network connectivity, both internally and externally.
Mr. Cross offers a social network taxonomy and fascinating statistics that upend entrenched views about how ideas are created, sold, and implemented. Three types of people hold critical importance:
Central Connectors: Leaders, experts, long-term employees. Central Connectors represent 3% to 5% of the individuals in a company, but account for an astonishing 25% of the value-added ties—relationships that foster the transfer of best practice knowledge, innovation, and revenue. Unfortunately, when it comes to information flow and value exchange, the same people can also create bottlenecks and impediments.
Brokers: The “unsung heroes” of an organization. Brokers drive change through organizations through their cross-division, and cross-department connections. Mr. Cross discovered that a paltry 30% overlap exists between these enablers and the “top talent” that corporate HR departments identify through traditional contribution measures such as revenue achievement. Ignore the insight at your own risk. Many know from painful experience what happens when a company lays off a critical inside resource who was viewed as “overhead.” “We’re sorry about Tom. He just didn’t have the numbers to justify our keeping him on board.”
Peripheral players: As the term connotes, peripheral players have few connections, and 40% are newcomers to their organizations. This issue presents special challenges for distributed sales forces. When new salespeople are brought into an organization, their companies suffer from long periods of low productivity as salespeople assimilate the tacit knowledge required for the job. But as Mr. Cross points out, social network analysis identifies opportunities to more rapidly connect peripheral individuals—and the knowledge [i]they[/i] bring—into their organizations.
So given these archetypes, what [i]do[/i] we know about high performers and their social networks? One thing is clear: bigger is not necessarily better. Through his research Mr. Cross found that high performers
Develop networks that minimize insularity
Maintain balanced ties across organizational lines
Nurture relationships that extend individual expertise
Mr. Cross demonstrated how to identify these individuals through looking at actual network diagrams. In one instance, using just one mouse click, he subtracted them from the network. The remaining people in the network appeared almost free-floating in space, untethered to Central Connectors in other divisions remaining on the screen. Through this representation, the real-world result becomes chillingly apparent: a company that doesn't know its key liasons with its customer community can become virtually isolated if--and when--those individuals leave. Does the possibility that this could happen (slowly [i]or[/i] quickly) keep you up at night?
Advances in Social Network mapping will enable companies to examine collaboration for sales and business development in a new light. What are the strategic opportunities? The risks? The costs? Mr. Cross frequently points out the irony that companies scrutinize routine travel expenses to the penny, but don’t often track collaboration costs such as time spent in meetings—possibly a far more significant expense for many corporations.
Mr. Cross shows that the energy that flows around the creation, development, and implementation of ideas can not only be documented, but that social network analysis yields new ways to model how enterprises create and transfer value. As the state of the art matures, it's exciting to think about how companies will use this insight. Which new strategies, tactics, and processes will result?
These questions are especially important because the answers lead organizations away from practices that worked a year ago, but might not today. For example, if you really want to know how your firm won a new client, what’s the value in knowing that your marketing team began by mining a database? As Mr. Cross shares, “when you look inside teams and see networks that are forming around an idea, you get a totally different perspective about how value is getting built in organizations.” And that perspective offers killer insight for sales teams.
The Social Network Analysis (SNA) tools Mr. Cross describes identify bottlenecks and gaps that hinder customer relationships. They also identify where “value is built out,” and where cross-selling occurs—insights particularly important for large, multi-division global organizations. Adding more Web 2.0 connectivity won’t help. According to Mr. Cross, “we don’t need more calls, meetings, and emails.” The key strategic and tactical changes result from learning where and how organizations need to add social network connectivity, both internally and externally.
Mr. Cross offers a social network taxonomy and fascinating statistics that upend entrenched views about how ideas are created, sold, and implemented. Three types of people hold critical importance:
Central Connectors: Leaders, experts, long-term employees. Central Connectors represent 3% to 5% of the individuals in a company, but account for an astonishing 25% of the value-added ties—relationships that foster the transfer of best practice knowledge, innovation, and revenue. Unfortunately, when it comes to information flow and value exchange, the same people can also create bottlenecks and impediments.
Brokers: The “unsung heroes” of an organization. Brokers drive change through organizations through their cross-division, and cross-department connections. Mr. Cross discovered that a paltry 30% overlap exists between these enablers and the “top talent” that corporate HR departments identify through traditional contribution measures such as revenue achievement. Ignore the insight at your own risk. Many know from painful experience what happens when a company lays off a critical inside resource who was viewed as “overhead.” “We’re sorry about Tom. He just didn’t have the numbers to justify our keeping him on board.”
Peripheral players: As the term connotes, peripheral players have few connections, and 40% are newcomers to their organizations. This issue presents special challenges for distributed sales forces. When new salespeople are brought into an organization, their companies suffer from long periods of low productivity as salespeople assimilate the tacit knowledge required for the job. But as Mr. Cross points out, social network analysis identifies opportunities to more rapidly connect peripheral individuals—and the knowledge [i]they[/i] bring—into their organizations.
So given these archetypes, what [i]do[/i] we know about high performers and their social networks? One thing is clear: bigger is not necessarily better. Through his research Mr. Cross found that high performers
Develop networks that minimize insularity
Maintain balanced ties across organizational lines
Nurture relationships that extend individual expertise
Mr. Cross demonstrated how to identify these individuals through looking at actual network diagrams. In one instance, using just one mouse click, he subtracted them from the network. The remaining people in the network appeared almost free-floating in space, untethered to Central Connectors in other divisions remaining on the screen. Through this representation, the real-world result becomes chillingly apparent: a company that doesn't know its key liasons with its customer community can become virtually isolated if--and when--those individuals leave. Does the possibility that this could happen (slowly [i]or[/i] quickly) keep you up at night?
Advances in Social Network mapping will enable companies to examine collaboration for sales and business development in a new light. What are the strategic opportunities? The risks? The costs? Mr. Cross frequently points out the irony that companies scrutinize routine travel expenses to the penny, but don’t often track collaboration costs such as time spent in meetings—possibly a far more significant expense for many corporations.
Mr. Cross shows that the energy that flows around the creation, development, and implementation of ideas can not only be documented, but that social network analysis yields new ways to model how enterprises create and transfer value. As the state of the art matures, it's exciting to think about how companies will use this insight. Which new strategies, tactics, and processes will result?
Friday, February 6, 2009
Do Salespeople Bug You? Here's Why They Won't Go Away
Search the phrase death of a salesperson on Google, and it will return around 15,000 results. This corruption of the title of Arthur Miller’s iconic play Death of a Salesman has become embedded in blogs and articles worldwide. But as Mark Twain said, “the rumors of my death have been greatly exaggerated.” Unless you live in Cuba, North Korea, Laos, Vietnam or China, sales professionals won’t vanish. Not now. Not soon. Not ever.
Why? In capitalist economies, organizations must acquire customers to survive, and that requires leading change—and leading change requires selling ideas. People malign the art of selling, people diminish its importance, people even wish it away. But whether you’re discussing weight-loss plans or economic reform, minds won’t change without one very human interaction: someone must sell an idea. And we work with idea sellers every day. They’re called Associates, Agents, Account Executives, Senior Solutions Marketing Managers, Directors of Product Management, VP Sales, Senior VP Global Sales and Business Development, Chief Marketing Officers, Customer Account Managers. Add your own title and the list goes on.
In 2006, the U.S. Bureau of Labor Statistics reported that out of 132,600,000 US workers, 10,464,000 were in “Sales and related” jobs—about 8% of the workforce. This number of jobs—sub-classified as retail salespersons, cashiers, sales representatives, and their first-line supervisors—reflects both the diversity and complexity of the selling process. Selling change isn’t easy. And there’s friction because salespeople and customers don’t always get along. Not all salespeople provide value. Not all customers are open-minded. Some products aren’t easy to buy. And when it comes to fair play, no party to a business transaction can claim exclusivity on the ethical high road.
There’s additional upheaval. Foundations of trust shift. Technology and other forces change once-stable commercial relationships. In some sectors, sales jobs are lost—in others, they’re gained. But it’s illogical to interpret recent trends as portents for the eventual demise of the sales professional. Automation and business process reengineering will no more eliminate the need for salespeople than changes in healthcare delivery models will eliminate the need for doctors and nurses.
I’ll take a contrarian position from many hyper-caffeinated emarketing and social media experts: we’re a long way from replacing salespeople with mouse clicks and drop-down menus. When it comes to Great Customer Experience, the automation we’ve created stinks. Proof? We can scale our selling models through information technology, but we still can’t wean ourselves off "human intervention" (oh, come on, Andy, just use the word salespeople!): “To speak to a representative, press zero.” “If you need help selecting a product, just ask one of our retail floor Associates.” “To initiate online chat, click here.” “If you’d like to meet with one of our Sales Representatives, enter your email address.”
Still, the critics complain that salespeople often inject themselves into the buying mix. “We don’t need them,” the critics say. “After all, they’re only thinking about their next commission.” I’ll accept the criticism. As my VP of sales fittingly said “any salesperson who doesn’t add value risks being replaced by a kiosk.” But over 10,000,000 “sales and related” US jobs suggests that buyers also need salespeople.
The critics won’t admit it. “Salespeople are unethical.” “Social media changes everything. We get better information through blogs and online product reviews.” “Let me tell you about my last encounter with a salesman . . .” I’ve held these sentiments myself—and I’m a salesman! But much of the enmity is misplaced. Salespeople are not inherently bad. It’s the culture under which salespeople work that needs overhaul. Customer relationship problems start with people at the top of the organization chart, whose faces aren’t often public. Those executives create business plans that contain financial forecasts that are divided into sales quotas that are measured in revenue that are credited against the salesperson’s “individual goal.” Ready to talk about improving the “customer experience?” You’ve heard it before: It’s the system, stupid!
Maybe what’s needed is a redefinition of sales itself. What does "sales" mean in the context of leading change? After all, isn’t leading change fundamental to every organization’s strategy? Interpretations will be the progenitor of new ways that sellers and buyers connect and relate, new processes, and new best practices.
Perhaps it’s gratuitous for a salesperson to espouse that nothing happens until somebody sells something. But in the non-communist world, I haven’t found a more accurate statement. The sales professional is far from dead.
Why? In capitalist economies, organizations must acquire customers to survive, and that requires leading change—and leading change requires selling ideas. People malign the art of selling, people diminish its importance, people even wish it away. But whether you’re discussing weight-loss plans or economic reform, minds won’t change without one very human interaction: someone must sell an idea. And we work with idea sellers every day. They’re called Associates, Agents, Account Executives, Senior Solutions Marketing Managers, Directors of Product Management, VP Sales, Senior VP Global Sales and Business Development, Chief Marketing Officers, Customer Account Managers. Add your own title and the list goes on.
In 2006, the U.S. Bureau of Labor Statistics reported that out of 132,600,000 US workers, 10,464,000 were in “Sales and related” jobs—about 8% of the workforce. This number of jobs—sub-classified as retail salespersons, cashiers, sales representatives, and their first-line supervisors—reflects both the diversity and complexity of the selling process. Selling change isn’t easy. And there’s friction because salespeople and customers don’t always get along. Not all salespeople provide value. Not all customers are open-minded. Some products aren’t easy to buy. And when it comes to fair play, no party to a business transaction can claim exclusivity on the ethical high road.
There’s additional upheaval. Foundations of trust shift. Technology and other forces change once-stable commercial relationships. In some sectors, sales jobs are lost—in others, they’re gained. But it’s illogical to interpret recent trends as portents for the eventual demise of the sales professional. Automation and business process reengineering will no more eliminate the need for salespeople than changes in healthcare delivery models will eliminate the need for doctors and nurses.
I’ll take a contrarian position from many hyper-caffeinated emarketing and social media experts: we’re a long way from replacing salespeople with mouse clicks and drop-down menus. When it comes to Great Customer Experience, the automation we’ve created stinks. Proof? We can scale our selling models through information technology, but we still can’t wean ourselves off "human intervention" (oh, come on, Andy, just use the word salespeople!): “To speak to a representative, press zero.” “If you need help selecting a product, just ask one of our retail floor Associates.” “To initiate online chat, click here.” “If you’d like to meet with one of our Sales Representatives, enter your email address.”
Still, the critics complain that salespeople often inject themselves into the buying mix. “We don’t need them,” the critics say. “After all, they’re only thinking about their next commission.” I’ll accept the criticism. As my VP of sales fittingly said “any salesperson who doesn’t add value risks being replaced by a kiosk.” But over 10,000,000 “sales and related” US jobs suggests that buyers also need salespeople.
The critics won’t admit it. “Salespeople are unethical.” “Social media changes everything. We get better information through blogs and online product reviews.” “Let me tell you about my last encounter with a salesman . . .” I’ve held these sentiments myself—and I’m a salesman! But much of the enmity is misplaced. Salespeople are not inherently bad. It’s the culture under which salespeople work that needs overhaul. Customer relationship problems start with people at the top of the organization chart, whose faces aren’t often public. Those executives create business plans that contain financial forecasts that are divided into sales quotas that are measured in revenue that are credited against the salesperson’s “individual goal.” Ready to talk about improving the “customer experience?” You’ve heard it before: It’s the system, stupid!
Maybe what’s needed is a redefinition of sales itself. What does "sales" mean in the context of leading change? After all, isn’t leading change fundamental to every organization’s strategy? Interpretations will be the progenitor of new ways that sellers and buyers connect and relate, new processes, and new best practices.
Perhaps it’s gratuitous for a salesperson to espouse that nothing happens until somebody sells something. But in the non-communist world, I haven’t found a more accurate statement. The sales professional is far from dead.
Friday, January 30, 2009
Senior Moment: What Our Elders Can Teach Us About Sales
Yesterday I received a sales letter that hit me like a breath of fresh, un-digitized air. I wanted to share it with my readers:
Dear Friend:
As we enter the new year, conditions are not very good for purchasing new supplies and equipment. However, there are some signs that this may improve as the year progresses.
Your responsibility as a department manager or property manager is to maintain your facilities in the best possible manner. I have three things to offer:
Excellent products
Good service
Fair prices
If the need arises this year for you to replace or add to your equipment, please don’t hesitate to give me a call. I will be happy to furnish you catalogs and written quotations for your consideration.
Sincerely,
My friend Stanley’s name follows below his hand-written signature.
Three paragraphs, two sentences each. There’s purity of form and a sincerity that rarely emanates from today’s marketing communications.
Stanley began his sales career before most of us were born, and he hopes to achieve the milestone of entering his ninth decade this year. He’s a retired CEO who is passionate about selling. He’s never stopped. When he started working, ‘personal selling’ meant . . . personal selling. Telephones, “snail mail,” and cars were the tools of the sales trade. Most of all, face-to-face dialogs created the trusted bonds between buyer and seller, and were an inextricable part of the sales process. Little wonder that Stanley’s letter says “I care” so clearly, without using those two words. He perfected that skill in the trenches, by looking at his customer in the eye.
In our Twittered, Blogged, and Web 2.0’d sales world, Stanley’s selling talent has become rare. The forces of information technology, product commoditization, and cost reduction have pushed legions of salespeople from the prospect’s office to the deep innards of the call-center cube farm. Millions must make their quotas using far more sophisticated tools than Stanley had—but without ever physically shaking hands with a customer.
As Stanley approaches his 80th birthday, he has become rare in other ways as well. He’s part of a shrinking population that will all but vanish in twenty years: a self-selected group of senior citizens that choose not to use a computer. He doesn’t use email or a have website for his company. He puts up with my e-marketing hubris when I rib him about not being able to accept orders online (FAX and phone work fine for him). The few times he needs Internet access, he taps an eager pool of knowledgeable grandchildren. It would be easy to dismiss his knowledge as outdated.
But the wisdom contained in his letter reminds me that when it comes to selling, seniors have a wealth of knowledge for the rest of us. Stanley has taught me how courtesy, respect, and sincerity have great power in sales. I wish Stanley many more great years in selling. I still have much to learn from him.
Dear Friend:
As we enter the new year, conditions are not very good for purchasing new supplies and equipment. However, there are some signs that this may improve as the year progresses.
Your responsibility as a department manager or property manager is to maintain your facilities in the best possible manner. I have three things to offer:
Excellent products
Good service
Fair prices
If the need arises this year for you to replace or add to your equipment, please don’t hesitate to give me a call. I will be happy to furnish you catalogs and written quotations for your consideration.
Sincerely,
My friend Stanley’s name follows below his hand-written signature.
Three paragraphs, two sentences each. There’s purity of form and a sincerity that rarely emanates from today’s marketing communications.
Stanley began his sales career before most of us were born, and he hopes to achieve the milestone of entering his ninth decade this year. He’s a retired CEO who is passionate about selling. He’s never stopped. When he started working, ‘personal selling’ meant . . . personal selling. Telephones, “snail mail,” and cars were the tools of the sales trade. Most of all, face-to-face dialogs created the trusted bonds between buyer and seller, and were an inextricable part of the sales process. Little wonder that Stanley’s letter says “I care” so clearly, without using those two words. He perfected that skill in the trenches, by looking at his customer in the eye.
In our Twittered, Blogged, and Web 2.0’d sales world, Stanley’s selling talent has become rare. The forces of information technology, product commoditization, and cost reduction have pushed legions of salespeople from the prospect’s office to the deep innards of the call-center cube farm. Millions must make their quotas using far more sophisticated tools than Stanley had—but without ever physically shaking hands with a customer.
As Stanley approaches his 80th birthday, he has become rare in other ways as well. He’s part of a shrinking population that will all but vanish in twenty years: a self-selected group of senior citizens that choose not to use a computer. He doesn’t use email or a have website for his company. He puts up with my e-marketing hubris when I rib him about not being able to accept orders online (FAX and phone work fine for him). The few times he needs Internet access, he taps an eager pool of knowledgeable grandchildren. It would be easy to dismiss his knowledge as outdated.
But the wisdom contained in his letter reminds me that when it comes to selling, seniors have a wealth of knowledge for the rest of us. Stanley has taught me how courtesy, respect, and sincerity have great power in sales. I wish Stanley many more great years in selling. I still have much to learn from him.
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