Sales is a profession worth investing a lifetime in. Sales is a link between strategy and frontline execution. Transformation requires a complete mindset change.
In 1879 a first book about selling was issued – How ‘Tis Done. In 1966 Knowledge Era starts. In 1970s CRM starts.
History of sales
Globalization could be sources to the 1st and 2nd centuries BC and attributed to Zhang Quian, a gentleman of the court of Emperor Wu of the Han Dynasty. Zheng Qian traveled around and was able to sell a vision with multiple stakeholders with a set of ethics that was respected even by his enemies. Zhin Quian is credited with the initiation of the Silk Road. But Maritime Silk Route was work of Zheng He. He led the world’s largest ocean-going fleet in seven epic and peaceful trade voyagers to the West. Zheng expeditions laid foundations of the wealth and cultural success of the great Ming Dynasty.
Few in the academic world understand selling. Sales, as defined as act of buying and selling goods or trading of goods between two parties or bartering goods, actually predates marketing.
Sales psychology and the pressure of time
The earliest days of trading consisted of bartering as well as exchanging goods for currency. Battering without a formal currency is not an exact science. Thus, the value chain of production and sales has its roots in the most ancient of civilizations.
New selling paradigm
Julian Birkinshaw’s thought-provoking framework. He argues that each era requires a different source of competitive advantage and that each era always has a beginning and an end. He refers to the last 100 years of economic development in three eras. The first is the industrial era (late 19th century to the 1960s). Knowledge era started in the 1960s. Now we are in the post-knowledge era.
In industrial era a company’s ability to achieve a good return on capital was through organization efficiency, often through improved processes. It was a seller-controlled era. Time of selling features, advantages and benefits.
The term knowledge worker was first coined by Peter Drucker in his book The Age of Discontinuity. Birkinshaw uses the word meritocracy to describe a key trait of the knowledge era. Control has now firmly moved from the seller to the buyer. In the knowledge era, the seller enters the sales cycle 57 per cent of the way through, much of the qualification stage having already been concluded by the buyer.
If the knowledge is competitive advantage, a salesperson should use unique insights, data and intelligence to provoke conversation with customers.
CRM spend rising from just over 2 billion USD to 3.8 billion USD and sales training cost from 1.8 billion USD to 2 billion USD from 2006-2013. Lear to order ratio reduced from 3.5 per cent to 2 per cent.
In post-knowledge era competitive advantages according to Birkinshaw are adhocracy and emocracy. Agility becomes the new norm in the adhocracy era. If we don’t adapt quickly, customers will just walk away.
Sales cycles are reduced and we can talk much more about consensus-driven decision-making process in sales transactions. We can also talk about co-creation era. Trust is foundational, but relying on trusted relationship alone is simply not enough. It is authenticity and relevance of purpose that are so attractive to customers. If we talk about Robin Dunbar circle of trust, we can form meaningful relationships with 150 people. 5 are the most inner circle, 15 is next circle, 50 next and then 150. Since relationships are important, people we work with are very important.
Selling based on values
95 per cent of salespeople are a complete waste of time.
So, what to look at, when looking for good salespeople.
Three important elements plus support are mentioned bellow:
- Competencies: Customer (leveraging company assets, cross-cultural communication, managing virtual teams, aligning multi-level relationships) and company-facing skills (proactive innovation, listening beyond product needs, consultative problem-solving, financial value selling).
- Attributes: Resiliency.
- Methods and processes: Sales project management, data acquisition and knowledge management.
- Support infrastructure: Remuneration and internal processes.
Two models for understanding salespeople’ performance have been used quite extensively since the late 1970’s. These are defined as adaptive selling and customer-oriented selling. The adaptive model emerged from research conducted by Weitz in 1978. Salespeople adapt their approach based on what they discover in the sales process. The concept of customer-oriented selling was developed by Saxe and Weitz in 1982. Sales orientation-customer orientation (SOCO). The model was developed through interview with salespeople, not with customers. Main findings of research in this field were that more ethical that company and salespeople were the more customer oriented their sales was.
Swenson and Herche in 1994 were looking for connection between social values and salesperson’s performance.
Some popular books on selling are:
- SPIN Selling from Neil Rackham in 1988. Focus on the opening qualification questions: S(ituation question), P(roblem question), I(mplication question) and N(eed-payoff question).
- Solution Selling from Bosworth
- Outsell your competition by Robin Fielder in 2002. People buy using their buying pattern not our sales pattern.
- Customer-Centric Selling by Bosworth and Holland in 2004
- Consultative Selling by Hanan in 1999. He is focusing on how to articulate the economic value of your product or service. A sale is a transfer of value: a customer’s resources – time, talent and money are transferred for the contribution to customer profits made by supplier’s products or services.
- Bag the Elephant: How to win and keep big customer by Steve Kaplan in 2005. Factor to do it include: one and done, priority one, be flexible, long-term vision, having fun and making partnership with customers. Different types of salespersons he defined are: the Sage – caution and highly knowledgeable and trusting; Pals – relationship and friendliness; Pit Bulls – focused on bottom line, being competitive and profit-driven.
- Buyer Approved Selling by Schell in 2003. It is about effective communication, building trust and respecting time.
- Challenger Sale
- Golden Circle Services by Ben and Dale Midgley in 2005. They are talking about NLP, authenticity and trust that should be earned over time.
- Values Sell by Thompson and Soper in 2007. Focus on being socially responsible.
- Values Based Selling: The art of building high trust client relationship by Bachrach in 1998. Two most important elements of success are emotional involvement and trust. Focus of the book is on BTC.
So how do salespeople sell in a way customers want? Professor Jean McNiff believes that it is not competence or logic that determines what we do or how we behave, it’s our values and belief systems that determine how we act and also how we interpret data.
It is also about social practices. Lived values are sustaining practices – they are absorbed by assimilation, by habits that are forms.
The link between behaviours, competence and values/mindsets in the context of transformation is well explained by Professor Fred Korthagen. Korthagen argues that only a total alignment of our core, our identity, our mission, our beliefs, our competencies and our behaviours with the environment will result in transformational change.
- The core relates to a person’s essence.
- Purpose relates to one’s reason for existence.
- Values and beliefs are influenced by what we are thought when we are your and through the results of our own experiences.
- Competences describe what you are able to do in the world.
- Behaviour relates to the verbal and non-verbal communication that takes place.
- Environment relates to the market context in which an organization operates.
Most trainings focus on behaviour. If all we focus on is behaviour, we miss values. Could the disconnect between buyer and seller be a values misalignment rather than a behaviour issue? No one is born with a set of values. Values are developed as a consequence of the social environment in which we are brought up. The current competency bias and the focus on sales methodology are not an answer on how to improve sales. We should be focusing on values.
Values creating positive and negative selling experience
Howard Gardner theory is talking about multiple intelligences. His book Five Minds for the Future is talking about how words minds and values can be used interchangeably.
Negative values/mindsets:
- Manipulative – customer being over-sold and under-delivered. When somebody promises you everything in the world, you will probably get 10 % of that everything.
- Supplier-centricity – the self-centered salesperson filters data that they want to hear.
- Complacency – is observed when there is a perceived lack of investment (of time) in a customer.
- Overt arrogance – there is such a fine line between being confident and being arrogant.
Positive values/mindsets:
- Authenticity – being transparent and acting with integrity, being honest and ethical.
- Client-centricity – it is not just about customer, it’s their entire ecosystem, including partners, suppliers, customers and competitors.
- Proactive creativity – it requires more strategic thinker, being one step ahead and coming up with ideas that the customer has not though about before.
- Tactful audacity – this is the art of knowing how far to go without going too far. Tact is a key. Emotional intelligence coupled with the courage. No one likes to be challenged inappropriately.
The connection between values and predictability (customer understand your values and vice versa) and the relationship becomes more trusting, more predictable.
Living the first two values/mindsets of authenticity and client-centricity is the baseline for building a trusting relationship. But to earn the right to be in a winner’s circle, customer will want to see proactive creativity and tactful audacity. At least that what authors believed, before going deeply into question which is more important mindset or method.
Values and trust
At what point in the sales cycle the values are important? Doing research – client-centricity, being authentic even in cold contact, is always an option. At some point you will probably need to use tactful audacity to move conversation to another level. In LinkedIn this could be done after five messages.
Plan your objectives for the meeting and send and discuss agendas in advance, as collaboration is key to being customer-centric.
Three types of sales conversations that lead to a sale:
- Supplying a need: a customer has identified a requirement. The customer selects your solution.
- Shaping a need: a customer has identified a requirement; they are not too sure what the specification is to fulfil that requirement. They select you as supplier.
- Creating a need: a customer does not recognize they have a need. They are looking for a partner that can act proactively and discover a need and propose a solution.
It is the third type that requires the most skill and where those in the winner circle will have the most advantage.
Other stages of sales cycle require proactive creativity in product/solution discussion, handling objection also require some proactive creativity and tactful audacity. Tactful audacity also helps in getting commitment.
We should also be aware that buying cycle starts well before buyers talk to a sales-person. Given the shorten timeline, the four mindsets are critical.
Research into key account programs has generally fallen into organizational and relational streams.
While trust is considered a key success factor for both supplier and customer, Abratt and Kelly suggest that what constitutes trust is different between suppliers and customers. Customers view trust as not breaking a contract; suppliers view trust as the sharing of information.
Raimondo argues that without universal framework for defining what constitutes trust, there is a lack of completely satisfying and widely agreed models and methods of organization, suitable for the evaluation of trust in market (read sales) relationships and its process of generation and growth over time.
Andaleeb talks about the highest form of trust as bonded trust. It is created by someone who has positive motive and high ability.
Relationships are critical when buyer has a choice. Is there a difference between being trusted or being entrusted? So, what ability brings you entrustment? It is a quality in a person that makes an action possible, it goes beyond the knowledge and skills that someone may possess to how that person thinks and connects, be it data, intelligence and/or relationship. This ability is particularly relevant in our VUCA world, where the world is changing so fast that people cannot be expected to necessarily have the knowledge, but can be expected to have the capacity to know where to get the knowledge if so required and the mental capacity to connect the dots. This is rarely seen capability according to customers we have interviewed.
Many salespeople fell into the sales profession accidently.
The value of authenticity
Authenticity means the quality of being real or true. Judging whether or not someone can be trusted is not a precise science and much relies on intuition. Buyer’s perception is their reality. What customers will observe is behaviour and behaviour are just the tip of the iceberg. Values lie hidden. We have personal and work values.
Critical reflection is absolutely one of the most important competence of salesperson. The skills of critical reflection are helpful in solving problems or diagnosis and in that sense this skill is of real value to customers. Critical reflection is important in this fast-changing world in which we live. Critical reflection is a reasoning process and it takes into account what happened before, during and after an experience. Gibbs reflective cycle is:
- Description – what happened.
- Feelings/thoughts – thinking, felling.
- Evaluation – what was good/bad.
- Analysis – what sense can you make of it.
- Conclusion – what else could you have done.
- Action plan – what would you do next time.
Your values become your guide and as such govern your personal practice. Some values that customers appreciate are: courage, justice, fairness, authenticity, passion, tenacity and resilience, loyalty and client-centricity.
The value of client-centricity
Client-centricity requires curiosity, interest, passion to do the right thing for the client, going the extra mile to find out more, going the extra mile to leverage more value to the customer, demonstrating non-autobiographical listening skills.
Knowing customer industry is important. Having a level of industry knowledge can help generate priceless insights that can lead to making significant contributions to winning value propositions. Account teams, according to Henesses and Jeannet need to learn their client’s requirements for success in their specific industry. They need to “crack the code” of the industry.
Cracking the code is one tool for customer centricity. The industry code is behaviour required from an organization to assure long-term success. The code needs to contain a collection of “musts” – things that a company must do. These are different from core competencies, which just describe what a company does well. There are also key success factors (KSF). They can be categorized in: qualifiers – able to play in industry and differentiators – what sets them apart from others. All industry participants must comply with the qualifiers, but only some may perform on differentiators.
Customer pulse check is another tool. It is based on the European Foundation for Quality Management (EFQM). It is based on following seven pillars: driving performance and transformation; stakeholder perceptions; leadership strategy and constancy of purpose; strategic operational performance; organizational culture and leadership; stakeholder engagement and creating sustainable value.
The most important transformation should be from a product-centric to a client-centric culture. One example of this process had those stages: listen to the voice of the customers; develop appropriate KPIs; ensuring everyone has the appropriate tools, skills and coaching support, setting up a project team and adopt a change management approach, changing the organizations beliefs.
Kotter model that can be used as framework for cultural change:
- Create urgency
- Form a coalition in management
- Create a vision for change
- Communicate a vision for change
- Remove obstacles and create some short-term wins
- Built on the change
- Anchored the change
In sales transformative changes can build on: challenging our knowledge of our customers business, focusing on customers experience and focusing on customer’s customer.
The value of proactive creativity
Tool three that can be used is the third place from supplier perspective. The Summit Value Group, a sales consultancy group based in the USA coined the term 3rd Box Thinking. The third box relates to the customer’s customer, the second box the customer and the first box the supplier. The biggest blocker to creative thinking is the way salespeople traditionally approach sales opportunities. They start their thought process in the wrong place, the first box. Traditional though process is: what do we have that could help us create the best competitive offer. But it is about value that customer wants to create to their customers. We should look for their metrics. When we know that, then we look at what we have, that can help create that value. We should also consider all intangibles.
A supplier-centric bias can be avoided by doing the following:
- Focus first on the you – think customer’s customer first.
- Focus next on the us – think what it is we have that can impact what the customer cares about.
- Focus then on the connect – consider how the ideas above connect what your customers care about.
- Finally consider the evidence – how will you articulate your value proposition and what evidence can you show that reduces the risk of your proposal.
The fourth tool can be customer strategy grid. It is adapted from the nine-box model.
- Customer objectives
- Customer strengths
- Customer weakness
- Customer opportunities
- Customer threats
- Attacking strategies (opportunities and strengths)
- Daring strategies (opportunities and weaknesses)
- Crushing strategies (threats and strengths)
- Protecting strategies (threats and weaknesses)
We basically can put all of the above into: company objectives, company capacities and company environment.
Tool five can be whitespace analysis. It is a process that considers the overall spend a customer may have and invites the salesperson to consider what the addressable market is. Sometimes you can get into conversation like this, when a salesperson starts with you are our largest customer and he/she get a reply: “We may be very large to you, but in overall spend you are not that important to us.”
Some helpful questions are:
- What is the total market spend?
- What is our customer’s spend with us?
- What is the addressable market?
- Size of the prize: what would be a stretch goal for the account?
There is a big difference in coming up with an idea as opposed to executing on the idea.
The value of tactful audacity
Tactful audacity is very difficult if parties are not known to each other. Passion and inspiration are two fundamental attributes for tactful audacity.
When we look at our solution, we can use the solution development framework. We look at what assets do we have, how easy is it for us to leverage these assets, what values does this asset bring to the customer and then to us and how unique is this solution. The usage of the solution value grid is very helpful when brainstorming multiple components of a final solution and their relevance.
Equation is: solution components – feasibility x value to customer + value to us = result
And additional factor is uniqueness.
In some complex bids, where the solution components are many, it’s useful to consider grouping the components under “win themes”. These win themes help when articulating the final value proposition.
Summary and role of leadership in transforming sales
There is nothing like a crisis to get the creative thinking process flowing. Salespeople often say that selling internally is more difficult than selling externally. The “time” dimension is hugely significant in defining what happens in the sales process.
A significant high percentage of salespeople miss quota, somewhere between 40 and 80 percentage.
For great managers four mindsets are crucial:
- Vision – they should have vision for their team, ideally a purpose-driven vision that goes beyond just hitting the numbers.
- Desire to be the best
- Empowerment – providing the psychological safety for salespeople to thrive.
- Potential – look for potential of your people.
The ability to work with ambiguity is now the predominant trait required of CEOs.
Sales management systems typically involve three dimensions to manage sales performance depending on their level of sophistication:
- Results – the what
- Activities – the how
- Resources and competencies – the who
Authors refer to those sales managers who implement a result-and-activity-based sales management systems as “managing by hope”. Those who implement a results, activity and personal development-based system are called “managing by objectives”.
Sales management system by Jordan and Vazzana in their Cracking the Sales Management Code:
- Leadership mindset
- Vision
- Set results and objectives
- Individual expectations
- Team cadence
- Coach for performance
- Hold accountability
It is critical to understand the difference between change and transformation. Not all change is transformational. Transformational change has unique characteristics:
- It is sustainable.
- It has profound impact.
- It is not predictable.
- It involves shift in perspective/frame of reference.
- It involves a change both in mind and heart.
- It is life-changing.
Understanding whether or not we need to be a transformational or transactional sales manager requires an accurate understanding of the problem/challenge to be solved.
One example of transformation sales included 30-60-90 day plan. 30-day plan is to get to know each other, secure pipeline and do SWOT analysis with all the team members. 60-day plan was about presenting a vision. This phase was about defining the team’s shared purpose, revenue objectives, territory management and account coverage plans. When setting up objectives, they follow appreciative inquiry process – defining (best/good practice), dream – pushing the boundaries, design – the future state and destiny – empowering the team (learning, adjusting). 90-day plan was about coaching, pipeline management and demand generation.
Coaching to the mindset is different than deal review coaching.
Values are simple to understand but not simplistic to execute.
Future
It will be about emerging customer experience (CX) focus – purpose-driven value-creation. Customers will be less concerned with what you sell and how you sell, but will want to know why you sell. Capitalism in this form is under pressure. Milanovič in his book Capitalism, Alone: The future of the system that rules the world, is questioning survival of social contracts that are pressured because of wealth inequality.
The pressure on salespeople to close deals to meet quarterly targets – current practice in so many organizations – is a reflection of stock market sentiment and is, in so many ways, counterproductive.
Self-regulated sales practices can also be challenged and in some industries, like insurance, some regulations are already introduced.
New trend is relationship capitalization. It is the process of capitalizing the value of client contracts and the network of people and organizations that represent employees’ clients, partners and suppliers. If the relationship capitalization is officially recognized by the financial communities, salespeople could justify investment in relationship-building activities if finance teams could see their impact on improving relationship capital.
If selling is to be transformed, it could be argued that academic approaches to teaching on the subject require transformation as well. Corporate sale education in the past has often been “prescriptive”, linear and content-centered rather than learner-centered. New idea can be work-based learning with academic accreditation.
