Sales - Knowledge is strength

In my previous blog on sales (Sales - Its all about money), I had written about the importance of money in securing a sale. In a B2B environment, customer will buy from you only if there is a financial benefit for his/her firm. Customer will buy only if:

1. Your Product/Service reduces customer’s expenses without lowering performance/quality
2. Your product/Service enables the customer to maximize his profits or ROI
3. Your product/service reduces the business risks

The salesman goal is convince the customer the financial benefits of buying his product. To convince the customer, salesman must therefore know the financial details of the customer’s current alternative to the product/service the salesman is selling. This knowledge is of vital importance to a salesman to close the deal.

Knowledge about the customer

Getting to know the financial information about the customer is quite a task. Salesmen will have to spend considerable amount of time & energy to know about the customer.

However getting financial information about the customer is relatively easy. If the customer is a public company, then their financial information is freely available at www.sec.gov or at similar organizations (SEBI in India) in form of annual reports (SEC 10K), quarterly reports (SEC 10Q) and other financial updates (SEC 8K).

Sarbanes Oxley Act (SOX for short) has been a boon to all salesmen who are seeking financial information about their customers. SOX mandates that all the financial information disclosed to public through SEC 10K/10Q/8K must be accurate.

However, reading these reports and making sense out of these reports is a different matter. To understand the financial information in these reports one needs to have some financial accounting knowledge. It may be useful to enroll in an evening MBA class or atleast attend a few accounting classes to learn how to extract valuable information from the SEC reports.

If you have a non-US, public company as your customer, then it may be a good idea to hire a consultant or use your company’s accounts department resources to interpret the financial data of your customer. Please note that the accounting standards and practices vary across countries. Non-US firms report their financial data in a different format than the US firms. So it takes an expert in International Accounting to interpert International financial accounting information. Alternatively, subscribe to some stock analysis reports from investment bankers.

Every salesman will have a few privately held companies as customers. Getting financial information about private companies is difficult as these private firms are not mandated by law to publicly disclose their financial information. However, a few privately held companies do offer their financial data to public - either through their web sites or through market analysts. Another good way to get information about privately held firms is to through paid database services such as www.hoovers.com or www.lexus-nexus.com . In general, it is difficult to get quality information about a privately held companies.

The best way to get information about privately held companies is to ask:

1. Their customers - i.e., customers of your privately held customer
2. Their suppliers
3. Employees/sales reps/salesmen of your customer firm

Information coming from such sources (customer’s customer/supplier/sales reps/employees etc.) must be treated cautiously - and must never be taken as a final word till it can be corroborated through a second source.

Invest time to get knowledge

Most successful salesmen will tell that they spend considerable amount of time learning about their customer. I have setup my financial news web site to grab any news about the companies whose stocks I like to invest in. Similarly, a salesman can setup his/her investment news web site (my.yahoo.com or www.etrade.com etc.) to collect any news or financial information about his existing/potential customer firms.

I also subscribe to newsletters from customer’s web site, investment broker firms etc. I also subscribe to online database providers such as www.hoovers.com & www.lexus-nexus.com to get information about privately held firms.

Knowledge is strength

Imagine that you as a salesman are in a meeting with COO of your customer - and you are doing all the talking. What is that the customer is most wanting to listen? - About themselves!! Its a well known fact that everybody likes to hear about themselves. So when you as a salesman have done your research and have gathered all that knowledge about your customer - I bet that you can have a long interesting ( to the customer ) conversation.

Having the knowledge about the customer’s financial, you can create custom offerings to help your customer and close the deal. The key advantage of having the knowledge about the customer - is that you can now customize the offering or atleast the payment terms or price that will best match the customer’s needs.

In short, the key point I am trying to communicate here is "Knowledge about the customer helps you close the deal"

Hosting successful Seminars

Today seminars - especially Technical seminars have become a common place. This month in Bangalore alone there are about 14+ seminars on various topics being held on diverse topics which range from CRM to EAI to lead free packaging to market research. These seminars are aimed at engineers - and is used to dissimate information of a particular product/service. Most engineers like these seminars - and marketers love conducting such seminars.

Seminars & its web variant Webinar are becoming a vital tool in the marketing mix. High tech products can be more easily promoted by seminars. But hosting successful seminars is not easy. Marketing manager has to overcome several challenges in order to host a successful seminar.
First step is to know the target audience, understand the needs and anxiety of your audience. This step involves choosing a right topic which is of interest. Most often, the right audience will be the employees, managers & executives of your customer firms, vendors and partners. Choosing a topic will help identify the target audience.

The next step is to figure out how to make them (audience) attend the seminar. This involves answering various questions such as: When to hold the seminar, Where to hold it? Who will be the lead speaker? How to promote the event? Etc.

It is the marketing manager’s job to work out the answers to the above questions. It needs lots of thought, planning and teamwork to host a successful seminar.

Content is king

No one wants to attend a seminar that sounds like a commercial advertisement. So pick a subject that really speaks to the audience you want to reach. The seminar should be educational and answers a problem faced by your audience.

Content of seminar is vital for its success. Content of the seminar should be boldly published to grab the attention of the potential audience and should promise useful information and a learning experience. Your target audience will ask themselves "What’s in it for me?" - and if the topic of the seminar is something of their interest, they will come.

A big name for keynote speaker helps

Who will be the main presenter? Choose a recognized expert, an author, a person who has succeeded in solving the problem presented—the more respected and known, the better your attendance. Selecting someone outside of your organization lends credibility to the value of the event.

For example, getting Dr. Philip Kotler to be the keynote speaker for a marketing seminar will ensure a huge audience. In such seminars others will also be presenting - others, including you or your associates, can also participate.

Big-name presenters may be easier to get than you think. Of course, you can pay them, if that’s in your budget. Once they learn about the planned promotion of the event, the amount of publicity they’ll get, and the exposure to an audience they want to reach, they may reduce their fee or do it for free. An offer to share the leads might be all it takes. The seminar gives them a platform, access to an audience, a chance to be the expert and gain more recognition for themselves or their company.

But a big-name presenter is not essential. Putting all your eggs in one basket may build a bigger audience for that one seminar, but a series of content-focused events pull more and better qualified leads in the long run. Multiple events offer prospects more convenient options of dates and times.

Timing is everything

You might have the greatest seminar ever, but if you have it on the wrong date, weekday or time of day, your target audience will be doing other things. Think about your prospects and check the calendar.

Eliminate holidays and the days before and after them. Forget about Mondays and Fridays. Mondays are too busy, and Fridays are for last-minute projects or early-departure days. Are there any trade shows that may conflict? How about end-of-the-month quotas?

Consider the time value of your expected audience. Since most attendees will participate if the seminar is before lunch (or if includes lunch). Seminars in the evening times must be avoided.

Most of your target audience may be heldup at work to attend the seminar. But having the seminar in the morning will be welcome as that will be the first activity for the day. From experience, I know that most prospects like to attend during lunchtime. (A free lunch has its own attraction)

Time to Promote

Once you pick a date and time, you need to decide on when to begin promoting the event and accept registrations. It has been found that Thirty days is the optimum time frame. Any amount longer, and the prospect may forget or lose interest. Less than 30 days doesn’t give you enough time to promote for maximum attendance. Also, it’s easier for your prospects to plan to attend something a month away than it is to plan for next week.

Realize that if you are planning only one seminar, some of your hoped-for audience won’t be able to make that day or time. A series of seminars is better, or a choice of two dates for the same topic would help solve that problem.

Trying to hit a home run with just one big event on one day is not the best strategy. Some valuable prospects may be vacationing, traveling or ill that day. So give them a choice of days or a series.

Proven Strategies to ensure a successful seminar

By practice, people have found a few proven strategies to make seminars successful. They are:

• Leverage existing relationships. Take a good look at your trade groups, associations that pertain to the topic, your partners and your vendors. How can they help? Perhaps they may cosponsor the event. Can they publicize it in their newsletters, emails and website. Place a registration link on their Web site. Ask them to participate in some way.
  
  
• Use your customer base. Unless you’re a one-product or one-service provider, your existing customers should be contacted often. They already know the value of your company and are very likely to attend the seminar. However, all too often, they may not know about your new offerings. They are your best prospects.
  
  
  New, qualified prospects are the lifeblood of any company. The goal of the seminar is to identify and deliver them. It’s easier for new prospects to respond to an informative seminar, because their worry about the sales pitch is lessened.
  
  
• Merge promotion of seminar into your normal marketing program. That is the most economical method, because there is little or no additional cost. All your advertising—search engine ads, newsletters, email, banner ads, your own Web site, even print and broadcast—is ideal for mentioning the seminar and giving the link to register. It’s also a response-builder.
  
  
  If you exhibit at a tradeshow, have fact sheets and registration materials on display and urge staff to meet, greet and mention the helpful free seminar. Talking about the seminar may quickly lead into serious discussions of products and services on the spot.
  
  
• Special campaigns get attention. In addition to merging the seminar promotion into your normal marketing, test some solo offers. These should feature the content, the value of attending and the convenience, and they should provide an easy way to respond. As you discover the value and results of seminars, you’ll budget more for special campaigns.
  
  
• Involve your sales force and in-house staff. Invitation calls by your sales force to customers and current prospects are a wonderful way to get registrations and warm up prospects. A personal invitation is usually appreciated and remembered. It’s an easy call to make and take, and may lead to some business right on the phone.
  
  
  In-house staff can also help in the promotion. Be sure they are fully aware of the seminar. Provide them a script for discussing it with every customer and prospect they help.
  

Keep it simple, but get what you need

A quick and easy registration process helps maximize attendance. You don’t want to lose a good prospect by making registration too cumbersome or lengthy. Your goal is to get complete contact information, reinforce the value of attending, find out the source of the lead and get some qualifying information. All promotions should have the same registration page link so that you work with only one database.

Don’t lose two out of three

Our experience has shown that unless you send reminders after the registration, 67% of registrants won’t show up for the event. What a waste!

To prevent this loss, send an immediate "thank you for registering" email with a request to mark their calendar. Follow this up with another email reminder about 10 days before the seminar, a phone call reminder the day before the seminar will warm up your audience.

Maximize attendance after the Seminar?

Even with all the reminders, some registrants won’t attend—an unscheduled meeting, an illness, the press of business that day… things happen. You don’t want to lose these prospects, because they have already expressed a level of interest.

Record the seminar as a video file and put it on your Web site. Send non-attendees a "sorry you couldn’t attend" email with a link to the file on your Web site. Preparing the file costs around $500, but this gives you a permanent Webinar that’s on your Web site for other prospects to view.

If you choose not to archive the event, at least send non-attendees another email (or call) with dates and times of repeat seminars.

Are they hot, or warm?

Right at the end of the event ask the attendees to complete a quick, on-the-spot survey. Seminars are meant to be interactive. Use this opportunity to get immediate feedback and more qualifying information.

About 75% of attendees usually fill out the survey. They ask other questions, provide input that improves future events and, most important, give you insights about their level of interest, needs and time frame. Plan your survey carefully.

Follow up quickly

After the event, send each attendee a "thanks for attending" email. Send a survey to those who didn’t complete one earlier.

Now that you have hit the jackpot with all of these qualified leads - some warm, some hot, some as connections for the future - implement your sales plan. Get the information to your sales force and monitor progress and results. With a carefully planned event, you are sure to win new business.

Sales - Its all about Money

Till date I have written only about marketing in this blog. It does not mean that I don’t know about sales. Nor does that imply that sales is not important. Being in marketing, I have a lot to say about sales - especially about B2B sales. So this blog is the first in the series on sales.

Anyone who has sold any thing in their life will know that the final sale depends on the selling price. Also one notices that there are different factors that can influence the selling price (in either direction). But in the end - it boils down to one thing - Money!!

A sale is completed only when goods or services is exchanged for some money. ( I am talking about capitalist economy here - and not referring to barter). This understanding often creates an impression that sales is all about deciding on the final selling price - and hence all the hard bargaining is concentrated on the price. While this is true, it does not depict the full picture. In reality, a sale happens only when both the parties agree on the final price, payment terms and a contract is drawn that binds both the parties into doing an exchange.

It is all about Money

Money is the lifeline of any business and in all businesses it is the sale which brings in the money i.e., the income for any firm is derived from sales alone. (either sale of products or services or ideas. Even royalty income is based on sales)

Sales department is therefore solely responsible for bringing in the money (or bringing home the beacon). The rest of the organization is there to help sales or manage the money. Here again, I must say that bringing in the money is not a challenge for sales. The real challenge is bringing in more money in exchange for a product or service which costs lesser to produce internally i.e., the selling price must be greater than the cost of producing the goods or services - And this is a HUGE challenge.

The performance of the firm is measured in terms of Money. Investors use the terms Return on Equity, Return on Assets, Earnings per Share, gross margin, top line growth, Return on Investments etc.., to measure the performance of the firm. Note that all these parameters are based on money (coming in & going out). Sales is therefore playing a vital role in the success of an organization.

A good salesman understands that a firm must sell its products or services at a profit. Let me tell you a street smart business statement from my Gujrathi friend: "No Profit - No sale". He was very clear that he will not sell if there is no profit in that deal - And this is a fundamental truth of business. There are occasions when firms sell at a loss - this is done for various reasons: getting a strategic customer or gaining market share etc.. But this in pure business definition selling at a loss is not a sale - and must be rightfully called as "buying the customer".

Basic idea of sales

The basic idea is that all sales must be profitable. The final selling price must be above the reserve price - selling below the reserve price will incur a loss. Knowing the reserve price is very important for every sales person because that is the BATNA-Best Alternative To Negotiated Agreement. ( I will write more about BATNA later in this blog.)

Another important thing every sales person should know is what are the financial objectives of the buyer. In a B2B sale, all purchases can be classified into 2 categories:

1. Necessary expenses - such as payroll, insurance, rents etc.
2. Investment related expenses - such as capital equipment, raw materials etc.

And the customer will buy only if:

1. Your Product/Service reduces customer’s expenses without lowering performance/quality
2. Your product/Service enables the customer to maximize his profits or ROI
3. Your product/service reduces the business risks

Therefore to make a sale, a salesman should be able to relate his product/service offering to the customer’s bottom line and convince the customer about the benefits. In other words, a salesman should be able to talk about the impact in $$ terms - i.e., "Its all about Money"

Closing Thoughts

Business to business sales is a very complex process. Money definetly plays a major role - but there is lot more to closing a deal than moeny alone. I will be writing more about sales in the future blogs.