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Successful Selling: It's Not About What You Know
By Kim DeMotteHow do your salespeople spend their days? Do they spring into action at the behest of every prospect who shows the slightest glimmer of interest, buying plane tickets, doing research, writing proposals, wining and dining? Are most of these prospects really likely to say yes? And are they prospects whose "yes" you really want?This last question may seem bizarre to many 21st century professionals desperate for every scrap of business in a lean and mean marketplace. But it's the one question that should guide every move your team makes.You can't afford to spend your time and resources on the wrong types of customers. Don't just ask yourself if you could do business with a prospect. Ask yourself if you should do business with him. Will that customer advance your company in the direction you want it to go? Or are you burning resources on a prospect just because he filled out a bingo card to get a free baseball cap or because your salesperson hounded him into a reluctant "maybe" because she has to set up 10 appointments a week to get her paycheck?The truth is that you should be seeking to disqualify prospects up front so you won't waste time on someone who just isn't right for your company. There's a big difference between your next customer and your next best customer. Realize this and you'll see why success is not based on what you know; it's about what you no.In other words, you should listen for the "no" at the earliest point possible so you can move on to bigger, better, more suitable prospects. For many companies, this is nothing less than a complete reversal of the cast-a-wide-net-and-talk-them-into-saying-yes prospecting paradigm.Here are a few tips:Remember what prospecting really means. Think about the old 49er gold rush guys panning for gold. They were sifting or filtering out what was useful or valuable from what was not. They were real prospectors. Somehow, we've lost that picture when we talk about "prospecting." Though the methods of many companies may suggest otherwise, prospecting does not mean trying to make what is not useful or valuable into something that is useful or valuable. That would be like the gold prospector looking into his pan of silt and suggesting that maybe it could become gold dust -- if the prospector spent enough time and energy pursuing it, coddling it, refining the water that flowed over it, and so forth.It didn't work for the 49ers, and it doesn't work for you. Make the Pareto Resolution. You've probably heard of the Pareto Rule: 80% of your income will come from 20% of your customers. How would life be for you if ALL your customers were like your top 20% today? Well, your company would probably be leaner, more agile, more efficient. Instead of hiring more salespeople to get more business, you'd teach your current team to filter out the silt that comprises your current 80%. You'd grow quickly toward your goals because every new customer would fit your predetermined parameters. There would be less wheel-spinning and more getting on with business. Life would be more fun. Making the Pareto Resolution simply means deciding to leave anyone who looks like your ho-hum 80%-ers behind in the creek while you continue your relentless search for gold.Decide who you don't want as a customer. Here's where the rubber meets the road. You must set the parameters for identifying someone who is not worth spending your sales resources on. For a real-life example of this process, I'd like to share the following story:Recently, I had the privilege of working with the international sales team of Autodesk's Consulting Group in San Rafael, Calif. I was brought in because their vice president of sales, Mike Fauscette, has the challenge of raising the department's sales to $150 million and simultaneously improving their margins from the 15% range to the 30% range.Autodesk doesn't have a market penetration problem. They are in virtually every Fortune company in the United States. But the consulting group does have limited resources and they need to be able to pick and choose what business supports their revenue growth AND margin requirements, and figure out what to do with the projects they choose not to undertake. After working with them for a day, they got clarity among themselves as to what was and what wasn't going to support the collective goals of the group. For example, they decided what NEVER would be acceptable business for them (commodity businessÂ…training of commodity product, etc.), and what ALWAYS would be acceptable business (hard and weird consulting [their words!] that supported at least 30% margin). That left a family of business in between that needed some filter parameters-such as "referenceability," "repeatability," "leading edge technology," etc. And, they agreed that they would assign scores to these parameters and projects that totaled a minimum amount that would be accepted (on a case-by-case basis), and those that did not would be sourced elsewhere.Prior to this exercise, the team would struggle to decide what to take and what not to -- and what to do with what it did not take. At the conclusion of this meeting, it was now clear that 80% of the proposals would fall into either "definitely yes" or "definitely no" (and so required little or no analysis), and the remainder had clear parameters for deciding yes or no.Hire a prospecting specialist. Okay, so you've settled on some stringent disqualifying factors. Now, how do you start filtering out the silt? The problem is that salespeople in general do not like to prospect. It means cold calling. It means interrupting someone's day to see if they want to buy something. So, for the most part, they don't do it. With certain industry exceptions, the average outside salesperson makes 17 prospecting calls per week. And the average call (when he actually gets through to the desired party) lasts 12 to 14 minutes. What's the purpose of that call? Why, to get an appointment, of course.The smart thing to do is to hire a "Catch & Release Prospecting Specialist." This person will dial the phone 35 to 50 times per hour, getting through huge databases of silt and throwing the pans back into the creek with reckless abandon until that pan with the shiny stuff shows up -- and it always does. But it might be the 300th pan.Let's do the math. The salesperson makes 17 calls per week. To get to the 300th pan at that rate would take 17 weeks and three days. At 50 calls per hour, the prospector has identified the gold nugget in six hours.The really good news is that the Catch & Release Prospecting System goes a long way toward preventing two types of expensive errors in your sales process: Spending your precious resources on prospects who aren't likely to become 20%-ers and missing out on business because you don't even know a potential prospect is in need of your product or service today. This is truly a Six Sigma exercise for the sales process. It's an elegant and simple and obvious solution, and it amazes me that every company hasn't embraced it. Okay, you may be thinking, this approach does make logical sense. But human beings are not always logical. In today's economy, with customers getting harder and harder to come by, how do you not take a grab-all-the-business-you-can approach? How do you make your lips form that tough little two-letter word?It's all a matter of gaining confidence. Give no a try. When you see how well it works for you, you'll find it gets easier and easier to go for the gold.Saying no to the wrong kinds of customers ultimately means saying yes to your own goals and aspirations. It means becoming self-actualized as a company, reaching your full potential, instead of settling for the market's table scraps. Of course, this path is more rewarding than scrounging for every dollar you can get at the cost of your own integrity. It simply feels better. Once you've experienced that feeling, you'll get over your fear of no pretty quickly. And when the dollars start rolling in, you'll never settle for chasing silt again. Kim DeMotte is the founder and managing partner of Power of No, a St. Louis-based firm specializing in improving corporate sales and management effectiveness, and the author of The Positive Power of No: How That Little Word You Love to Hate Can Make or Break Your Business (Facts on Demand Press 2003). Visit DeMotte's company: www.powerofNO.comThis article is new this week in The Business Journal's small business how-to section. To see what else is new, click here or click on the "how-to" tab at the top of The Daily Business Journal Online home page."