The day started like any other. Then, my contact called and invited me to a face-to-face meeting. I agreed and hustled off to his offices. I thought, "This is it. They are finally going to close the deal!"
My contact was in the lobby waiting for me. He escorted me to a small lobby conference room and closed the door. "Jack, you know I believe in your product. My whole team thinks you and your company rock. We are ready to approve your proposal and get this thing started. Unfortunately, I have new orders from the top. To proceed, you have to convince my CFO." He said I had (15) minutes to discuss our products and services with the CFO. If the CFO signed off, we would proceed.
Just then, the CFO came into the room. She introduced herself, sat down and said, "Thanks for coming on such short notice. Bob indicates you have a product that is perfect for our needs. I have reviewed your proposal and on the surface, things look good. I just have one question. What exactly can you do for me and specifically what the senior team is worried about?"
The Salesperson's Dilemma
Every salesperson faces competition. Whether it is from a rival, new technology or who knows what, we are always scraping and clawing to stay on top and make our numbers. But what happens when the rules change overnight and we are faced with client directives that don't follow the usual features & benefits, probing/pain questions or strategic consulting pattern we are used to? What happens when we are summoned by the CFO/CEO/Director of an organization and she says, "You have 15 minutes. What exactly can you do for me and, more specifically, the concerns of the senior team?"
I urge you to be honest here. How many salespeople do you know that are qualified to answer this question? More to the point, how many of us even know what the CFO's question means?
As noted in recent polls of U.S. salespeople and highlighted in ASTD's recent research report, Accelerating Revenue Through Learning, Developing Sales Teams the Win (hereafter referred to as the Study) , most salespeople are under-qualified to answer this question and poorly trained on the subject. In fact, only 44% of us ever receive any formal sales training sponsored by our organizations.
The Study finds that we are at the dawn of a dramatic role-shift that requires sales professionals to include financial analysis in every sales presentation. Salespeople are now behind the eight ball and sinking the cue is not an option.
The Study goes on to say that the salesperson's role has dramatically shifted four times in the past 30 years and we are now entering the fifth stage. Salespeople must become "business consultants". The Study states that, "The salesperson needs to understand the economics of his or her own products and services as well as the economics of competitive products and services. The salesperson must be able to explain his or her product's advantages in terms of net savings and cost reduction. This is a major shift in the salesperson's skill set. Most salespeople have little, if any, financial training."
What does this mean? At a high level, to survive and thrive, salespeople must change.
Change is good! But is it really?
"Change" is a powerful word. This single word ushered in a new Presidential administration and continues to evoke a basic business principal: change or lose your spot at the top. Over three quarters of the Study respondents want their sales training focus to change. They want to learn how to manage the perception of customer value, focus on strategic thinking and become a better consultant. Salespeople want more training in problem-solving and diagnosis. In fact, sales professionals ranked problem-solving directly behind sales skills as the most important skill a salesperson can acquire.
Yes, change is good and sales people have their hand up. But, is anyone listening?
Fortunately yes. In order to address this gap in problem solving skills, a new form of sales training, is quickly rising. Known as Financial Performance Sales Training, it focuses on the use of a prospect's financial data to close deals. Gone are the days when a chart imbedded in a "features & benefits" brochure depicting massive ROI will suffice. Customers are demanding and expecting that their professional salesperson will be able to understand their immediate financial problem(s) without the need for volumes of probing questions.
Why? Corporations are under pressure. They don't have time to be entertained by vendors following a pre-determined sales process or technique that doesn't immediately focus on their company's financial needs. The Study makes this clear: the expectations of industry are out pacing the training of the sales professional. Volumes of information available on the Internet make your prospect as educated as even the most seasoned sales professional. Your prospect wants you to get right to the financial point or they will find a vendor that can.
In our next blog we will discuss this new evolution in selling. We will focus on how to acquire financial sales skills and use your prospect's financial data to dramatically shorten sales cycles, position yourself as a trusted advisor and close larger and more meaningful deals at higher levels of the organization.
And what did I say to the CFO?
"Angela thanks for having me and I think I have an answer to your question. I examined the company's annual report and most recent 10K. I paid particular attention to your three financial statement bottom lines, crucial drivers and key metrics. I drilled down to the four, main ratio categories, Liquidity, Efficiency, Leverage and Profitability and proceeded to look at (26) KPI's. I believe our product immediately helps improve five of those. They are Days Sales Outstanding, Days on Hand, Cost of Sales as a % of Sales, Gross Margin and Return on Assets. I think it's likely we could impact several more but I will need to ask a few more questions."
The CFO smiled and said, "You are the first sales rep that I have met in this proposal process that presented their solution in my terms. You bet we can keep talking. How about we continue this meeting in my office? I'd like to hear more about the financial impact of your product and talk over some of the contract details?"
Don't miss the next blog when we discuss how simple it was to learn the approach I used.
In our last blog we discussed that salespeople are under-qualified to sell in this new economy. Why? While most salespeople possess strategic, relationship, and consultative sales expertise, many have little or no financial sales training skills. As a result, they cannot easily identify and formulate accurate business and financial cases for their products and services.
Since 2008, corporations are under a tremendous amount of financial pressure. They have limited time for vendors following a pre-determined sales process or technique that doesn't immediately focus on their company's financial needs. Prospects want sales professionals to get right to the financial point or they will find a vendor who can.
Fortunately for most sales professionals, it is easy to re-tool and learn to insert Financial Performance Sales Skills into each sale.
Salespeople need to remember just one fact: the key to closing any deal can always be found in the financial data of your prospect.
What Your Competitor's Don't Know About Senior Decision Makers
Financial Performance Selling utilizes your prospect's financial data to dramatically shorten sales cycles, position the sales professional as a trusted advisor and close larger and more meaningful deals at higher levels of the organization. The basic assumptions with Financial Performance Selling are:
- Key decision makers of every organization study and know what financial numbers are negatively affecting their firm.
- They have a fiduciary responsibility to examine products/services that can change these trends.
Moreover, prospects are willing to close deals faster if sales professionals will present their products/services in the financial terms that are meaningful to the bottom line. Most salespeople can't easily do that. Thankfully, you don't need the training of a CFO or an MBA to understand and present solutions connected to financial impact. In fact, the training to recognize the ratios and KPI's to quickly frame and close the biggest sale of your career can be accomplished in a matter of a few focused hours.
The Secret to Setting Up and Closing a Big Deal
All public companies make their financial data available to the public. A salesperson simply needs to tap into this information to gather the necessary data to formulate a financial impact? solution. The best sources for this information are the 10Q's, 10K's and Annual Reports of a company. Even if you cannot get a company's financial data, you can learn to ask the right questions to unlock the information. Your informed and thoughtful financial questions indicate to your customer's senior buyers that you are a candidate for trusted adviser status. Trusted advisers will always rise above the competition.
ASTD Says The Next Evolution Of Selling Is Here!
According to ASTD's recent research report, Accelerating Revenue Through Learning: Developing Sales Teams that Win, the salesperson's role has dramatically shifted four times in the past 30 years and we are now entering a fifth stage.
The Study states that, "This report has shown us that success in this economy is based upon the ability to shift selling strategy. Furthermore, the key to shifting selling strategy is sales force education. A new set of skills is clearly required, and this set of skills is significantly different than those of the past?"
As the study continues, "Over three quarters of the Study respondents want their sales training focus to change. They want to learn how to manage the perception of customer value, focus on strategic thinking, and become a better consultant. Salespeople want more training in problem-solving and diagnosis. In fact, sales professionals ranked problem-solving directly behind sales skills as the most important skill a salesperson can acquire?"
And How Exactly Did I Close The Sale?
At the end of our last blog, I joined my "almost-closed" customer's CFO in her office for a deeper dive into the financial impact of my products on her key metrics. "Angela, I told you I was sure my products could improve (5) of your key metrics, i.e., Days Sales Outstanding, Days on Hand, Cost of Sales as a % of Sales, Gross Margin, and Return on Assets. I can show you exactly how we impact each one. With respect for your limited time, would you tell me which one of those measures is bothering you the most?" Angela said, "Well, since you asked, it's Cost of Sales as a % of Sales?" I said to her, "Let me guess why: that number is going up because your salespeople are focusing too much on discounting and it is eroding your margins and your sales force's confidence?" Angela smiled, "That is exactly what is going on and you're the first salesperson we have talked to who understood the problem before we explained it. I have to admit that I'm impressed and I think we can begin next steps to getting this deal done."
In next week's blog, we will show you how I identified and understood and how you can all know the issues that would close the deal with the CFO. Having that insider's knowledge is the fast track to closing more and bigger sales every time.
In part one, we discussed that salespeople are under-qualified to sell in this new economy due in many cases to their lack of financial sales training. In part two, we covered the responsibility of key decision makers in all organizations to study and know what financial numbers are negatively impacting their firm. We also talked about their fiduciary responsibility to examine products/services that can change these trends.
In addition, according to ASTD's recent research report, Accelerating Revenue Through Learning, Developing Sales Teams that Win, success in this economy is based on the ability to shift selling strategy. Furthermore the report states, "For many selling positions, salespeople need more business and financial acumen than they have."
So hopefully we have painted a pretty clear picture that (a) salespeople need to be well versed in financial performance sales skills to compete in this economy and, (b) customers will buy from them if they do. To be absolutely clear, if salespeople use financial performance selling skills they will stand alone from the competition, close more deals and make more money. Plain and simple. Period.
How to Edge the Competition by Leveraging Your Prospects Financial Numbers
Let me illustrate this point through a scenario that many sales people face each day. A salesperson is competing for the business against three different firms. Each of the competitors uses similar ˜traditional" sales techniques that focus on forming relationships and strategic/consultative approaches. Each also stresses their features and benefits and has similar pricing options. If you were the client who would you choose? If you were one of the salespeople in this scenario how would you differentiate yourself from the competition? The answer of course is in understanding the financial numbers.
It is a fact that every purchase decision is a financial decision. If this is true, then why do sales executives continue to only focus on non-financial sales techniques to close deals? Wouldn't it make sense that, in order to separate yourself from the competition as a sales executive, you would simply have to understand the numbers and how your solution improves those numbers to state your case?
How did it end?
In my personal scenario, highlighted in blogs part 1 and 2, I ended up closing the deal with the customer by showing her that I recognized five key financial metrics that our services could impact. She responded by telling me the one financial metric in particular that was bothering her the most. As a financially trained sales executive I knew instantly that this metric, Cost of Sales as a % of Sales, was rising due to discounting. Equally important, I recognized that the other four financial metrics were also troubling and understood why they were going in their respective directions.
As you can see, by evaluating the company's financial numbers I had placed myself in the CFO's office and had the potential to have five different meaningful conversations with a key decision maker of a billion dollar company. Most importantly, as a prerequisite, I did not have to engage in a long term rapport building process with the CFO in order to schedule the first meeting, show up and whip out a 50 slide PowerPoint slide presentation or ask embarrassing pain or needs pay off questions. I simply studied my client's numbers and within an hour had a game plan that worked and ultimately secured me the seven-figure deal.