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By Mitch Goozé of Customer Manufacturing Group
Before we get into some real world examples, take a look at Figure 1. This maps a simplified sales process. There may be numerous intermediate steps within each of these major steps depending upon the variables in the buying process of your particular industry’s customers. How can you communicate more efficiently with potential customers at the various points in this process? There are going to be trade-offs in effectiveness as you try to become more efficient. Those trade-offs have to be measured and managed to improve performance and/or lower costs. How do you do that?
Try thinking of the sales process as a manufacturing process. What are you trying to manufacture? — loyal, profitable customers. How well are you doing it? How can you improve a production process you haven’t yet defined? Do you see the problem? You can’t expect to get better on purpose without a process you can manage.
To become more efficient at selling, you must be willing to truly understand the customer’s own buying process and then design a selling process that matches his or her needs1. It is foolish trying to sell to the customer the way you want to sell. Understand how they buy first, and then adapt your selling process to match their buying process.
Everything you own that you’re sorry you purchased, somebody sold you. The stuff you love — you yourself bought. So to sell correctly, you must help the right customers buy.
The selling process can be designed only once the customer’s buying process is understood. Once you open your mind to new design possibilities, you can change the resources you apply to managing the process. These changes increase efficiency, lower costs — and usually are more effective too.
Selling Business-to-Business, High Ticket
Now, let us give you some real world examples. We’ll start with a business-to-business sale of a high-ticket item. In the early 1980s, one of us ran a computer workstation company that sold $25,000 to $50,000 systems. (While workstation prices have dropped dramatically since then, in today’s environment and for the usage envisioned, this is about a $100,000 sale in today’s dollars.) Conventional wisdom held that to be able to sell to the Fortune 100 IT departments, which we were targeting, required a field sales organization of national scope. This organization was expected to hand-hold customers and provide additional field support on-site as needed.
Field support people were necessary back then. However, with today’s technology and smart, self-diagnostic products, the need for as many field-based support people is being minimized.
The field sales organization, which was very limited due to the company’s start-up nature, was neither fully effective nor truly national in scope. (There were employees in some cities in the United States, but in contrast to truly national companies, it was far from effective coverage.) But the organization still cost a lot of money. Unfortunately, they failed to discover, until they’d run through too much money, that they could have executed a substantial portion of the sales process over the telephone.
Not knowing the end was near, the company converted to a combination of inside and outside sales people. Using telephone-based sales professionals in combination with the field sales people, they were able to place five times as many trial orders for the product in only 20% of the time. If they could have discovered sooner how to sell more efficiently, the company might have survived its investor crisis.
Selling Through Distributors or Retailers
How about a business-to-channel strategy? A while back, a company called 10-Star sold personal computer accessories through retailers. Their competitors sold exclusively through field sales people who were either company employees or manufacturer’s representatives. 10-Star used telesales people only. Their sales people signed on new dealers and serviced them over the telephone. Rarely did a sales person visit a dealer.
10-Star became very successful at establishing new dealers, and at understanding their stocking needs without much, if any, face time. This isn’t necessarily the perfect business model. It’s just what the thinly capitalized company could afford — and it worked. Today a combination of inside sales people and outside merchandisers or detailers, with some sales background, could be the right mix for this type of business.
Changing the Rules, Winning the Market
Then, there’s the printed circuit board manufacturing company in the Pacific Northwest. This company has become one of the largest U.S. suppliers of printed circuit boards to OEMs (original equipment manufacturers) by exclusively using inside sales people. And that arrangement came about by accident.
Well, not exactly. When they started, the company couldn’t afford field sales people. They decided to temporarily use inside sales people until they could afford ‘real’ sales people. None of their competitors utilized inside sales people, except for taking orders or providing customer service. They ultimately expected to follow the sales and support model of their competitors, but they made this professional compromise and used only telesales people to get the business going.
The company soon discovered what numerous smart companies have also realized. When done right, inside sales works — and it costs a lot less than a field sales organization. A few years ago when we met with this company they had become a leader in the industry and had yet to hire a full-time, outside sales professional. They discovered that properly trained inside sales people could serve their customers better and at a lower cost. Additionally, they made more sales per person. They went from start-up to leader in less than five years.