"Recommendations are the best method of generating new business opportunities." But are they really?

What Drives Your Business Today? Recommendations?

Often we hear and read that recommendations are the best possible method of generating new business (sales) opportunities. In addition to »cold calling«, recommendations are actually one of the few marketing activities that also work well in the complex B2B sales process – this was recently described by my colleague Tamara Ćetković in the article 'Do you really make sure you have enough »meat« for sale'. 

The reason for the effectiveness of recommendations is, of course, very simple. Recommendations work on principle of trust and acquaintances. One to recomend us, is usually a very well well-known person, our relationship is based on mutual trust – with recommendations, there are no concerns about inadequacy, self-interest or even malicious intents.

Such personal information are very much appreciated, as shows the BusinessWeek research which provides clear and convincing evidence: out of 700 companies surveyed, 22% of companies selected recommendations of acquaintances and business partners as the best method for generating new opportunities. Therefore companies strive to be recommended forward.

But is this true? Are personal recommendations really that great? Do they really generate so many sales opportunities and yield? Our experiences tell us no.

Recommendations from acquaintances VS. my ego

An important part of recommendations, one that is often missed in the professional literature and discussions, is the psychological impact that recommendations have on those to whom the recommendation relates.

What does a scenario that is doomed from the start according to our experience look like:

We at the Customer: "Well, do you know anyone else, to whom we might help the same way we helped you?"

Existing Customer ZX: "Yes, the person XY in the company XY also has similar problems. You can call them, here is the contact, and tell him that I sent you!"

We: »Greetings, g. XY. We are XY person from the XY company, and we are offering XY services/products, we also collaborate with your colleague ZX who mentioned that you have similar problems, and recommended you to hear more about it, so that you could find out if we can solve your problems as we solved his.«

XY swallows hardly: »Of course. I'll meet you at that time and there, LP.«

This is a mock example, however. What have we achieved with this? In principle, we were only able to step on XY's ego with this, when we told him, that we know, that something is not working properly. Even more – this was told to us by his acquaintance/business partner, i.e. a person that he is dealing on personal level with. His confidant therefore considers that XY is weak in a certain area, which is almost the worst thing that can happen to any individual's ego. If you already have a 'problem' (and you do), you certainly do not want them interpreted to an acquaintance. Nor to the company by an acquaintance recommendation. Finally, do we discuss the most serious problems with our partners or friends in private life... Or do we pretend to be strong in front of them, and rather repress problems or tell them to a »competent stranger«, i.e. a psychiatrist?

So we really have not done anything. We will get a first meeting, definitely. But we won't acquire more information or even perform a transaction. We are too close to the acquaintance of XY and there is a real concern that XY will be seen as weak, if he has any errand with us.

Are consequently personal recommendations worthless?

Absolutely not. Recommendations are dry gold in sales. However, they require a methodical approach and a well set plan of how to contact the person XY, when to pull recommendations out of the hat and how to do it.

Do you have opinions, comments? A good know-how from personal recommendations? Join the debate on LinkedIn or contact us at +386 (0)1 5444 999 or email us. 

  

Gal Kočar
Market Development Lead

Do you really make sure you have enough "meat" for sale?

A Focus Above the Funnel is Esential to Generate Leads

When we talk about sales management, most of the time is dedicated to monitoring and managing the sales funnel sales opportunities. Too often, not enough emphasis is given to the structured acquisition of leads, although activity in the early stages of a significant impact on the outcome of individual sales opportunities.

 

In order to deal with good sales opportunities, we need greatest possible number of leads and also a clever salesperson would you want as much as possible. The problem is that generating leads is seriously hard work, and the majority of sales that are like in action and on the ground, does not proceed.

    

Below we will mention a few ways of generating leads. All will work if you put them in to practice, and do so in a consistent ongoing way:

• Referrals
• Dependent Referrals
• Networking
• Directories
• Cold Calling

Referrals

Very few actively generate referrals. We think we need to know or "have a relationship with" the person you ask for referrals, but it is not. Referrals can be obtained from a lot of people you deal with in business, from prospects, clients, vendors, tradesmen, even other leads. .It is never too early to ask for referrals, you may not get one right away, but people will know you are ready for them.

Direct Authority Referrals

Part of referrals needs to be exempt from the above categories. These are the referrals of people who have relationships with people who could use our service or product, and are in a position to have to more than strongly influence matters with their authority. They have information that can accelerate the transition stakeholders in a business opportunity and also shorten the sales cycle. These could be lawyers, accountants, business advisors, bankers, ie persons who are entrusted to our interested party and it has a direct impact.

It is smart to connect with companies who offer complementary solutions to ours, and who allready build confidence to our interested party. They help us to sell our solutions, as they are trusted client for those who provide them with a comprehensive solution to the problem.

Irrespective of the nature of the recommendations we may take the initiative to circulate some recommendations in order to build a healthy relationship that will show the long run results.

Networking

Networking is the everyone's task, which does not mean that it is done effectively. All networks are not suitable for every type of sale, but there are always a number that will provide you a steady stream of leads. Since networking is part of the company's strategy, do not exaggerate, but do it properly. It is necesary to set targets to measure and perform networking based on clear objectives and results.

Directories

There are a number of different directories for different prices, but if they provide us the leads we need, the cost are negligible. The advantage of databases is that they can be filtered if necessary, and extracted just what you need.

Cold Calling

In addition, other than referrals, cold calling is still the most time and cost effective way to gain and qualify leads and turn them in to prospects. The survey results showed that the top three ways companies generated quality new leads over the past two years are:

• referrals from clients or partners (22%);
• general referrals (16%); and
• cold-calling or telephone prospecting (13%). 

That wea are able to enter in to transactions, we need opportunities and high-quality cold calling is an effective ay to find those prospects that need us, but do not know how to find us.

Using the above mentoined methods can ensure that you have sufficient and a steady source of leads as well as you can qualify, rank and continuously convert those leads to prospects and then to sales.

Although, it's not easy way, the above-mentioned approaches ensure that interested parties, with whom we have contacted so far, will find our solutions, when they'll need it. 

This article is extracted from: "Lead Management - A Focus Above the Funnel - Part II", Tibor Shanto

http://bit.ly/xoSjQ3

Tamara Ćetković

Consultant, Coach & Project Manager

Unmotivated salespeople? The incentives will not solve the situation.

What motivates a sales force?

When my colleague googled the phrase "Sales Management", he ran into an article, written by Ms. Sabine Petrov, titled: Most Common Errors in Sales Management. The article was very practical unlike many theoretical articles and interviews found in media and was discussing concrete situations in sales departments of our companies. 

I would like to briefly comment one topic from this article -- namely, the negative assessment of the incentive plans expressed by sellers. The article states that the sales people at least agree with the following statements:

1. Everyone in our sales department is familiar with the rewards and sanctions for exceeding or underachieving sales targets;
2. Non-monetary rewards are tailored to meet the individual needs;
3. The manager clearly explains why I have or have not received the award;
4. Financial reward is directly tied to the individual performance or meeting the sales targets. 

Of course we should be aware that in almost all employee satisfaction surveys rewarding usually comes last on the scale and there is nothing wrong with that. Employees are hoping that this will affect the salaries -- who can blame them :) 

   

But above statements are specific and well placed, so disagreement with them is not to be taken easily as general whining about the salaries. Why? 

Because they do not speak about money but about fairness and the so called hygiene.

     

The theory of managing people is blessed with Herzberg's Motivation-Hygiene Theory which basically says that the factors that motivate human beings are not the same as those that demotivate them. For example, poor relationships at work demotivate us, but very good relationships on the other hand do not motivate us. A seemingly useless assertion but let's see an example. For employees it is really great to have excellent relations in the company (conversations, coffee, socializing, etc..) but this will not directly stimulate them to put in extra effort on challenging tasks.

    

More important for the practical aspect of people management and rewarding is Herzberg's claim that motivation can only be built on hygiene. This means that you must ensure first there are no factors that demotivate, only then can you motivate your people with motivators. So what, you say? 

A reward system that is not understood does not work!

Now comes the shock - this means that if your employees perceive the reward system as undefined, nonobjective or even unfair -- awards and sanctions will not work at all. Given the above arguments or denial of above claims by salespeople we can assume that a huge amount of effort and money for incentives in many companies is practically thrown away. 

So, an incentive system needs to be: 

• simple and understandable ("less is more");
• clearly defined in detail (money is a sensitive issue);
• repeatedly communicated (any misunderstanding is dangerous);
• thoroughly discussed (so all is clear and perceived fair). 

only then can it can work. The first point is important so that points 2-4 are not too difficult. If it is simple we can accomplish the rest.

Well, let us now know your comments and questions! And send the link to this post to your superiors, the incentive systems must be improved. 

      

P.S. For managers - do not throw money away for incentives that do not work! 

Tamara Ćetković

Consultant, Coach & Project Manager    

If the Client Thinks Your Price is too High, He’s Right

Is Your Price Too High?

The Entrepreneur starts out by thinking, not about the business he’s going to create, but about the customer for whom he’s creating the business. 

The Technician, on the other hand, first looks within at his skills and abilities—and only then he looks outward to ask: “How can I sell this?” To the Technician, the product is what he delivers to the customer. And since the creation of that product required his time, the customer is always a problem because he never seems willing to pay the Technician’s price.

  

But trying to justify your price based of the amount of time it takes is not a winning value proposition. That’s because the client isn’t interested in paying for your time—he wants a result produced or a problem solved.
  

Whenever we buy something, it’s because we expect more back in return. So how to you become more valuable in the eyes of your prospects? Simple. Help them get what they need. That means setting your Technician hat aside and donning the Entrepreneur hat. Forget about your skills and abilities and ask a few simple questions:

• What pain or problem are you trying to alleviate for your intended customer base?

• How do they feel about this problem?

• How do you want them to feel instead?

   

So instead of asking: "How can I sell this?" you ought to be asking "How do I want my customers to feel after they’ve bought this?"

   

Recently we can read a lot about the commoditization of web design. That happens when clients are confronted with too many choices because supply is plentiful and everything seems the same to them. Like it or not, the low barrier to entry has made that an unpleasant reality in the web design industry.
   

As The Technician, the product you deliver—a finished website—is the commodity. But as The Entrepreneur, the final question you must ask is, How do I want them to feel about me and my company, not the commodity I’ve sold to them? Answer that, and you’re well on your way to getting past, "Your price is too high.” If you don’t understand value from the client’s perspective, you’ll never figure out why the client thinks your price is too high or what to do about it.

  

Here’s what sales guru Jeffrey Gitomer says about why people buy: "It never ceases to amaze me that companies will spend thousands of hours and millions of dollars teaching people “how to sell,” and not one minute of ten dollars on “why they buy."

And "why they buy" is all that matters. Why clients buy and why they pay your price boils down to one vague, hard-to-define concept called value. And while "value" may be difficult to grasp, this much is certain. Value’s not something you establish by talking about how long it takes to build a site. The client cares about his bottom line, not yours. 
  
Establishing value means addressing what matters to him or her, not what matters to you. Figuring that out means getting inside your client’s head. Here’s where those of us who are technically-minded struggle. You need to think like your customer. And since your customer is a business person, you need to think like a business person thinks. 

  

Thinking like a business person is more that just understanding their buying motives. It’s understanding what type of people they are, and what their struggles and concerns are. Steve Jobs once said that "marketing is about values." So understanding what your client values is the key to "providing value."

  

Blanka Cigler
Senior Consultant, Coach
 and Project Manager

Top 10 reasons people resist change

During our projects for establishing sales management system we often come across people who cling to old approaches or ways even if they acknowledge they are not successful any more. 

We've realised it's all about change management and that people naturally resist change.

So I decided to write a few blogs on the top ten reasons people resist change, based on an article of A. J. Schuler, Psy. D.

1. THE RISK OF CHANGE IS SEEN AS GREATER THAN THE RISK OF STANDING STILL

Making a change requires a kind of leap of faith:  you decide to move in the direction of the unknown on the promise that something will be better for you.  But you have no proof.  Taking that leap of faith is risky, and people will only take active steps toward the unknown if they genuinely believe – and perhaps more importantly, feel – that the risks of standing still are greater than those of moving forward in a new direction.  

Making a change is all about managing risk.  If you are making the case for change, be sure to set out in stark, truthful terms why you believe the risk situation favors change.  Use numbers whenever you can, because we in the West pay attention to numbers.  At the very least, they get our attention, and then when the rational mind is engaged, the emotional mind (which is typically most decisive) can begin to grapple with the prospect of change.  But if you only sell your idea of change based on idealistic, unseen promises of reward, you won’t be nearly as effective in moving people to action.  The power of the human fight-or-flight response can be activated to fight for change, but that begins with the perception of risk.

When we present our sales teams new sales approaches and methods they are afraid of start practicing them because they fear failure. Except of our reassuring they have yet no other guarantee that this methods work. But what exactly do they have to loose?

2. PEOPLE FEEL CONNECTED TO OTHER PEOPLE WHO ARE IDENTIFIED WITH THE OLD WAYWe are a social species.  We become and like to remains connected to those we know, those who have taught us, those with whom we are familiar – even at times to our own detriment.  Loyalty certainly helped our ancestors hunt antelope and defend against the aggressions of hostile tribes, and so we are hard wired, I believe, to form emotional bonds of loyalty, generally speaking.  If you ask people in an organization to do things in a new way, as rational as that new way may seem to you, you will be setting yourself up against all that hard wiring, all those emotional connections to those who taught your audience the old way - and that’s not trivial.  At the very least, as you craft your change message, you should make statements that honor the work and contributions of those who brought such success to the organization in the past, because on a very human but seldom articulated level, your audience will feel asked to betray their former mentors (whether those people remain in the organization or not). A little good diplomacy at the outset can stave off a lot of resistance. 

Times change and we must change too. This means that we must break up with established ways, tradition and people who bind us. Of course, in good faith - past has helped us become what we are, but it is time to write a new history. We should thank our long-time mentor (that could be ourselves), who brought us where we are today but we should take courage and go our way.

3. PEOPLE HAVE NO ROLE MODELS FOR THE NEW ACTIVITY

Never underestimate the power of observational learning.  If you see yourself as a change agent, you probably are something of a dreamer, someone who uses the imagination to create new possibilities that do not currently exist.  Well, most people don’t operate that way.  It’s great to be a visionary, but communicating a vision is not enough. Get some people on board with your idea, so that you or they can demonstrate how the new way can work. Operationally, this can mean setting up effective pilot programs that model a change and work out the kinks before taking your innovation “on the road.”  For most people, seeing is believing.  Less rhetoric and more demonstration can go a long way toward overcoming resistance, changing people’s objections from the “It can’t be done!” variety to the “How can we get it done?” category.

Sales approaches that we show our customers often encounter complaints that they are theoretical and can not be used in practice. This is only because they are not "tangible", at the beginning, when we are getting to know them. But once a seller takes the bull by the horns, he starts to wonder how he has been selling till this moment at all. It is therefore very important to help put theory in practice and that's what we aim to do.

... more coming up soon.

"You can't expect to meet the challenges of today with yesterday's tools and expect to be in business tomorrow."author unknown, unfortunately ;)

Tamara Ćetković

Consultant, Coach & Project Manager

The biggest frustrations of sales managers

The sales manager can be one of the toughest jobs. In many ways, you have a great responsibility - but you have to depend on the success of your team. You are requested to play the role of manager, business analyst, trainer, therapist, counselor, and so on. No matter which combination is yours, you will always face ups and downs of it. They'll be times when you will be impressed and grateful for the things that are going well, and those less pleasant moments of anger, sadness, even frustration. But what is bothering you the most? And most importantly, what will you do about it?A study on LinkedIn tries to answer the first question - and the results are as follows: the biggest disappointment among the respondents is that salespeople do not follow the sales process. Such a result is not surprising. But the truth is that even other listed frustrations (accurate forecast, pipeline with useless opportunities, start/completion of sales activities and opportunity is stuck), would be greatly reduced if the sales process was clear.

There are only two reasons for this problems. The first is lack of knowledge and skills, and second lack of will. In other words, one does not know how to complete the task or is unwilling to do it. You can overcome the first reason with training and the second one is, well, harder to address.Most sales professionals are aware that following a well-designed sales process, that is easy to use, best fits their business, and solves the equation of effort-reward, is not much to think about. If you follow the process, you sell more, a fact.Sales managers need to ask themselves 10 questions when guiding their team to use the sales process:

1. Does the sales process correspond to the way our typical customers want to buy?
2. Is the sales process consistent with our industry, product or service?
3. Do all supporting departments within the company understand the sales process to the extent that they can have a constructive conversation with the sales staff?
4. Is the sales process easy to use and is integrated with your CRM?
5. Does following the sales process help to forecast more accurately or is the sales team spending additional time for that?
6. Does the sales process have integrated measures to remove useless prospects form the pipeline?
7. Is the sales process leading sales people to successful deal signing?
8. Do you manage your opportunities using the sales process as a compass?
9. Is sales support and guarantee well integrated throughout the process?
10. Have you captured your skills, methodology and best practices in every step of your sales process?

If you can answer yes to 7 of this questions, than your sales team is probably doing a good job. If you can not do so, then do not blame the team for not following the sales process. Improve your process first.