In this issue…
SALES
• Is Your Value Proposition Valueless?
NEWS
• Research finds group brainstorming ineffective
• Study rebuts magazine engagement assumptions
• Are B2B websites chasing away customers?
TRENDS
• The big opportunity
TIPS
• Uncover new ways to grow your business
• Does your new product or service pass the simplicity test?
• Need to collect on a delinquent account?
• Persuade someone with a cup of coffee
• Help your staff retain what they learn
• Much more…
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SALES
Is Your Value Proposition Valueless?
While trying to stand out, salespeople typically just turn themselves and their products into commodities.
WHETHER YOU CALL it value-based selling, feature and benefit selling or value proposition selling, this sales methodology has severe limitations. This classic form of selling, which has served companies so well in the past, no longer works. Companies that have long relied on this methodology to differentiate themselves from their competition to translate their value, maintain their margins and prevent commoditization are now finding that it is backfiring.
Commoditization — the very thing they work so hard to prevent — is what they are creating.
Now, let’s imagine that you no longer work for your company. You have landed a plum job with your biggest and strongest competitor. You now go back to your former contact, and he begins to ask you about your new company and its capabilities. What can you do to help him? What makes you different? He may prompt you by asking, “Do you know, one of the things we really appreciated and valued about XYZ Co. was their fine quality? Do you have good quality?” Your response is, “You bet, it’s one of the reasons I moved over to ABC Co.” “And how about reliability, expertise and value?” You pull out all the latest industry reports that rate your company number one in its field for reliability, expertise and value.
In all your excitement to create this truly unique value proposition, what you really have created is a definitive and complete denigration of your value-add. You rehearse chapter and verse the exact value proposition your competitors tout. Because you’ve jumped the gun, you have left the prospect with one differentiator, but unfortunately it is the same differentiator by which he will now measure all competitors. You guessed it — price. You are now back to the original problem: You have created commoditization.
Not only have salespeople commoditized their companies’ value proposition, they have also commoditized themselves. They look and sound like everyone else, and that is why it is so difficult for them to get new accounts and to have customers respect their time.
And why should they since they don’t bring any true value to the table? Because we are in an information economy, customers no longer rely on salespeople for the traditional information they used to value. This information is instantly available on the Internet and customers are generally more savvy and better informed than they were in the past. From where the buyer sits, all salespeople and products look frighteningly similar.
What is the answer? Nothing less than a total retooling of your message and the way in which you approach the marketplace. First, companies must stop believing that they have cornered the market on quality, reliability, expertise and value. These characteristics only get you invited to the dance.
Sales are won and lost in the salesperson’s understanding of the value gap that your customer is experiencing. Your job is to get information, not give it. The salesperson who can define the problem most effectively by asking questions that get the customer to talk about the value gap is the salesperson who will consistently outperform the salesperson with the best solutions.
Your job is to give the prospect the freedom to self-discover his problems, his consequences, his priorities and his willingness to act upon them. At the same time, you must assess the likelihood of change and balance it with your own investment cost of acquisition. Your job is to be a change agent: someone who takes a nonselling posture to help his customer understand the cost of change.
It becomes more important for your prospect to actually sell himself and, at a more advanced level, to sell you on his motive to buy from you. This is where sales becomes fun. All the traditional pressure is off you and is transferred to the client.
However, if the prospect is resistant to share information about his company’s value gap, here are some questions to get him to open up:
- You have been using XYZ for two years and you are happy with your service, so can you help me understand why you want to consider changing?
- Since price is your only motive to change, and we are never the lowest, do you still want us to provide a quote?
- I’m not sure if we can help you specifically or if we are a good fit for your company. Is it okay if we ask each other some questions and at the end of our meeting determine if it makes sense for us to proceed? And if it doesn’t, would you be comfortable telling me, so that I don’t waste any more of your time?
Follow up with additional qualifying questions:
- How long has it been a problem?
- What have you done to fix it?
- In relationship to other important initiatives, how does this stack up against them?
- What is at stake for the company?
- With or without us, how committed are you to making a change?
To make this change-agent sales methodology work for you, you must transition from a feature and benefit seller to a strategic seller. The objective of your sales call will now be to ask probing questions to understand your customer’s value gap, get the customer to open up and disclose why he might consider changing and, through skillful questioning, have the customer convince you that he has a problem that he needs you to solve. Your role as a change agent is to transition from telling and selling to helping customers identify their problems and better understand their consequences.
Rick Farrell is Vice President of Selling Dynamics, a national sales and development training company. He can be reached at rfarrell@sellingdynamics.com and at (781) 404-7915.
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NEWS
Research finds group brainstorming ineffective
Company leaders wanting to generate good ideas to build revenue or cut costs often call their team together for brainstorming sessions. But many brainstorming sessions get off to a shaky start because the participants subscribe to a tenet that is false: “There’s no such thing as a bad idea.”
The popularity of brainstorming results in part from the business world’s knee-jerk faith in teams and the desire to give everyone a voice. However, at the University of Texas at Arlington’s Group Creativity Lab, Professor Paul Paulus conducted research on the number and quality of ideas for four people brainstorming together versus four people brainstorming by themselves and found that group brainstormers typically perform at about half the level they would if they brainstormed alone.
Why is this? Group brainstorming often leads to self-consciousness, trying to impress the boss, company politics, criticism or just plain blathering for one’s own enjoyment. In addition, many find that creativity and its muse can’t be scheduled between, say, 9:15 and 9:45.
Group brainstorming can still be effective, but it requires careful planning, strong facilitation and suspension of ego of all involved. Consider asking participants to write down their ideas privately before and/or after the group session to get the best ideas. And limit the size of the team to no more than seven people or you risk ending up with “coblabberation.”
Source: Wall Street Journal, June 14, 2006
Study rebuts magazine engagement assumptions
If you’ve ever purchased magazine advertising, chances are your advertising rep was eager to show how much time their subscribers spend reading the magazine. The assumption is that highly engaged readers translate into better ad performance. However, a study suggests that ads in high-engagement magazines perform no better than ads in magazines whose readers pay a lot less attention.
Starch Communications Research conducted the study by dividing 25 magazines into high-engagement, low-engagement and middling camps, defining engagement by the frequency with which they are read, time spent with each issue and how much of each issue gets finished. When it examined the percentages of readers who remembered ads across magazines, it found no link between those scores and levels of engagement.
Publishers and media buyers said engagement is more complex than the study acknowledges, but the study’s authors said magazines should welcome the implications. New studies are being conducted to verify or rebut the results.
Source: Advertising Age, May 22, 2006
Are B2B websites chasing away customers?
It appears business-to-business (B2B) sites offer a less desirable user experience compared to consumer sites. According to a report from the Nielsen Norman Group (NNG), people using B2B sites accomplish what they set out to do only 58% of the time compared to a 66% success rate on consumer e-commerce sites.
The main problem is not enough focus on the customer. This results in bad site design that can cause prospects to downgrade their perception of a company. The elements of bad design and the resulting perceptions detected by NNG included: incomplete product description, which creates skepticism; overwhelming and convoluted content, which creates confusion; convoluted navigational structure, which causes prospects to lose patience; and pushy marketing tactics, which cause annoyance and distrust.
Lack of pricing information was also found to be a major problem because it’s the one thing that customers say they want the most and get the least. At a minimum, providing pricing levels, if not exact prices, would help move the sales process forward. In addition, the common B2B practice of requiring prospects to fill out lengthy registration forms to get access to deeper information is a lead killer. As the report says, “[It] can send sales prospects running.”
Source: eMarketer.com, June 2, 2006
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TRENDS
The big opportunity
Obesity rates in the United States have been accelerating since the 1980s. Today nearly one-third of adult men and more than one-third of adult women are considered obese. Just as the baby boomers have driven business and shaped the economy during the past half century, the plus-size population is likely to dictate marketing trends through much of the 21st century.
Who is this powerful consumer group? Forget old stereotypes: It’s not just people in low-income neighborhoods packing on the pounds at McDonald’s. Obesity rates are rising most rapidly among urbanites who earn $60,000 or more a year.
Already, greater girth is forcing businesses to rethink the way nearly everything is sold. The trend extends far beyond clothing designer Tommy Hilfiger and retailer Old Navy offering plus-size lines. For example, the new Toyota RAV4 comes with seats up to three inches wider than previous models, Select Comfort now offers grand king size mattresses that are 30% bigger than the traditional king and Steelcase, the world’s largest office furniture maker, now offers waiting room chairs designed for heavier builds.
Meanwhile, entrepreneurs are cashing in with new products and services such as Extend-Its.com seat belt extenders, the Big John toilet seat and the Butterfly Lounge in Orange County, Calif., one of many size-acceptance nightclubs popping up across the nation.
Marketing to the obese can be a delicate issue. Large customers want the market to respond to their needs, but products that reflect too much reality — that remind them that they are overweight — often bomb. At the same time, companies don’t want to be seen as enablers to an increasingly fat society. For some, the answer is to offer options for plus-size customers without directly advertising to them or even mentioning them; for instance, Toyota’s RAV4 is simply billed as “roomier.”
Source: Business 2.0, June 2006
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TIPS
- Trying to find new ways to grow your business? Look for these opportunities: 1) When customers buy a product or service, they’re trying to get a critical job done. Is your product or solution providing a complete solution, or are there related job gaps that your company can fill? 2) Who are the industry’s worst customers? Is there a way to profitably sell to these customers, such as “good enough” solutions at low prices? 3) What barriers hold back consumption by certain markets? Maybe the products are too expensive, require extensive training or are hard to access. Break down these barriers and you can expand the market.
Source: The Marketing Report, 370 Technology Dr., Malvern, PA 19355
- Does your new product or service pass the simplicity test? If your description is more than a couple of sentences long, you may need to go back to the drawing board. Most customers are in a rush and won’t read through several paragraphs just to figure out what the product or service will do for them. Sometimes the solution is simpler marketing copy; sometimes the product itself should be reconsidered. Test the product and the marketing efforts independently on impartial potential customers.
Source: www.smbiz.com
- Need to collect on a delinquent account? Often, the first delay tactic a debtor will use is the excuse, “I don’t have that invoice. Could you fax it to me?” Catch them off guard by having the invoice loaded in your fax machine, within your reach and ready to transmit when you call. As soon as you have your contact on the line, press send. The invoice will be waiting if and when they make the excuse. Even if they aren’t stalling, the timely fax can be presented as a convenience.
Source: Business Credit, 8840 Columbia 100 Parkway, Columbia, MD 21045
- The next time you want to persuade someone, offer them a cup of coffee. A new study suggests that caffeine makes us more open to persuasion when confronted with a point of view that is logical and well-argued. University of Queensland researchers asked participants their position on the subject of euthanasia. Next, half were served caffeine-laced orange juice and half were served regular orange juice. All subjects were then asked to read a position paper that ran counter to their beliefs. Participants who drank the caffeinated drink understood and remembered the counter-arguments better and were more in agreement with those arguments. What’s more, their changed views were unlikely to revert to earlier beliefs later on.
Source: www.latimes.com
- Help your staff retain what they learn. To teach people effectively, you’ve got to engage their attention in an interactive way, says renowned business psychologist Dr. William Glasser. By his estimates, people remember: 10% of what they read, 20% of what they hear, 30% of what they see, 50% of what they see and hear, 70% of what they discuss with others, 80% of what they experience personally and 90% of what they teach to someone else. The more senses you can involve in the learning process, the more effective training will be.
Source: Manager’s Edge, 300 N. Washington St., Suite 605, Alexandria, VA 22314
- Avoid this common advertising mistake. Many advertisers assume that if they make several offers in a message, at least one of those offers will appeal to each customer and the result will be a better ad response. However, research consistently proves just the opposite. For example, an experiment was conducted in which half of a customer list was sent an email containing four free service offers while the other half was sent an email with only one free service offer. The email which focused on just one service outperformed the other by 464%. These results coincide with many previous studies conducted with other media. So regardless of the medium, the golden rule still stands: one message with one offer pulls best.
Source: www.imediaconnection.com
- Get publicity for your company by being a contrarian. Since the media loves to rile their audience and spur debates, use this to your favor by going against the grain. Here are a few ways to do this: take issue with a survey result, disagree with a common belief, champion an underdog, make surprising predictions, expose flaws in something assumed to be beneficial or describe the underside of something popular. For example, when music marketing guru Bob Baker submitted a press release titled “What’s Wrong with American Idol?” that criticized the popular reality-TV talent show for misleading aspiring musicians about what it takes to succeed in music, he received five radio interviews that highlighted his status as an expert on careers in music.
Source: www.yudkin.com
- When exhibiting at trade shows, how can you attract attendees that are wary of being “sold to?” Consider leaving the booth unattended for an hour or so each day. Some attendees won’t approach a booth if it’s staffed, but they’ll come up and take material when no one is there.
Source: www.skyline.com
- Elicit change in employees with this four-step coaching process: 1) Acknowledge the truth. For example, if an employee missed a deadline on a report, come to a consensus on the facts before proceeding. 2) Analyze what happened without blaming. Try to understand the thought processes and decisions that led to the problem, e.g., “I missed the deadline because I took on too much work, but I didn’t want to look bad by saying I was swamped.” 3) Create an action plan. End the conversation with the employee saying something like “From now on I will do this….” 4) Develop a feedback process so you can follow up. In each step, it is important to be truthful. Most people would rather know the truth than be in the dark.
Source: The Managerial Moment of Truth by Bruce Bodaken (Free Press)
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