A great many Business Plans fail to attract financial support from bankers, investors and potential customers because the owners have not truly understood the function as well as the concept of selling. Sales is not a process where one party tells another lots of ‘stuff’ about their product, service and company. Professional selling is far more a process of intense listening followed by persuasive dialogue that directs the prospect to establish the benefits they will reap from purchasing your products or services.
What the guru of selling Alfred Tack described as the “persuasive communication against resistance.”
One of the most frequently ignored fundamentals regarding Business Planning and forecasting is understanding successful selling techniques and processes. It starts from a benchmark of knowing your product or service in detail; and most importantly, understanding how prospective purchasers will see and value it; what is relevant to the customer in terms of it’s features and resultant benefits to the user. Some added confusion has arisen from the common mis-understanding of the 1940s American acronym USP. It is not a unique selling point ! the ‘P’ stands for proposition, meaning the entire sales proposal. Too often businesses have arrived at their markets with a different feature to an existing market offering and not understood why their apparent USP hasn’t been recognised, valued and purchased – D’oh !
In addition, there is much confusion regarding what makes a successful sales person. In the past 40 years I have directly trained just under 500 professional sales people. They have come to me from all intellectual and educational backgrounds. They have emerged from the ranks of the long-term unemployed to the legions of career sales people and sales management. They have spread the full cultural palette and have lived or worked in diverse economies; from communist Poland in the 1970s, socialist France, dictatorial Guinea, tribal democracy in The Gambia, class ridden democracy in the UK to urbane multicultural democracy in 21st century Australia.
Yet I have never met a successful ‘born sales person’. I know many people who can talk the hind leg off a donkey, and others who think they can bludgeon customers into submission; and many former ‘double glazing’ salesmen who sell product by staying in their prospect’s face for hours on end. The ‘war of attrition’ form of sales person – or ‘oxymoron’ figuratively and ironically. There is a vast chasm of difference between the amateurish thrusting of product in front of prospect’s faces and the professional approach that binds customer and seller in a long term and mutually beneficial relationship.
Good selling is about far more than exchanging your product or service for the highest yielding margin. The costs to any business of getting to that first purchase by a customer are very high; so it is an extremely wasteful tactic to pursue all sales trying to fleece the maximum yield from each sale. Customers caught by this tactic rarely return for a second purchase. The costs per unit sale to each repeat purchase diminish rapidly and should encourage sales/customer bonding. It should be a mutually beneficial transaction. In addition, happy customers who are nourished by the entire sales experience, feel wanted and special. They are the customers who will refer you on to others, reducing the costs of those on-sales too.
It therefore follows that unless the business owner understands selling and the ‘value proposition’ being put to their customers, they cannot forecast sales growth or volumes accurately. Planning returns to guesswork and fails to secure stable growth.
I have long argued there are 4 simple keys to understanding and planning sales. From these realistic forecasts can be drawn financial growth plans. Without achievable sales you only have a spending plan or ‘hole in your bucket’ as many bankers refer to unrealistic financial forecasts. These keys assume the business has carried out stages 1,2 and 4 in constructing the Business Plan and testing the product use with real users.
4 simple keys to successful selling KLAR :
• Knowledge – understand and define your product or service into it’s constituent parts or features; size, weight, power, energy consumption, duration etc. Then extrapolate from each feature the potential benefits any user will gain from these features. It is important to recognise that customers buy solutions and experiences, buying is an emotional response to their need. The sales task is to address those needs, both actual and emotional to the perceived satisfaction of the prospective customer.
• Listen – prospects will commonly tell the sales person how they have previously used or experienced a similar item. They may offer anecdotal evidence of use by others. Delivery, aftercare etc all form part of the ‘offering’. Do not contradict the prospect simply clarify claims or statements that are not clear to the seller or are based on assumptions by the prospect. In trying to clarify their position the salesperson will identify more clearly the solution the prospect is seeking. Answer customer questions clearly, truthfully, directly and succinctly from the positive perspective, avoid agreeing to a negative viewpoint.
• Absorb – re-phrase the customer view and show you have understood and accepted the validity of the prospect’s perception by holding up the mirror to their statements. Enhance this empathy by describing your offering in terms of the feature driven benefits that directly relate to the customer’s statements. This allows the buyer to see the benefits of your proposition in terms specific to their needs and their values. This is an honest approach to problem sharing and solving that binds buyer to seller.
• Resolve – address the customer’s expressed concerns, do not challenge or attack the prospect’s values. Positive communication results in positive and predictable outcomes.
Sales forecasts must be based on achieving customer satisfaction. Remember, selling should be a dialogue of indefinite, continuous duration; not hectoring or a diatribe against existing products or providers. Realistic projections and rates of sale can then be calculated, entered into the financial models and be believable.
This extract is taken from my weekly blog on how to research and construct a meaningful Business Plan.
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