Friday, March 18, 2011

Commoditization Your Problem?

Do you sell corn, or sweet Jersey corn? Do you sell potatoes or Idaho potatoes?

Has the commoditization of your product or service got you down or is your inability to differentiate it from the pretenders holding you down? A few days ago, WCBS-AM Newsradio in New York, aired a feature by Ray Hoffman of the Wall Street Journal. Mr. Hoffman was reporting the thoughts of the CEO of Priceline about the complaint of commoditization, and its painful effects on profits.

The answer offered...differentiation.

Look, you sell either a piece of meat or sirloin, a bushel of wheat or a bushel of super fine, no toxins Kansas wheat, cars or Cadillacs.

You hit and run, or you are there every step of the way with your client from order to renewal. You sell "as is" or "satisfaction guaranteed or your money back." You make a difference in his success potential or it's "every man for himself."

If your product or service is above the pack, and especially if you own that reputation and it's verifiable, you can't be commoditized. You're different, unique and uncommon and so "Please Mr. Jones, may we discuss the value to you that I bring to the table? Because I promise you, it's very different than those you are comparing me to--like apples and...."

Here's a letter that one of our well trained, genuine and talented managers received just this week from a client:

From: Dawn M Richardson
Sent: Monday, March 14, 2011 1:06 PM
To: 'Tim Miller'
Subject: RE: Tim Miller Calling

Tim, I must tell you that I do believe that you are on my side. I don’t believe that I’ve just begun working with you but I have made a friend too. I appreciate your sincerity and honesty. I look forward to a long working relationship with you...

My guess is that Tim's price will be discussed, but without reference to another guy's price, because the other guy is not Tim. He's different, not a commodity.

Great Selling!

Love Your Work and Work Tirelesly
Communicate Honestly and Fearlessly
Serve, Don't Sell
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Tuesday, March 8, 2011

Great Sellers are Great Forecasters; Great Executives are Great Forecasters too!

So there you are Mr. Responsible for the P&L Executive at the beginning of March. You take a look at year-to-date 2/28 numbers and you are off your revenue budget. Several totally unpredictable events have cost you revenue. Maybe two sales executives resigned to start their own venture. Maybe a severe weather period slowed down industry activity in your area. Fortunately you are not so far off that the full year budget appears unachievable, but if truth be known, you think good luck will have to play a part. Too bad there aren't EVPs of good luck.

It might have to be luck because in preparing your revenue budget for the year you've identified every potential revenue stream and put a number against it. Let's see, core customer renewals and upgrades, new business targets, additional products and or services, etc. You are an experienced budgeter so your plan is probably all inclusive. Well, prayerfully, now that you're in the hole, you'll be able to think of something new.

And this is where your forecasting acumen comes in. You take a good look at the rest of the quarter's prospects and you pick an absolutely "can do" number. This number can be neither aspirational nor doomsday. Rather it must be borne of a deep look at your sales team's pipeline, one-on-one meetings with your sellers and a thoughtful and realistic review of the past forecasting performance of these sellers. You must apply a rational degree of confidence percentage to their forecasts.

How do you accomplish that? First, you challenge each account in the pipeline. "What have you proposed and to whom at this account? Was the decision maker a participant at the "close?" When did you see him last? Did he agree to the specific price level you are forecasting or did he say he would decide which plan and get back to you? When did he say he would act?...."

And then...the Great Executive Forecaster pulls out each individual sales reps' forecast history sheet (you have them, don't you?) to help gauage the seller's reliability.

You are now in a position to make a professional, informed forecast...and uh, oh.

It's mostly fear of the "uh, oh" that poisons accurate forecasts; fear on the part of average sellers and average managers alike. Here's what happens when that fear is converted to "can do, will do" by the Great Ones.

They come together and help each other get it done! "Joe, among the seven accounts you believe can close this month, two appear to carry the meaningful revenue load. Let's call/see them together ASAP to see if we can close the deal. With respect to client A, if you think that could get him to move today?"

Now the session above does two things: First it gives the Great Ones the best shot at maximizing the short term results. But let's assume your researched, pro-active challenging and helping still leaves your now professional, and therefor probably near perfect forecasting, short for Q1. Now it is "What can we change, add, invent that will drive incremental revenue over the next nine months to cover our projected shortfall?" This is your new, probably top priority exercise. Do it well, and with a little additional luck, you'll crash through your budget.

Great Selling!

Happy to answer questions

Love Your Work and Work Tirelessy
Communicate Honestly and Fearlessly
Serve, Don't Sell
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