My first sales job was at a teleconferencing company selling dial-and-pin conferencing minutes. We were brand-switchers – so when prospecting, we were looking for companies who already used conferencing with BT or Intercall or Powwownow. If a company was already using conference calls, we wanted their business.
Following that, I moved on to selling agency project management systems for estimating jobs, managing schedules and logging timesheets. This kind of technology was still reasonably new back then and often, I’d have to explain the concept of automated project management for people who were still using spreadsheets and job bags.
It struck me that there’s an important distinction between these two types of sales: Commodity or concept. Are you looking for customers who are already buying products and services like yours or are you selling a brand new idea?
Understanding this distinction can have a powerful effect on how you manage your sales process and how your potential clients make decisions.
When you’re selling a commodity, your prospective customer is already going to be buying this product and service from somebody. This means:
- There will already be a budget flying around. They’re going to spend the money, so why shouldn’t they spend it with you?
- Qualifying your prospects becomes easier. Are they already buying your products/services from someone else? If no, move on and if yes, add them to your target list.
- Sales becomes a numbers game. There’s an available market for you to go after and if you knock on enough doors, you’ll win some business. This makes planning and forecasting easier, knowing that for every four ‘no’s you’ll get a ‘yes’.
- You’re probably operating in a busy, competitive and possibly saturated market. What can you possibly do to stand out?
- You can get stuck on the ‘competitive pricing’ merry-go-round. When there’s lots of competition, bad salespeople resort to dropping their prices, knocking the available margin out of good sales opportunities.
So if you’re selling a commodity, focus on:
- Where your service can add value rather than trying to be competitive on price. Find out what your prospects are missing with their current service provider, or where they’re struggling. What can you offer that’s different and better?
- Evidence of ROI (return on investment.) Try and get your hands on analytics from your previous client work or run your own dummy project so you can collect data to prove how much your prospect could gain.
- Stand out by being more knowledgeable and innovative than your competitors. Be a subject matter expert; write opinion pieces for industry publications. Commission some research. Run an event discussing industry trends. Make a noise and make sure you’re at the centre of it.
If you’re selling a concept, the benefits and challenges are going to be different:
- If it’s a brand new concept, the competition will be much smaller – or even non-existent. Once you’ve identified the market, it’s all yours.
- You’re new, innovative and exciting. If you can get prospects on board with your idea, you’ll be a trailblazer
- You might have an existing product or service, which you’re selling to someone who’s never used it before – in which case you’re selling a commodity item as a new concept. You should have plenty of evidence to prove the available return on investment.
On the other hand:
- A new concept represents risk to a buyer. It represents time spent managing change in their organisation and a cash investment without promise of a return. It’s safer to stick to what they know and wait until someone else takes the plunge first.
- They almost certainly won’t have a budget and will have to build a business case and raise funds from somewhere.
If you get an opportunity to pitch your new product or service, remember that you came up with the concept in the first place to solve a real life problem for your customers. If prospects aren’t already aware of the problem you can help them to solve, you need to focus on creating the need. Without a need, a prospect won’t buy.
- Get to the heart of what keeps your prospect awake at night. Ask questions about what’s holding them back, or what they’d like to see more of in the business.
- Gain leverage by finding out the impact of not solving their problem – what’s at stake for them?
- Ask your prospect what they could gain from fixing their challenges – what’s the potential return/reward available for themselves and the business?
- When demonstrating and discussing your product or service, keep in mind the challenges that need to be addressed and focus on the key features that will solve a problem for your prospect. For every feature, refer back to the benefit – help your client to understand the relationship between what you’re selling and the return they’re going to receive.
For more on how to create the need and make more impact in your sales pitches, join us for “Business Development – What’s the Big Deal” coming to a city near you in 2018.