RETHINKING THE SALES CYCLE

How Superior Sellers Embrace the BUYING CYCLE to Achieve a Sustainable and Competitive AdvantageBy JOHN R. HOLLAND TIM YOUNG

The McGraw-Hill Companies, Inc.

Copyright © 2010 The McGraw-Hill Companies, Inc.
All right reserved.
ISBN: 978-0-07-163799-2

Contents

Chapter One

THE ODD COUPLE

A buyer and a seller make for a really odd couple. When you think about it, buyers and sellers should be highly compatible. After all, their relationship should exist solely because each party can help the other to get something it wants. A buyer may want something tangible—a new phone system, perhaps. A seller of phone systems wants the buyer to have the phone system, because the act of satisfying that need consummates a sale. Ah, and, conveniently enough, it is through this transaction that the seller earns her paycheck in the form of a commission. It’s also through this transaction that the seller’s company realizes revenue, which leads to increased earnings and, if well managed, increased shareholder value in the form of rising stock prices. And all of that can reflect positively on the seller, who may earn herself a trip to President’s Club or some other incentive program that her company has in place for top performers.

But something is wrong in the relationship between buyers and sellers, and has been for a long time. While both parties appear to have a common agenda, they are inherently focused on different outcomes, and each is suspicious of the other’s agenda. Buyers want to achieve goals, solve problems, and satisfy needs. Most sellers want (or are perceived by buyers to want) to sell something. Anything. Generally, they want to deliver the best combination of high price and quick sale so that they can move on to … the next sale. And they have an entire company behind them encouraging (pressuring?) them to do so for all the financial reasons mentioned earlier.

Why the disconnection between the two? The answer in this case is simple. Stereotypical sellers are perceived as putting the sales first and the buyer’s needs second. Repairing the relationship, of course, will prove to be more difficult and will take a lot of work. And this is not one of those relationships where both parties share equal blame. In this relationship, the seller is largely at fault and, as a result, must shoulder the responsibility for treating buyers in a more honorable way. Actually, we’ll go further than that and suggest that sellers’ organizations should accept responsibility for having fostered cultures focused on “driving sales” rather than on ensuring “great customer experiences.” After all, there are no incentive trips (to our knowledge) for salespeople who ensure great customer experiences.

In the buy/sell transaction, only one party’s compensation is tied to the transaction, and that’s the seller’s. And this is at the heart of the disconnection in the relationship. The seller has to make the sale, or she doesn’t eat.

Abraham Maslow, in his 1943 paper “A Theory of Human Motivation,” described five levels of human needs (see Figure 1.1). The theory is that humans must satisfy each level of needs before they can progress to the next level. Naturally, the most fundamental level relates to surviving. Can I breathe? Do I have food and water? Where can I find shelter?

In our modern business world, we meet many of our physiological needs by earning a paycheck. For better or worse, gone are the days when we lived off the land, built our own homes, grew our own food, sewed our own clothes, and generally provided for ourselves. Today, our paychecks allow us to pay rent or a mortgage (shelter), buy groceries (food), and pay the heating bill (warmth). This allows us to meet most of our physiological needs, so naturally we turn our attention to the next level, safety. Again, in our modern world, this is less about physical protection than it was a hundred years ago and more about protection of the things we have that allow us to meet our physiological needs—the house we rent, the ability to buy food, the clothes we wear, and so on. And what’s the one thing we must have in order to protect all of those things? Job security and a paycheck. If you’re a seller, you get that only if you are successful in making sales, and that’s not at all likely to change. Nor do we propose that it should. What we will propose in this book is a way to achieve an increased awareness of the needs, wants, and roles of each party and a set of behavioral changes, both individually and organizationally, that will result in not only increased sales, but, much more importantly, more positive customer experiences. And that’s the foundation of a healthy and mutually rewarding relationship.

The Buyer’s View of the Seller

Buyers’ relationships with salespeople run the gamut. A small percentage of sellers display extraordinary sincerity and competence. Buyers value their opinions and view them as respected advisors. In these situations, the buyer’s experience is outstanding, largely because the buyer feels that buying rather than selling is the focus. Unfortunately, the majority of relationships are more stereotypical, with buyers feeling that sellers are trying to push offerings onto them. They view salespeople as following the old adage of “when all you have is a hammer, everything looks like a nail.” Buyers have to deal with sellers who conduct themselves in this manner.

You can get a sense for a typical buyer-seller relationship by considering that many terms used by sales organizations are also used during military engagements: win, lose, campaign, beachhead, and so on. Sun Tzu’s The Art of War is required reading for some sales organizations and is referenced to devise selling strategies. Trite phrases are passed along in sales meetings that show blatant disrespect for buyers. The implication is that not only can buyers be manipulated, but they should be manipulated! Some typical phrases:

“Selling begins when the buyer says no.”

“Buyer objections are selling opportunities.”

“Winners never quit and quitters never win.”

“Don’t confuse the sell with the install.”

“Selling is learning the ABC’s: Always Be Closing.”

These attitudes and approaches contribute to the fact that for the last several decades, the buyer-seller relationship has been at best strained, and at worst broken. Contrary to common belief, salespeople are not entirely responsible. It may be in retaliation for having been “wronged” in the past, but there are occasions when buyers manipulate salespeople. One example is inviting sellers to bid on RFPs that they have virtually no chance of winning, yet that they will have to invest a lot of their time and their companies’ resources to respond to. The sole purpose of soliciting these bids is for buyers to gain negotiating leverage with the vendor that wired and will almost certainly be awarded the RFP. When asked, buyers tell other salespeople: “This RFP is wide open. Whoever has the best offering will win. If you can get your foot in the door, there are many upcoming requirements. We’ve heard good things about your company and look forward to seeing your bid.” Buyers suffer no pangs of regret when they lie to salespeople. Turnabout is fair play.

Through the years, buyers of business-to-business (B2B) offerings and services have controlled the beginning and end of sales cycles. Buyers decide whether or not they are willing to meet with or take a phone call from a salesperson. When issuing an RFP, the vendors that can bid are by invitation only. Buyers also control the purse strings by deciding whether to buy and then selecting which vendor at the end of the buying cycle.

Perhaps because they resent this control, sellers display some of their most aggressive and obnoxious behavior in these two parts of the buying cycle. They are persistent in trying to gain access despite obstacles (gatekeepers, unreturned voice mails, and so on). To buyers, these efforts may appear more along the lines of stalking than of prospecting. Sellers also have a reputation for saying whatever is necessary to get prospects to part with their money at the end of the sales cycle by utilizing high-pressure closing techniques.

The Quest for Control

Despite these conflicting agendas, there is one area where buyers and sellers can agree. When asked to define selling, even though the parties are on opposite sides of the desk, they use the same words and phrases. Their descriptions include elements of conflict or confrontation:

• Convincing

• Persuading

• Handling/overcoming objections

• Manipulating

• Haggling

We’re not sure how this definition came to be, but unless one or both sides modify their views and behavior, buyer-seller relationships aren’t going to change anytime soon.

Later in this book, we’ll offer an alternative definition of selling that can be a first step in reducing buyer-seller tension, but for now we hope you agree that the lines are clearly drawn. Buyers view selling as something that is done to them rather than for or with them. The predictable result is that buyers don’t like to be sold and prefer to avoid talking to new salespeople. Until recently, however, when considering complex offerings, buyers had no choice but to engage with salespeople.

The reason for this is that prior to the Internet, B2B selling organizations exerted control over information. If buyers wanted to learn about the latest offerings and industry trends, they had to schedule sales calls. If several buyers within an organization were interested, a presentation could be arranged so that the group could learn about what offerings were available in the marketplace. Salespeople took these invitations for granted, but they gave the seller a significant advantage. They allowed salespeople to be involved during the very early stages of the sales cycle. Buyers were blank canvases, and therefore salespeople had significant influence in determining or shaping their requirements. Competent sellers were able to do this with a bias toward their offerings to make things difficult for any competitors that might be brought in later.

Whether you are grading salespeople, carpenters, lawyers, or consultants, a general rule applies: about 10 percent are exceptional, 80 percent fall within a vast middle range, and 10 percent either are or border on being incompetent. Why is there such a pervasive negative stereotype of salespeople? It probably stems from prior negative experiences during business-to-consumer (B2C) interactions before people rose to positions in companies and got involved in B2B buying decisions.

Think for a moment and recall some of your most unpleasant interactions with salespeople. Some are so bad that people who otherwise wanted to buy couldn’t do so because the seller was so pushy or obnoxious. That is how strongly a seller can affect a buyer. Out of ten sellers you deal with, if nine are okay or better, human nature is such that you remember the worst one. This is the major reason that the pervasive negative stereotype of salespeople exists.

We wanted to provide a few representative examples of regrettable buying experiences.

Buying a First New Car

A year after starting his first real job, Sam decided that it was time to get rid of his old car and realized that, for the first time, he could afford a new car. He visited a dealership to choose the model, determine the options on the car that would fit his needs and budget, and place an order. The car he was replacing had over 140,000 miles on the odometer, and the salesperson suggested that he sell it privately because it would be difficult to give much of a trade-in allowance for it. That prompted Sam to ask when the new car would come in, and the seller indicated that it would be delivered in six weeks. Sam asked a second time, telling the salesperson that he was not in a rush and would be willing to wait longer if necessary. The seller gave him his word that it would take six weeks.

A month later, Sam called to explain that he was going to begin the grim task of placing an ad to try to sell his old car and wanted to verify the delivery date. The response was that in two weeks or less, he’d be driving the shiny new car. After meeting numerous sketchy people and suffering through a few harrowing test drives, he found someone who was anxious to buy the car, agreed on a price, and placed a deposit. He waited a full week past when Sam had told him he could have the car, but finally he couldn’t wait any longer. Sam apologized profusely and refunded his deposit.

The new car arrived ten weeks after the delivery date that had been confirmed three different times. When he was told that the car was in, Sam explained that in light of all the trouble he had gone through, the salesperson would have to take his old car for something approaching what he had it sold for, only to have the sale fall through. The seller mumbled that the dealership would step up and do the right thing, so Sam test-drove the car and was delighted with it.

At this point, the salesperson told him that there had been a price increase and that the dealership couldn’t honor the original purchase price because it would lose money. Sam quickly recognized a transparent attempt to manufacture a trade-in allowance on the old car and was infuriated. He told the salesperson to do something with the new car that was physically impossible and stormed out of the showroom.

Within a day, Sam found a used car that was a much more attractive option and bought it. The salesperson from the dealership called the next day to try to smooth things over. He was willing to honor the original price and give a trade-in allowance. Once again Sam reiterated his advice about what to do with the car.

Buying any car, especially your first new car, should be a joyful occasion, but a pushy, obnoxious, or deceitful salesperson often finds a way to rain on a buyer’s parade.

Buying a Big-Screen TV

To better understand a buyer’s view of selling, imagine visiting a retail store to buy a new television when you have limited knowledge about what’s available. A clerk approaches and asks: “May I help you?” Despite the buyer’s desperate need for assistance, the most common answer is: “No. I’m just looking.” Why do buyers respond this way? They distrust salespeople who haven’t demonstrated that they are different from the negative stereotype. They don’t want their decision to be influenced by sellers who may not have their best interests at heart. By the way, this may be a completely false concern in that many sellers are making an earnest effort to help you determine what you need. Having said that, everyone who has been burned before carries that experience into each encounter with a new salesperson.

After a frustrating 15 minutes of wandering through the store looking at TVs, you leave, feeling more confused than enlightened. (How big? LCD? Plasma? Projection? How do I decide which one?) When you return home, a neighbor hears about your experience and gives you a copy of the latest Consumer Reports with evaluations and recommendations of new televisions. You read the entire article and determine that a 46- inch, LCD, 1080p, JVC television is the best option available for what you want to spend. You are comfortable with your decision because you believe that Consumer Reports is a competent, unbiased source that has no financial interest in or potential gain from whatever decision you make.

Armed with this knowledge, you revisit the same store and are approached by another clerk, who asks: “May I help you?” This time, you respond: “Yes. I want to buy a 46-inch, LCD, 1080p, JVC television.” Why is your response different from that on your initial visit? You know what you want, and you will not have to be subjected to a salesperson’s efforts to influence your requirements. With this knowledge, you view the seller’s role as that of a buying facilitator—someone who is going to help you buy what you have already determined is best for your needs. Potential buyer-seller tension is minimized unless the seller tries to talk you out of the decision you’ve made. Having said that, despite the seller’s touting the great reliability of the TV you choose, be prepared for the attempted upsell of an extended warranty.

Human Buying Behavior

Just as they have for air, water, food, and shelter, humans have an innate desire for control. When they are buying, people are in control. They set a budget, decide what their needs are, and take action to satisfy them. Buying feels good! Being sold means that a salesperson with a financial incentive is attempting to convince, persuade, or influence your decision. Buyers who have been taken advantage of, manipulated, and pressured in the past don’t want to allow the seller to be in control.

(Continues…)

Excerpted from RETHINKING THE SALES CYCLEby JOHN R. HOLLAND TIM YOUNG Copyright © 2010 by The McGraw-Hill Companies, Inc.. Excerpted by permission of The McGraw-Hill Companies, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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