CHAPTER TEN

Selling, Selling, Selling

I NEVER SET OUT TO be in sales; in fact, I deliberately avoided it. I wanted to be an entrepreneur, and I never included sales as part of that vision. It turns out that I was dead wrong. Selling and entrepreneurship are practically synonymous. From the first moment I began formulating TRC all the way through to my exit, I found that I had to sell—and that I really liked it. Selling isn’t just about ringing up a product sale at the register; it’s about strategy, influence, and positioning. Learning to sell effectively will draw upon (and develop) some of your greatest skills and attributes as an individual and as an entrepreneurial leader.

Everything you do as an entrepreneur, from idea to exit, involves selling skills. In the Idea phase, you had to sell your ideas to those who were willing to listen and give valid feedback. At Startup, you sold your idea and the virtues of your company to potential investors, creditors, employees, vendors—and even to family and friends. As you made your pitch, each of these people and institutions was taking stock of you in order to judge the validity of your idea and your ability to bring it to life as a viable and valuable entity. In the Running phase, you will have your greatest sales opportunities and challenges, as you work to sell yourself, your product, and your firm to an ever-expanding base of stakeholders.

In this chapter, we’re going to take a close look at the fundamentals of sales—any kind of sales, in any kind of organization. I’ll offer you my own “formula” for successful sales, along with some key ideas for developing a sales culture throughout your business.

Finding the Right Formula: The Sales Maxim

I’ve practiced sales for many years and studied various best-practice sales methodologies. As I said, I like sales, but I also understand its critical role in growing the organization. So, I wanted to learn everything I could about developing my own talent for selling and about instilling a sales-oriented culture throughout my company. Volumes have been written on the topic of selling, but in the end, I believe that I can express every key principle of sales in one simple statement. I use this statement as the launching point for training my sales teams, but I also use it as one of the guiding principles of my operation. I call it the Sales Maxim, and here it is:

Sales = Confidence = Knowledge = Customers and Product

Like the E-Formula, the Sales Maxim serves as a simple representation of the essential elements of success: in this case, success in selling. It does not matter what you sell—a product, a service, an idea, a plan—this maxim holds true. Over the years, in studying sales representatives with strong performance and those who were struggling, I’ve always been able to track their strengths or weaknesses back to the elements laid out in the Sales Maxim. Now, let’s take a closer look at each of those elements.

Sales = Confidence

For years, business writers, classroom instructors, consultants, columnists, and managers have said that you have to be confident to succeed in sales, but what does that mean? In my book, a confident salesperson is one who can pick up the phone to make the cold calls, knock on doors, or network to establish relationships. A confident salesperson moves comfortably into uncomfortable and unpredictable situations, can discuss a variety of issues with a variety of audiences, and always is ready to answer questions and offer solutions. Above all, a confident salesperson takes chances.

No, I’m not talking about the stereotypical slick-haired salesman who talks loud, swaggers when he walks, and wears an open shirt and gold neck chain. In fact, the kind of confidence that excellent salespeople exhibit has nothing to do with attitude, fashion, or false bravado. Instead, sales confidence stems from a belief in your ability to respond to the situation at hand by offering the ideas and outcomes that meet expectations, offer solutions, and build trust. In other words, you must have confidence in your knowledge and your ability to use it. By achieving a level of superior knowledge and understanding, you can enter any sales-related situation with conviction that you will be able to address all potential outcomes. That’s the kind of confidence that translates into strong sales.

Confidence = Knowledge

Knowledge instills confidence. Well-trained salespeople don’t have to artificially pump up their self-confidence in order to go out and land the sale. They master their content, and then their confidence grows naturally. Knowledge-based confidence is the number-one performance accelerator for any employee; a lack of it will kill sales. The costs related to turnover and poor performance of account managers can often be traced back to knowledge gaps.

The key to creating a great salesperson is to focus on knowledge building. For some time, business analysts have recognized that knowledge building is the key to creating a great sales staff, and that’s why companies invest so much in training and development. Unfortunately, lots of those businesses fail to understand the ongoing link between knowledge and successful performance; as a result, they don’t manage with that link in mind. Knowledge comes through experience and education. That’s why everyone within the organization must constantly be building knowledge, not just to improve their own performance, but to grow the organization. In selling your business and its products or services—both internally and externally—knowledge and the confidence it builds are your greatest tools.

Knowledge = Customer and Product

Knowledge in every form helps build confidence and skill, but when it comes to sales, customer and product knowledge is what matters (understand that when I use the term product in regard to the Sales Maxim, I’m speaking of any product, service, or other business offering). When a salesperson develops a broad and deep understanding of what the organization is selling and who is buying it, that individual can walk into any situation and sell effectively. Knowledgeable salespeople can work through any sale without breaking a sweat or compromising their personal style.

I hired many sales representatives at TRC, and subsequently, I had to let some of them go. After years of training, mentoring, and managing my sales team and the sales process, I came to realize that in most cases the sales reps who didn’t work out were those who simply never developed a full command of the company’s product and customers. That’s when I developed the Sales Maxim and began using it to screen and train my team.

Many businesses develop detailed profiles of their customers to add to their bank of customer knowledge. One of the simplest profile models divides customers into quadrants, ranging from high-profit and low-resource requirement customers (those who deliver the most rewards to the organization for the least investment) to low-profit and high-resource commitment customers (those who deliver the least rewards but require the largest investment). As you can imagine, high-profit, low-resource customers are the most desirable for any organization. This profiling model allows managers to focus on their best customers, work to improve those in the middle, and (perhaps) jettison the worst. This model doesn’t, however, do a great job of assessing the degree of influence a given customer exerts on the organization, its marketplace, or the industry.

Although every organization may have its own way of looking at customer influence, in general you can think of it as the customer’s act of promoting or advocating for your business. Your customers may recommend new customers to your business, encourage vendors to partner with you, direct funding to your company, or serve as your general promotional platform. Influential customers will tend to draw more of your resources. You have to remain acutely aware of this so you can accurately determine the return on that resource investment.

Your organization’s management and leadership must also command a deep knowledge of your customers in order to evaluate whether influential customers really are influential, or whether your organization merely perceives of them as such. It’s not uncommon for an organization’s management and leadership to create a false sense of influence around a given customer. That’s a real problem, because those areas of the business also allocate its resources. The old “customer is always right” motto can contribute to the misperception of a customer’s influence, regardless of the customer’s actual position in the profiling quadrant. Customers who are low revenue and extremely demanding of resources often yield no influence in terms of attracting new customers, suppliers, partners, or funding. Still, if management has adopted a one-size-fits-all mentality, it can fear losing even the worst customer. As a result, sales teams might be directed to pull limited firm resources from the entire customer pool and improperly allocate them to the false influencer, rather than to true influencers and high-profit customers. If any customer—even a high-profile Fortune 500 firm—doesn’t bring in solid, positive benefits in proportion to the resources they demand, then they probably aren’t an influential customer. To know that, you have to know your customers, what resources they demand, and what benefits they produce.

Many squeaky wheels are low-volume, low-profit customers that demand high maintenance—resources that could better go to other customers. This kind of nonproductive resource drain can go on undetected and unappreciated by management for some time and may get progressively worse. As an entrepreneur, founder, and leader, you need to be aware of the makeup of your customers and their effective degree of influence, and then make sure your business allocates its resources accordingly. Failure to appropriate resources to the best and truly influential customer segments will result in profitable customers leaving your firm in an exodus you don’t notice until it’s too late to reverse.

Product knowledge is tightly integrated into customer knowledge and expressed concisely through the value proposition. A company must obtain intimate knowledge of why its target customer wants or needs its service. A product with fabulous features and functionality won’t be purchased if customers don’t believe it addresses their particular need or solves their specific problem. This seems simple enough—yet many businesses fail to conduct the necessary research to gain this insight. Instead they create a product or service based on intuition or assumption. Mastery of your product is key, but applying how that product addresses customer needs and pain is essential.

A QUICK GUIDE TO ESSENTIAL PRODUCT AND CUSTOMER KNOWLEDGE

Every business has its own, sometimes highly customized, pools of product and customer knowledge. But the following guide quickly outlines the important topics that are common to the essential “knowledge bank” for any sales or management team.

Know Your Product

• Features & Function

Understand what problem the product solves.

Understand what need the product answers.

• Comparison & Differentiation

Understand the product’s strengths and weaknesses alone and in relation to competitors.

Understand the competition’s strengths and how to minimize them in the eyes of the customer.

Understand the competition’s weaknesses and how to exploit them in the eyes of the customer.

• Production & Support

Understand how the product is made, delivered, and supported by the company.

Understand how the customer is involved with the product from purchase, to delivery, to deployment, and through its life cycle.

• Position

Understand what opportunities your product provides the customer.

Understand the threats your product removes for the customer.

Understand why customers do and don’t buy your product or service.

• Benefits

Understand the pain points your product resolves or may create for the customer.

Understand how your product helps your customer make or save money, or if it is an expense.

Know Your Customer

• Position

Understand the type of customer you are engaging.

Understand your customer’s influencers and decision makers.

Understand what motivates the buyer.

Understand what their job is and how they do it.

Understand who the ultimate end user is.

• Function

Understand the purpose your customer serves to their customers.

Understand why your customer exists.

Understand the nuances of your customer’s market segment.

• Utility

Understand why your customer would want your product.

Understand how your customer will use your product.

Understand why your customer uses competitive products.

• Structure

Understand your customer’s decision and authorization process.

Understand your customer’s buying procedures.

Understand your customer’s financing.

Understand the closing cycle and how to influence it.

Adding It All Up

Understanding the Sales Maxim is important for you, your management teams, and your sales groups because it’s an important tool for self-assessment and improvement. Struggling sales representatives aren’t always able to articulate why they are failing, and the reasons may not be apparent to you, either. Understanding that most performance deficiencies can be linked to gaps in product or customer knowledge can help sales staff and management find ways to pinpoint and correct those problems. Senior account managers whose performance has flatlined can benefit from some intense study of customers and products as well. After all, even the pros need refresher courses.

Information about your product and the customer may change over time, so you and your sales and management teams need to continually monitor customer data. By keeping everyone in your organization up to date on product and customer knowledge, you will not only breed successful sales representatives, but you’ll also position your product development efforts for ongoing innovation. The elements of the Sales Maxim form the basis for launching a new business as well as for maintaining an existing one. Use these elements when writing your business plan, pitching your company for funding, negotiating terms with suppliers, hiring employees, or securing a lease. By encouraging you to thoughtfully put yourself in the customer’s shoes and master the role of both buyer and seller, the maxim can help you differentiate your firm and maximize its value.

Remember, just about everything you’ll do as an entrepreneur involves selling, but the Sales Maxim isn’t just for entrepreneurs; it was originally formulated to assist in training new account managers, and its purpose is relevant to everyone in the organization. Time and again I have seen key personnel at small and large corporations fail at the fundamentals of selling—this includes supposed top performers, too.

Effective sales training, like sports training, is centered on fundamentals. Everything else can be built off of that foundation. Too often, businesses inundate new hires into their account management teams with too much information, too soon. The fundamentals of customer, product, industry, and marketplace knowledge can get lost when a new hire is drowning in a sea of information about CRM and ERP systems, internal procedures, communication tools, and methodologies. Seasoned account managers, often those with assigned and mature accounts, can become complacent in practicing their skills and fundamentals.

When a new account manager is turned over to the sales manager, there is a sense of urgency to get the recruit into the field selling. This is when one of three things happens: the new recruit does well, takes time to ramp up, or struggles. My goal in developing and using the Sales Maxim was to minimize or avoid the latter two outcomes.

New account managers typically won’t tell their manager why they are not successful because they either don’t understand the underlying reason or they are embarrassed, feeling pressure that “they should know this by now” based on the training they’ve received. Their struggle can often be pinned to their confidence to engage a customer and represent the product. Management equates this as a bad hire, believing the struggling person simply shouldn’t be in sales. That may be true, but it also may be that he or she lacks confidence, because that person lacks knowledge about the company’s products and customers. I am convinced more account managers can ramp up faster and be more effective when they and their management follow the Sales Maxim on a daily basis.

Selling Your Passion

A sales career is one of the greatest professions anyone can pursue in business. Successful salespeople have to draw from a wide skill set that includes comprehension, writing, speaking, listening, observing, presenting, organizing, calculating, understanding psychology, and translating body language. Harnessing these talents to a well-positioned strategy can provide great professional rewards and accomplishment.

So why is it that sales is such an underappreciated department in so many companies? It most certainly has to be one of the most important areas of any organization since it represents the closest link between the business and its customers. The sales team intimately delivers the company’s mission to its customer; it fuels R&D and all other aspects of the organization. In my eyes, sales is on the top of the pyramid; all other aspects of the company, including the executive branch, exist to support the efforts of sales.

If you don’t appreciate your company’s sales team, its efforts can become strained and inefficient, its staff distracted and off task. A companywide mindset that fails to include an appreciation for the value of sales can ultimately help create the departmental silos that slow performance throughout the organization. Your business might be running great at 10 percent annual growth, but is it possible that it could hit 15 percent, if sales were fully appreciated and understood? I’m a great protector of sales teams, as all too often I’ve seen organizations unconsciously erect barriers to sales efforts and ignore the frontline reconnaissance that only sales representatives can deliver. And I don’t just appreciate salespeople; I’m one of them. No matter what role I fulfill in the organization, I am always one of its most committed salespeople.

Shortly before the dot-com bubble burst, I was trying to come up with a way to sell Microsoft Select licensing. As you may recall from my recollections in an earlier chapter, I had obtained this software license authorization for my former employer, which gave it large account resellers (LAR) status and, along with it, a significant competitive advantage. Now, I needed to find a way to enable TRC to sell Select licensing.

I partnered with an existing LAR that had no focus on education, with the agreement that TRC would act as a broker to sell the Select licenses to our customers at a marked-up price. The schools would make their purchase orders out to the LAR, in care of TRC, and the LAR would fulfill the order. Aside from a variety of operational issues on the LAR’s side, this worked well. Selling Select licenses created incremental revenue for TRC and helped expose us to a level of sales traditionally reserved for the biggest dealers in the country.

Since we were selling the licenses at a higher price than the LARs, we had to be able to provide more value to our customers. This necessity led TRC to innovate the way we addressed procurement, fulfillment, compliancy, and the administration of volume software licensing for our customers. We exposed all of the weaknesses and pain points associated with those four key components of software licensing that the other LARs tended to ignore. We developed value-added services and features on our website and in our sales and customer service processes, which resonated with the licensing administrator who was our customer.

As I architected TRC’s new website, I incorporated these customer needs and our unique answers into a functional response system. By integrating the website into our ERP system, we could do some pretty amazing things related to enterprise software licensing. Volume software licensing was (and still is) complicated, as every publisher has a different methodology for providing volume discounts on its licenses, license maintenance, and license upgrades—not to mention the variations of licensing options like annuity, perpetual, and concurrent. All of our competitors were using a non-dynamic catalog; if customers searched for Adobe Photoshop in licensing, they would get hundreds of SKUs back as search results. This made buying volume software online virtually impossible. Our competitors viewed this as the way it had to be and as the customer’s problem, not theirs. They were right; it was the customer’s problem. That made it my problem, too.

The system I designed at TRC categorized publisher SKUs in a hierarchical fashion that enabled users to make increasingly more granular decisions based on their own criteria. Further, the system recognized users at login and immediately showed them specific SKUs based on past purchase history, which was tied to a specific software agreement or customer type. Our system would know, for instance, that a customer was an academic Adobe CLP, level-C customer, and we would only show this customer those applicable SKUs. Not only did this help our customers, but it improved the speed and accuracy with which our own sales team generated quotes and processed orders. TRC had not only automated the complicated volume software license process but greatly enhanced the user experience and made online volume software license purchasing a reality.

Customers wanted to buy online, but the dealer channel just wasn’t making it easy for them. The problem didn’t fit into the dealer’s established system, which was working fine for the dealer. All of my developments were created from user feedback and by studying the common recurring errors caused by this inefficient system. I listened to the complaints from our sales team, reviewed the return reports, and spoke to our customers for the answers. Our system reduced errors by 90 percent and decreased the time to process an order by more than 70 percent. I went on to make further enhancements, constantly refining and adding new features based on the user experience.

This innovation became our competitive advantage in the marketplace; it shifted the focus away from price to instead highlight how our system could eliminate the host of headaches caused by the complicated and changing world of volume software licensing. By adding Microsoft licensing to our new web engine, we were attracting an entirely new type of customer. The large public research institutions, which we rarely did business with, were now awarding TRC their request for proposals (RFP) for volume software licensing. To our humble satisfaction, we won the University of California System’s RFP for not only Microsoft, but for five other popular publishers as well. The contract resulted in a multimillion-dollar award that locked us in for two years serving all nine campus locations.

So, as I said, I’m a salesman and proud of it. In everything I do as an entrepreneur, I’m selling my passion. Entrepreneurs follow an inspiration or passion, and that passion is what persuades others to follow entrepreneurs. The passion of the entrepreneur radiates throughout the organization, touching everyone in its path, urging everyone to take ownership in the business. That kind of passion is what the entrepreneur is always selling, and it helps form the culture of the organization even as it drives it forward toward success. Selling becomes a molecular component of the organizational culture, rather than a forced activity.

When I finally had my own business up and running, I was determined that my organizational culture would also include strong components of innovation, dynamic thinking, and disruptive change. I saw this as a really cool opportunity to do something fun. The business journals were full of reports of companies that let you bring in pets, and had basketball courts, foosball tables, beanbag chairs, stocked kitchens, outdoor adventure outings, and more. I tried several different times to create a fun-filled physical environment in order to cultivate innovation, but my initiatives didn’t seem to have much impact. I soon realized that just as my behavior had helped create my company’s culture of ethics, honesty, and selling, the culture of innovation had to come from me as well, not from an office playground. I couldn’t plan my way to an innovative culture; I just had to live it.

In the next chapter, we’ll talk more about how you can develop a culture of innovation and change within your own organization. We won’t be talking about stocking your conference rooms with foosball tables and espresso machines. But we will take a closer look at how you, and your performance as an entrepreneur, can form your organization’s approach to innovation and determine the success of its ongoing growth and development.