Category : Motivating Salespeople

The single most important part of selling (that you’re probably overlooking)

You’ve probably heard—and followed—a lot of sales advice over the years. And you’ve probably learned, maybe the hard way, that some of it is better than others.

But there’s one important component to selling that’s frequently overlooked entirely. It may even be the single most important part of a successful sales process. And it all boils down to one word.


If a customer doesn’t trust you (and, in turn, the product or service you’re selling), he or she won’t buy it. It’s just that simple. Similarly, even after a sale, if trust is broken and never re-established, you have lost that customer forever.

What does this mean, exactly?

Have you ever sat through a pitch or presentation where a speaker from your company is describing one of your company’s products in a way that makes it sound just about perfect? You know the product has faults and problems, but there is no mention of these. You almost start to think, “Gee, I don’t recognize that product; I wonder which company makes it?”

If something sounds too good to be true, it generally is. And customers know this, even if they don’t tell you in so many words that they think you’re trying to pull the wool over their eyes. They just won’t buy from you.

So, am I saying you should tell the customer that your product is not perfect, and the reasons why? That maybe it’s not right for them at all? That you should go so far as to actively discourage the sale in some cases?

Yes. That’s exactly what I’m saying.

Hear me out: Customers already know that your product isn’t perfect (because nothing is), and that it’s not for everyone (because nothing is). Why pretend otherwise?

Tell the customer up front who the product is and is not for. What problems it solves and/or results it can deliver—and what it can’t do. You’ll instantly establish credibility because few if any of your competitors will be this straightforward.

Ironically, when you’re open about what something can’t do, people are far more likely to believe your statements about what it can do. And that’s how you build trust and credibility.

When a customer asks you in an initial conversation why they should buy your product, here’s how I suggest you answer:

“I’m not sure you should. We don’t know enough yet about your business to say that our product is the best for you. In fact, if you’re looking for the lowest price or basic specs, we’re almost certainly not right for you. That’s what we’re here to find out. Having said that, we’re very good at solving etch uniformity problems [you can prove this, right?], and our cost of ownership is generally the lowest. Knowing that, how would you like to proceed?”

In almost every case, the customer will want to proceed, which means you can now have a real conversation like you’re real people working together. A true partnership, in other words, instead of a warily adversarial, possibly one-time transaction.

And even if they don’t want to proceed right now, they will always remember that you treated them with respect and candor. Which means that if they ever do need the sort of thing you provide, who do you think they’ll call first?

Transparent honesty is so rare in today’s world that it’s like gold. Once you establish a real baseline of trust with your customer, and demonstrate that you can help solve their problems, they will be in your corner for life.

And you can bank on that.

What Sales Really Needs (But Rarely Gets) From Marketing

Contrary to what you might think, your company is not really selling a product or service.

You’re selling a solution to a problem. Something that will make your customers’ lives easier. Something that will make (or save) them money. Something that will slash time, complexity, or hassle.

If you’re in marketing, your most important job—bar none—is to convey this true value to your sales people so they can sell your offerings effectively.

A good value proposition does three things:

  • Explains how your company, product, or service solves customers’ problems or improves their business results.
  • Details the quantified or qualified benefits your customers receive, such as the amount of money they earn or save, or the value of the risk that is reduced by buying your products or services.
  • Provides a compelling response to the question, “Why should I buy from you and not from your competitors? (Note: Anything along the lines of “Because our competitors are stupid/lazy/untrustworthy” is not the sort of answer we’re looking for here!)

While most of us can exhaustively detail our product specifications until the cows come home, product specs are not where the true value lies—even if your product is amazing.

If you need help developing a compelling value proposition, start by thinking about the following questions:

  1. Why do customers buy our products and services?
  2. What unique value do we provide that others don’t?
  3. Which customers want that value? Why do they want it, and how much will they pay for it?
  4. Are our prices set relative to the value customers receive? (e.g., you give me one dollar and I’ll give you three in return over one, two or three years.)
  5. What are the circumstances under which we can provide the most value?
  6. How do we deliver value?
  7. What do we do differently from our competitors?
  8. Is our value sustainable? In other words, can we continue to deliver it? Can our competitors copy it?
  9. How much money do we help customers earn or save, under what circumstances, and over what periods of time? How do we calculate it?
  10. Do we have sales presentations and tools that clearly demonstrate how we help customers earn and save money?
  11. How much risk do we reduce, and how much is that risk reduction worth to a customer?
  12. Why do we lose business? What are the most common reasons? (It’s almost never price, despite what buyers may tell you.) What can we do about those reasons?
  13. What proof do we have that supports the claims we make? Do we have case studies, customer testimonials or references, data, or repeat business we can point to?
  14. Can we demonstrate our unique value to customers before they buy?
  15. Can we guarantee the results we claim to deliver?
  16. What are the biggest risks (both actual and perceived) customers take when they purchase from us?

If you’re not happy with how your salespeople are selling your product or service, give them a rock-solid value proposition to sell instead—because this is truly what your customers are looking (and, in fact, eager) to buy.

What Professional Buyers are Really Thinking…In Their Own Words

Today, I’m pleased to give you a valuable behind-the-scenes glimpse into the minds of professional buyers.

I recently hired three former professional buyers from Fortune 1000 companies to speak frankly with me about what motivates supply-chain people, and the strategies and tactics they use with suppliers.

Here are some of their insights, along with actual quotes:

1) We’re motivated by money and promotions and we earn them, to a great degree, by getting price reductions.

“How much we can reduce your prices is frequently more important to us than the prices we pay.”

2) There is less competition than you think.

“We use prices from companies we would never buy from as leverage against companies we want to buy from.”

3) Your products aren’t commodities.

“We purposely use the word ‘commodity’ to make you believe that your products are the same as everyone else’s.”

4) We tell every supplier that their prices are too high, even when they’re not.

“I don’t expect to get the highest performance for the lowest price, but I always ask for it because sometimes I actually get it. I’m always surprised when this happens.”

5) We don’t stop asking for lower prices until you stop offering them.

“I wouldn’t feel like I was doing my job if I stopped asking for a lower price.”

6) You need to develop relationships with the users of your products…even when we tell you not to.

“We buy what they tell us to buy.”

7) We know that you base your prices on your costs. That’s why we ask to see your costs.

“We’ll tell you that your costs are too high and ask you to justify them. When you can’t, we’ll tell you to lower them. When that happens, your price comes down.”

8) We determine a target margin for your products before we talk to you about price.

“We look at our own margins, then determine what percentage of those margins we think you deserve.”

9) We have three major concerns when buying: delivery, price, and quality.

“If you can’t deliver to our requirements, we’re not going to buy from you.”

10) If you want a higher price, show us why we should pay it.

“In my opinion, the biggest problem sellers have in negotiations is that they can’t explain how their products are better and why they’re worth more than competitors’ products.”

Interesting stuff. None of the statements made by these ex-buyers surprised me, but it was refreshing to hear them actually say out loud what we’ve all been suspecting.

So, now that you’ve gotten this inside look into the minds of actual buyers, how can you best put this information to use in your negotiations?

  • Don’t assume that buyers are telling you the truth. (If you take away nothing else from this discussion, remember this one fact.)
  • Don’t reveal your costs; it’s none of their business and can only lead to lower prices.
  • Price your products and services on their unique value to customers instead of on your costs.
  • Learn to say no. You’ll save a lot of money by doing so.
  • Don’t “give away the farm” in the face of repeated requests for price reductions. It’s their job to keep asking and try to wear you down.
  • Your products are not commodities, and buyers know that, but it’s your job to highlight what makes them better than the competition.
  • Winning your customers’ loyalty goes a long way toward influencing buyers.

The Management Myth That Can Cost You Millions

There’s a common misconception out there that salespeople are a self-led bunch who need little or no active management from above. Nothing could be further from the truth! These employees, like all others, need to be actively developed and trained in order to achieve their full potential.

Additionally, because these folks are so crucial to your bottom line, how well (or poorly) you manage them has a direct impact on your revenue and profitability.

Well-managed employees are productive, loyal, engaged, and high-achieving. Poorly managed employees, on the other hand, tend to slip through the cracks into mediocrity—and those with true star potential tend to leave for other workplaces (a key competitor of yours, perhaps?) where their talents are better appreciated and nurtured.

You may think you don’t have time to play an active role in the management of these employees, but the truth is that you simply can’t afford not to.

With that in mind, here are 10 things you can do to ensure your sales organization functions at the highest possible level:

  1. Continually look for ways to improve the way work is done, eliminate tasks that shouldn’t be done at all, and prioritize the rest so salespeople know exactly what they should be working on now, and what they can postpone until later. There’s a lot of overwhelm out there, and in the vast majority of cases it’s caused by managers who continue to delegate work to their employees without any guidance regarding what is most crucial to focus on right now. This means that it falls on you to prioritize objectives and tasks—which can be both difficult and time-consuming. Ducking this responsibility, however, will only backfire in the long run.


  1. Regularly recruit potential candidates from inside and outside the company, whether a job opening exists or not. The best sales executives don’t need to frantically start recruiting when an employee gives notice or is fired because they already know numerous qualified replacements who are lined up and eager to take the job. You’ve probably heard the acronym ABC—Always Be Closing. Smart managers know they need to ABR, too—Always Be Recruiting.


  1. Start grooming one or more successors for your job. This enables your subordinates to assume more responsibility in the company without disrupting their current responsibilities. It’s also a vital part of smart succession planning in the event you are suddenly unable to continue doing your job.


  1. Continually solicit feedback from employees on how satisfied they are, and on what you can do to help them. Subjects like compensation, job satisfaction, career growth, and workload should be openly and honestly discussed on a regular basis. Assuming the conversation is respectful, no topic should be out of bounds. Highly involved managers are rarely surprised when an employee resigns, and this type of foresight enables you to wish the departing employee well and let him or her know the door is always open for a possible return someday. Hands-off managers tend to respond to departures with hostility and defensiveness.


  1. Regularly review your employees’ workload and priorities. This means calling the shots on hard decisions (such as “work on this, and don’t work on this”) when employees ask for help. Effective managers don’t parrot useless platitudes at employees—like “you have to work smarter” or “you need to manage your time better”—without providing any details on how to actually do these things.


  1. Run interference and fight for your people when needed. When employees need help, smart managers don’t make excuses or postpone difficult discussions. They get involved and get things done.


  1. Get out in the field, work with employees, talk to customers, and help both with their problems. You’ll know exactly what each salesperson needs to improve and can provide the coaching and training to make it happen.


  1. Stand up to belligerent customers who yell at and threaten your salespeople. You don’t remove salespeople from an account simply because the customer wants to deal with a weak salesperson who will offer him lower prices. You know, in the long run, that your loyalties lie with your team. The customer is not always right.


  1. Avoid micromanagement. You never want to be in a “Continuous Sampling Loop” with your people, interrupting them every few hours or days to find out what they’re working on so they can show management that they’re “on top of things.” Give them the autonomy and tools to do their jobs well and then stay the heck out of their way.


  1. Be just as concerned about the careers of your people as you are about your own career. You should be working on a career path with each employee that helps him or her professionally develop to the fullest. And remember that there’s never any shame in hiring people smarter than you—the very best managers strive to do just that.

Are Your Salespeople Reluctant To Sell High-Margin Products?

One of my clients is having an issue with his salespeople: They are reluctant to sell a certain product at the recommended price because the product’s gross margin is 80%.

And why is that a problem, you may ask? The salespeople firmly believe that:

  1. Any product with a gross margin above 50% is priced too high
  2. Gross margins above 50% should be reduced to this level or lower – with the difference passed along to customers in the form of lower prices
  3. The cost to build certain products “should be lower”
  4. Customers shouldn’t have to pay a high price just because labor and materials costs are high

How the scenario plays out

Here’s one way the scenario can play out: The client builds an equipment upgrade. Not only does the upgrade last three times longer than the previous version, it also dramatically enhances the performance of the equipment.

A typical customer who uses the upgrade will realize a yield improvement of 1%, translating to $1M or more in additional revenue each year.

The company priced the upgrade at $25,000, which represents only 2.5% of the marginal annual value to customers. Even if the upgrade were priced at $100,000, it would still be a bargain relative to what customers are getting in return.

But at $25,000, the gross margin is 80%: Way too much, according to these salespeople.

What are your salespeople thinking?

It’s interesting, when you think about it. The salespeople share – or should share – responsibility for running a profitable business. And they should know that higher-margin product sales are needed to offset lower-margin product sales.

But the reality is that many of them don’t know this. They feel an allegiance to their customers and erroneously believe it is part of their job to secure the lowest possible price for them.

Training, not termination, is the solution

It might be tempting to just go ahead and fire salespeople who think this way, but training is a better solution to the problem (not to mention the fact that my client would need to fire nearly a third of his sales force!).

You must actively teach salespeople to think about prices and margins within the context of total customer profitability.

Selling to a customer who contributes only 20% gross margin, for example, is probably a money-losing proposition for the seller. This is low by almost any standard, and after deducting selling and administrative costs, the seller is probably losing money on this customer – or breaking even at best.

For this reason, selling the 80% gross margin part for full price to this customer is the right thing to do. This particular customer is not nearly profitable enough to warrant a discount. In fact, you probably need to sell products with an even higher margin to this customer in order to bring profitability up to a reasonable level.

This lesson should be included in your sales training to help prevent the unhelpful mindset of “We can’t charge the customer more than twice our cost.”

What to do if they just don’t get it

When a salesperson complains about high prices and/or excessive gross margins, ask what kind of profit his or her customer is contributing to your company.

If the answer is less than 30% gross margin, or 10% contributed profit, ask how lowering prices will help to increase profits.  Finally, ask what specifically the salesperson is doing to increase gross margins and contributed profit.

If blank stares or nervous giggles are the only responses you get to these questions, it’s time to put on your teacher hat and review the lesson on total customer profitability.

And if the salesperson still doesn’t get it? At that point, steering him or her toward a different career (either within your organization or elsewhere) is probably the best course of action for all involved.

Sales Competencies

Recently I was asked for my thoughts on the competencies that every capital equipment salesperson should have. The following are what I consider most important:

  1. An understanding of the importance of profit
    In my mind, the number one priority for salespeople is to bring profitable business to their employer. Salespeople should know how their employer makes money; how prices affect margins (including how dramatically even a 1% difference in price affects net profit); and how profitability influences stock prices, bonuses, salaries, career growth, and available resources.
  2. Hardware, service, spare parts and product upgrades knowledge
    Salespeople should know the key competitive advantages and value propositions of every product and service they’re required to sell (marketing should develop these advantages so they’re clear, straightforward, and impossible-to-misunderstand). In addition, salespeople should know specifically how their products and processes help customers to achieve their objectives.
  3. Writing and presentation skills
    Every salesperson should be able to write a concise, coherent email or letter to a customer or a fellow employee. The salesperson should also be able to give a “why should I buy” presentation to a customer on relevant products, processes, services, spare parts, and system upgrades. The salesperson should also be able to clearly position (in the mind of the customer) his or her employers offerings relative to competitors’ offerings.
  4. How to successfully negotiate with aggressive, professionally-trained buyers who use PICOS and other profit-transfer methods.
    This competency should include more than how to conduct face-to-face negotiations. It should also cover the how, where and why aggressive tactics such as PICOS and its’ variations began; how customers are trained in its’ uses; what to expect in terms of customer behavior; how to develop a sales plan when approaching and conducting negotiations; how to keep the customers’ senior management informed of progress, delays and any misbehavior on the part of Purchasing people; and how to work successfully with individuals who employ these methods, without damaging relationships. 
  5. In-depth knowledge of the customers’ and competitors’ environment (and how to acquire that knowledge)
    This should include training salespeople on what to look for in publications like annual and quarterly reports;  how to find out about key changes in management; how to uncover the customers’ top priorities; current capacity utilization and potential changes in that utilization; customer profitability drivers; the process the customer uses to decide which products and services to buy, along with the people who make those decisions; and any specific pressures the decision makers are under from their customers, management, and investors. 
  6. How to establish and build relationships with customers
    The best salespeople in the company should train the rest in how to provide day-to-day support and superior execution on behalf of customers, over and above what competitors’ salespeople are providing, so that customers actually prefer to give your company more and more business.
  7. Sales and order process knowledge
    Salespeople should know how to establish exactly what the customer wants, and how to translate customer requirements into language, forms, etc. that the supplier understands and can work with; how to follow up to ensure that the product or service is moving through the manufacturing process on schedule; and how to prepare the customer if things don’t go according to plan.  
  8. How to manage sales time
    There will never be enough time to handle every demand on a salesperson, and certainly not enough time to do handle those demands equally well. Salespeople need to know how to rank the to-do’s on their plate; how to handle email and other dailies so they don’t become the “all dailies”; how to schedule and make regular progress on long-term initiatives; how to determine when “good enough” is; and how to decide what to do first thing on Monday morning.
  9. How to sell services
    Selling services (where typically no explicit need exists, resistance from the customer is common and demand has to be built carefully) is very different from selling hardware (where demand usually exists and the objective is to position your product favorably against one or more competitors).Many capital equipment salespeople (including me when I first started in sales) tend to view service as an afterthought. But with system margins under constant pressure, suppliers need to take every advantage of their ability to improve the performance of a customers’ installed base, and get paid well for doing it.
  10. Consultative and interpersonal skills
    Sales people need to know how to develop trust with people, and how to use that trust to deliver value to the customer through their knowledge of the business, products and services. They should know how to ask the right questions and discover real needs; how to work with customers as opposed to working for them; how to make customers feel comfortable; and how to offer and deliver real, provable value that solves real customer problems.

If you have questions, or would like to discuss these competencies further, please feel free to contact us at 650-862-0688 or at

Thank you.

PICOS: what it is, how to deal with it

Are you familiar with PICOS? While you may not recognize the acronym, you probably would recognize PICOS in practice, especially if you regularly deal with aggressive and well-trained purchasing department representatives.

PICOS stands for Program for the Improvement and Cost Optimization of Suppliers. It’s a supply chain management process that was developed at General Motors in the late 1980’s with the goal of dramatically reducing suppliers’ product and service prices, transferring as much supplier profitability to the buyer as possible.

PICOS-trained buyers develop and use well-orchestrated, company-wide plans to convince sellers that their offerings are no different or better than those of their competitors, and that getting a low price is the overwhelming factor in the customers’ purchasing decision.

PICOS-trained buyers repeatedly bring up price during negotiations, and frequently resort to threats to end negotiations, buy from a competitor, or complain to supplier executives when salespeople try to hold the line on discounts and giveaways. You may be thinking “most of our customers use these tactics; how is PICOS different?” It’s different because PICOS training materials specify the use of exaggerations and outright lies as acceptable means to a desired end.

While there is a lot more to understanding PICOS, there are some tactics that sellers can use to successfully combat it. Following are three of them:

  1. Know your offerings and their value relative to your competitors, the customer and the situation. Unless you know what your products and services are worth to the customer in terms of the additional profit your customer can earn using your products vs. those of your competitors, you won’t be able to convince yourself or the customer that your offerings are special and deserve a higher price. When Purchasing responds to your claims of superiorityby saying something like “competitor X can deliver the same results”, your response needs to be along the lines of “no, they can’t; we’re the only company that has proven it in the marketplace at customers A, B and C.”
  2. Never negotiate one item at a time; always think in terms of final context and package. At the beginning of a negotiation, an agreement to provide 80/20 payment terms instead of your standard 90/10 terms may seem like a small concession to make. However, that concession won’t seem insignificant at the end of a negotiation when it’s combined with other concessions such as lower prices, giveaways, additional field support, and tighter specifications. When the customer says “I need better payment terms”, your response should be “that’s certainly possible if you’re willing to agree to the price we’ve quoted”, or you can say “we’ll need to know and consider all of the concessions you’re looking for before we commit to any specifics.”The takeaway: you can give as many estimates as you want, but don’t make firm commitments on pricing, delivery, specifications, terms, field support, spare parts, or software until you know what’s really most important to the customer.
  3. Keep in touch with the real decision makers and the ultimate users of your products. Once a week, send a well-written, fact-filled email to all the key people involved in the negotiation, including customer executives, users of your products, and your own management, documenting any agreements and commitments made by both sides during the previous week. You might also include any threats made by purchasing representatives. If purchasing people object, and they will, you can simply say that your management insists that you document the proceedings in detail and keep everyone informed of the status of the negotiation. Doing this will also incentivize everyone involved to be more civil and honest, and to keep the rhetoric to a minimum.

For more on how you can work successfully with PICOS-trained customers, contact us here.

Eleven tips for a more captivating presentation

sleepy crowdGot an upcoming presentation on your calendar? Here’s how to make sure your audience stays interested and engaged. The next time you’re tasked with developing and giving a presentation to colleagues, customers, or investors, try the following tips:

  1. Determine what you want to accomplish. What do you want the audience to remember and do as a result of your presentation? Whether it’s selling, buying, investing, or behaving differently, develop an interesting and simple story line that clearly highlights the key points you want the audience to remember.  If there is a “call to action”, make that crystal clear as well.
  2. Make your points memorable. If you plan to use PowerPoint, use pictures when you can, and less-and- larger rather than more-and-smaller text. We’ve all heard presenters say “this is an eye chart” when introducing a slide that no one, including the presenter can read. Please don’t say those words and don’t use anything that even resembles an eye chart. If you have very detailed information to deliver, put it in a handout to be distributed after the presentation.
  3. Limit the number of slides. Don’t use more than 10 slides per half hour of presentation time. Your message may be lost if you show and talk about more than that. And plan for some time to answer questions during and after the presentation.
  4. Have a “no slides” version. Projectors break or don’t show up, bulbs burn out and some people don’t like PowerPoint and would rather just talk with you. Make sure you can deliver an effective presentation without using slides.
  5. Practice and rehearse the presentation. I’ve seen people give presentations they’ve been handed at the last minute, and the results are pretty much what you’d expect; they stutter and stammer their way through them. Don’t try to give an important presentation without first rehearsing and getting critiqued by people who know what your audience will look for. Have a private, friendly and knowledgeable audience ask the tough questions in a rehearsal, before you have to answer them in public. Also, work on your ad lib skills, as no presentation goes exactly according to plan.
  6. Introduce yourself to your audience. (If you’re Oprah Winfrey or someone equally well known, you can probably skip this step).  I’ve seen quite a few people start right into a presentation without introducing themselves; don’t be one of them. In addition to the introduction, mention something relevant about yourself and explain why you’re there. If others from your team are with you, introduce each of them as well.
  7. Clarify the purpose of your presentation. If you’re presenting to a customer or investor, see if they agree on the purpose and if they have anything else they’d like you to address.
  8. Confirm how much time you have for the presentation. Be ready to deliver an abbreviated but effective presentation if you have to (as opposed to a high-speed version of the original that many people try and jam into the smaller time slot).
  9. Specifics are powerful, fluffy adjectives are not. Under no circumstances should you use the terms “paradigm shift”, “on a going-forward basis”, or ‘no-brainer”. Someone in the audience will cringe if you do (if I’m in the audience, I’ll cringe). Instead, use numbers, data, specifics, evidence, and real-world examples to show how what you’re talking about (a product, a service, a business) can help the audience. For example, if you’re presenting to a customer, show them how your product or service can help them earn or save money, and if possible, how much money. If that’s not possible, cite other customers who have earned or saved money using your product or service. And if you don’t have any customers yet, simply say so and why, and what you’re doing about it.
  10. Listen closely and answer questions directly. If you purposely give an evasive answer, or an answer that doesn’t make sense, your audience will know it and you will immediately lose credibility. Think about how you feel when a politician avoids answering direct questions and you’ll have an idea of how your audience will react if you do the same. No matter what, do not stretch the truth or say anything that you can’t back up, prove or at the very least, have a good reason to believe.
  11. Follow up quickly and completely. It’s ok if you don’t have a ready answer to an obscure question or the materials on hand to satisfy every request for more detailed information. It’s not ok to neglect to provide them within a few days. Capture every open question and request from your audience, send them an email that shows everything you captured, and then close the items on the list in a timely manner.

We’ve all sat through and sometimes delivered presentations that were less than captivating and that failed to get the hoped-for response from the audience.  We’ve all looked out at a sea of weary, yawning faces and knew that they wanted to be anywhere other than sitting or standing in front of us. But it doesn’t have to be that way. Use the tips I’ve suggested here, and if you like the results, please pass this blog along to the people in your world who really need help. You know who they are, don’t you?

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