NZ’s e-mag for sales leaders

STOP ARM-WRESTLING with Your Clients

DIScOvER YOuR

Competitive

ADvANTAGE

Is the Solution Them or Me?

LEAvING EffEctivE vOIcEMAILS

ARE YOu ONE Of ThIS WEEk’S WINNERS?

SEE INSIDE!

NZSALESMARcH 17tH 2010 / issuE 36

NZsM / MAR 17tH 2010 / 2

MARcH 17tH / issuE 36

ThIS WEEk'S MuST READSTOP ARM WRESTLING WITh YOuR cuSTOMERS!six tips to developing better relationships.

DIScOvER YOuR cOMPETITIvE ADvANTAGE How using key performance indicators will help you.

NZSM cALENDAR

RESOuRcE cORNERTRAINSMART A comprehensive guide to planning and implementing engaging, successful training sessions.

SALES TRAINING DIREcTORY

TWO MINuTE TOP-uPIS ThE SOLuTION ThEM OR MELooking inward to solve problems.

QuIck fIxit’s not what you sell, it’s how you sell.

ThE cLOSE

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ARE YOu ONE Of

ThIS WEEk'S WINNERS? SEE INSIDE!

ABOut /

short and sharp, New Zealand sales

Manager is a free e-magazine delivering

thought provoking and enlightening articles,

and industry news and information to

forward-thinking sales managers, business

owners and sales professionals.

EDitOR / Paul Newsom

ARt DiREctOR / Jodi Olsson

GROuP EDitOR / trudi caffell

cONtENt ENQuiRiEs /

Phone Paul on 04 586 4733 or email

pauln@nzsalesmanager.co.nz

ADvERtisiNG ENQuiRiEs /

Phone Richard on 09 523 4112 or email

richardl@nzsalesmanager.co.nz

ADDREss / NZ sales Manager, c/- Espire

Media, PO Box 137162, Parnell,

Auckland 1151, New Zealand

WEBsitE / www.nzsalesmanager.co.nz

Our ‘must read’ article this

issue describes a situation

we are all familiar with –

the defensive buyer who just seems

determined to make our life hard!

couple this with an enthusiastic and perceivably aggressive seller, and what do you get? A push and shove arm wrestle while both sides spar with each other towards doing business, or more likely a knock out punch from the buyer, which sends the seller away licking their wounds to plan their next assault on the account.

the fact that buyers behave this way because sellers have trained them to do so is a fair reflection. So if your arms are aching, take heed of Adam’s advice and consider how you could adopt more cooperative behaviours.

in our resource corner we feature the book ‘train smart’.

Developing and delivering effective training is an important but often overlooked skill for sales managers. this book is well worth a read. the author, Rich Allen, is also second-to-none in practising what he preaches. He regularly visits New Zealand to present seminars, so look out for him.

this issue of NZsM marks an historic occasion in our quest to push the boundaries of traditional magazine publishing. As well as the usual pdf, you can now read this issue as an online, turn-the-page edition. follow the instructions in your email, and check out the exciting new option.

As always we are doing this for you, so your feedback is essential. We’re keen to hear from our readers on whether the new format worked for you, any problems you’ve had, and in fact anything else you’d like to mention regarding the new format.

Happy selling! Paul

NZsM / fEB 24tH 2010 / 4

t H i s W E E K ’ s M u s t R E A D

Stop Arm Wrestling With Your customers!Six tips to developing better relationships By Adam sands

Why do buyers often introduce ‘irritants’ like

arranging for your competitors to be visiting

them just before or after you so you pass in

reception, or saying they just had a comparative quote 10

percent lower than yours? Why do they seem suspicious of

your motives for cold calling them, or suspicious of your

initial offer? Why do they seem intolerant of your need to

follow up with them after a sales meeting? Why do they often

hold back information, like the details of the comparative

quote, or the details of their current supplier?

Does this type of buyer behaviour get them what they want?the answer is no – not usually. sure, it might help them

win an extra short term discount, or screw the supplier

down on terms a little more, but in the long term, it only

lessens the chances of achieving the right fit, right terms,

right supply model to truly meet their organisation’s

Adam sands is a principal consultantfor negotiation experts scotwork, following a successful career in B2B sales, sales management and sales coaching. for more information visit www.scotwork.co.nz.

5 / MAR 17tH 2010 / NZsM

1

needs. this means missed opportunities for boosting their

bottom line.

So, why do they do it?The first reason I believe so many buyers behave in this way

is that salespeople have trained them to do so. Buyers have

learned that if they put pressure on sales people they give in.

unfortunately this has just encouraged buyers to expect and

demand more.

Remember, goodwill begets greed, not gratitude!

the second reason is that behaviours are catching. if i

choose to withhold information from you, chances are, you’ll

withhold information from me. if i choose to show you how

much power i have, you’ll do the same.

At best we’ll waste lots of time posturing, flexing our

muscles and whining about each other. At worst, profitable

collaborations between suppliers and clients, that improve

both parties’ businesses, don’t happen.

traditionally, sales people have been motivated by one thing

– their own selfish gain (money, commission, sales leagues)

– rather than their customers’ success. As a result, buyers

have learnt that sellers will start high, will embellish the truth

about their products and services and make promises they

can’t keep. sellers HAvE behaved this way, and buyers have

been forced to respond accordingly.

Even if you are one of the more enlightened sales people

who are focused on your customers’ real needs and keen to

help them solve their business problems, at the beginning of

the relationship, you are perceived as just another sales rep.

so if we know that it is the behaviour of generations of sales

people that has taught buyers to act in a certain way, it stands

to reason that by changing our actions and behaviours, the

way buyers respond will also change.

this could mean our customers get better long-term deals, our

relationships with buyers improve more quickly and we achieve

greater levels of success. sounds like a ‘win-win’ to me.

the trick is to behave in a co-operative way, try to

understand what business or personal needs are driving a

certain reaction or behaviour, and then work to meet that

need – on terms acceptable to you and your organisation.

Here are six tips to develop more cooperative and collaborative relationships:

BE MORE EMOTIONALLY DETAchED When people are emotionally involved, they tend to argue

from a more irrational and less commercial perspective. they

react personally to things like irritants rather than asking

themselves, “What does the buyer hope to achieve by acting

in this way? is there any other way i can help them achieve

that without it compromising my needs?”

BE PREPARED TO DIScLOSE INfORMATIONif i’m more open with you, you’ll tend to be more open with me.

if a buyer seems like they don’t believe you’re offering them the

best price, can you prove it by showing them your margin? this

thought scares sales people, but if i choose to tell you what my

margin is, does it mean i have to give it away to you? Of course

not. i might choose to trade some of it for greater volume, or a

longer-term commitment, but i have yet to meet a buyer who

thinks it’s unreasonable for a supplier to make a profit.

A word of caution though. When considering whether or not

to disclose a piece of information, the acid test is how does

it structure the expectations of the other party. if it’s likely

to help them make movement towards me, i’ll disclose the

information. if not, i’ll be a little more careful about what i say.

2

NZsM / MAR 17tH 2010 / 6

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TRY TO hOLD YOuR MEETINGS IN A MORE INfORMAL, PRIvATE SETTINGEver seen a negotiation between two parties seem

collaborative and cooperative when it’s held through the

press? Ever felt relaxed and comfortable in what you thought

was a one-on-one meeting, and then the buyer brings in six

other people?

Meetings held in a public setting are, on the whole, more

competitive and adversarial. try not to go mob-handed to

sales presentations. If you find yourself out-numbered, try to

bring others in with you to even things up. Avoid publicising

the details of your deals. And remember, informal does not

mean unprofessional, even a meeting over a coffee should

be well planned and well structured.

BEcOME A MORE SkILLED OPERATORin most cases, skilled sales people, skilled buyers and skilled

negotiators act in a more cooperative way, than those who

are less skilled. this is not because training teaches you to

be cooperative. Rather skilled operators know that by being

cooperative, they get better, more sustainable deals.

fOcuS ON BuILDING A LONG TERM RELATIONShIP WITh YOuR BuYERSAsk people what their definition of a good deal is in a

one-off relationship. they’ll usually say it’s when they

know they’ve screwed the other party to the floor. When

asked what their definition of a good deal is in a long term

relationship, they’ll often say, when they know they’ve taken

the other party close to their limit, but know the other party

is prepared to do business again with you.

treat all seller/buyer interactions as long term. New Zealand

is a small marketplace, and although you may think that

the buyer you’ve nailed to the wall is one you’ll never have

to deal with again, chances are they’ll appear in another

organisation, at another time, with more power – and then

who’ll get screwed?

Next time you come across a competitive, adversarial buyer, don’t respond in kind – consider the personal or commercial

need driving that behaviour, act in a cooperative way and try to meet that need – on terms acceptable to you.

34

5REDucE ThE cONTRAcTuAL ELEMENTS

if a supplier tries to get me to sign a lengthy contract, with

high impact penalty clauses for early termination, what will i

be thinking about the claims the sale person has made about

the true benefits to me of their solution? That they might be a

little exaggerated?

clearly some contractual obligations are necessary in

business relationships, but for example where penalties for

early termination are balanced with incentives for longevity,

or offset against supply performance indicators, the parties

involved are more likely to see the mutual benefit in them.

One highly successful global kiwi brand i came across a

couple of months ago said their ethos around contractual

arrangements with their clients was “love without clauses” –

that’d make me trust that supplier.

6

MID STRENGTHFULL FLAVOURFULL LIFE5

NZsM / MAR 17tH 2010 / 8

Michael Taplin has guided many businesses to sales success and profits by finding innovative strategies. You can read more of his ideas at www.bizlearn.biz

Discover Your competitive Advantage

there can be many sources of competitive advantage.

The easiest one to look for focuses on the efficiency of

your sales process, so let’s start there.

it seems pretty obvious that if you have a lower “cost

of selling” than your competitors you will make more

profit, or make more sales for the same total spend.

this is a competitive edge. By ‘cost of selling’, i mean

the total cost of all the activities needed to attract a

customer and secure the sale. But it’s not the total that

counts; it’s the proportion of the gross profit you earn

on the sale. that is where you find the real business

performance leverage.

If you express the proportion of the gross profit as a ratio you

get a number that has a direct impact on business return. if

you put it into a model you can experiment with the numbers

to find out which of the many ratios give you maximum return

for minimum effort or cost. these ‘high leverage’ ratios are

your real key performance indicators (KPIs).

how using key performance indicators will help youBy Michael taplin

9 / MAR 17tH 2010 / NZsM

it seems pretty obvious that if you have a lower “cost of selling” than your competitors you will make more profit, or make more

sales for the same total spend. this is a competitive edge.

OK. that’s a fairly simple model, but powerful if we use

it to examine our sales process and find out where and

how we can shift our sales strategy to reduce our cost of

selling. it works because it expresses every number as a

ratio of dollars per activity.

You can extend this model to look at the performance

of individual sales people, or to explore the

differences between customer segments or product

segments. those analyses give you a base to explore

your sales process options. You can look by answering

two questions:

Which segments will generate a return from increased •

investment in the sales process?

Which segments need a more efficient sales process to •

drive down the cost of selling?

the contribution or the cost of an activity is expressed per

sale. this shifts our interpretation of the numbers and gives

us a performance indicator. some changes in the numbers

are more important than others, and by changing the

numbers in a model we can determine where the leverage

lies before we start an expensive experiment. these are our

key performance indicators.

Now we move to the next step. to make it happen we have

to find the way to change the specific KPI we have decided

is important. this is the shift in strategy we are looking for.

i leave it to your own knowledge of your business to work

out how you can convert the change in profitability into

competitive advantage.

the other way to discover competitive sales advantage

using a KPi model is to look for alternative ways of

approaching your market.

think of this as a process of discovering a market segment within

the broader market that has been overlooked by the industry at

large. it is common in any industry to have an accepted way of

doing business. Any unorthodox approach is typically considered

to be a heresy and rooted out with a fervour similar to that used

by the medieval inquisition of the church. An example from my

casebook may help to explain how it works.

Segmentation in the steel distribution business

Bulk steel is big and heavy, and distributors are big and heavy to

contribution per sale

Gross Profit per sale

cost of selling per sale

Sales Activity cost per sale

Advertising/Promotion cost per sale

Prospecting cost per sale

calls per sale

cost per call

Lead generation cost per sale

+

x

+

_

NZsM / MAR 17tH 2010 / 10

match. It is also a high volume, low gross profit business. Steel is

sold by the truckload, and is considered a tradable commodity.

small local distributors have grown up serving small local

customers. they survive by buying bulk loads from the major

distributors and breaking it down to the small quantities

needed by their customers. they provide a useful service.

At the time, they were despised by the major distributors,

and treated as a nuisance.

My assignment was to find a way of increasing sales and

profitability for a distributor who had been losing market share

for the past five years. I undertook an analysis of who buys

what, looking at the top 25 customers in detail. A pattern soon

emerged. there was a small group of customers whose names

suggested that they were also distributors. A few questions of the

sales staff quickly revealed that these businesses were actively

disliked and discouraged “because they compete with us.”

I looked further at the top 100 customers as identified in

the segment. I totaled their purchases; they were significant

buyers. i looked at the long tail on the customer list, and it

became clear that around 1,000 of the small buyers were

too small to be profitable.

it did not take much longer to put a new strategy together.

My client would become the friend of the local distributors. it

would love them and provide superior service. it would go even

further; it would encourage its small unprofitable customers to

deal with the local distributors. My client would be loved in

return, and would capture the lion’s share of the segment.

Management was highly sceptical. After all, this was pure

hearsay. It flew in the face of everything they had learned in

a lifetime in the business.

how could it be proved to be a good strategy?

We changed the KPi model to show the new segment and plugged

in the numbers. it quickly revealed that we would be swapping

small high cost transactions for larger profitable transactions.

it was easy to implement the new strategy. two sales

representatives were assigned to the new segment. Key

customer executives were invited in for a working lunch

where a new relationship was created. they were promised a

steady flow of new customers in return for loyalty. They were

promised a level of service formerly only available to the

biggest buyers. Of course they came on board.

sales to the new segment grew rapidly, and competitors were

caught hopping. They found it difficult to match the new

strategy in any credible fashion, even after they worked out

what had been done to them. the gains were permanent.

i like this true story because it reveals that a new way

of thinking is often needed to discover a new source of

competitive advantage. How can you put yourself in a place

that encourages new thinking?

©Michael taplin 2010.

sales DevelopmentDavid formanAucklandNegotiating skillsscotworkWellingtonPitching and QualifyingDinanmite Auckland

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NZsM / MAR 17tH 2010 / 12

Train Smart

R E s O u R c E c O R N E R

train Smart: Effective Trainings Every Time (Second

Edition) offers a comprehensive guide to planning and

implementing engaging, successful training sessions.

the author, an expert keynote speaker and workshop

presenter, provides an overview and framework for

the training process and then presents a generous

collection of brain-friendly strategies that can be

immediately implemented. the second edition has been

thoroughly updated and includes new training strategies,

recommendations for using the latest technology, and

additional tips, examples, and guidelines throughout.

Editor’s note: this is a great practical resource for any sales

manager or trainer looking to design training sessions the

team will enjoy and learn from.

Author: Rich Allen Publisher: corwin Press Inc

$67.95 from fishpond

13 / MAR 17tH 2010 / NZsM

NZsM / MAR 17tH 2010 / 14

in this economy, everyone is looking for a simple fix to

survive and arrive on the other side intact. some even

occasionally entertain dreams of growing just a little bit.

few are happy with their situations. And all but a few point

their fingers at the economy as the source of their dismay.

the comments i overheard at one of my recent top Gun

seminars were representative. One sales person complained

that his customers were shrinking and going out of business.

several complained about customers’ pressure to lower prices.

still others complained about desperate competitors’ feverish

attempts to generate cash flow by dramatically discounting.

there must be a genetic inclination in the human race

to look outside ourselves and blame those things that

are outside of our control for our situations. We lament

the conditions outside of ourselves, and cast ourselves

as victims. If only someone else would fix it. Maybe the

government will make everything good again.

unfortunately, as long as our gaze is directed at ‘them’

– those conditions in the market that have changed and

are outside of our ability to control – we will never free

ourselves from the constraints on our income and prosperity.

We can’t do anything about ‘them’.

the real secret to improving our conditions is to work on

‘us’. James Allen said:

“Men are often interested in improving their circumstance,

but are unwilling to improve themselves, they therefore

remain bound.”

sales people, sales managers, and sales executives need to

look inward – at themselves and their sales teams – for the

solution to their problems.

Is The Solution Them or Me?Looking inward to solve problemsBy Dave Kahle

Dave Kahle has trained tens of thousands of B2B salespeople and sales managers to be more effective in the 21st century economy. He’s authored seven books, and presented in 47 states and seven countries. visit his website www.davekahle.com or sign up for his weekly newsletter.

t W O M i N u t E t O P u P

15 / MAR 17tH 2010 / NZsM

Make 2010 Your Best Year Ever!Make 2010 Your Best Year Ever!Make 2010 Your Best Year Ever!Make 2010 Your Best Year Ever!

Sales Peoplesales people must understand that it was okay just a few years

ago to have your own style of selling, to never invest in your

own improvement, to make your living off of your existing

relationships. today, all of these are obsolete ideas that must

be changed. It’s time to look inward, and fix yourself.

to effectively deal with the changing economy, sales people

must become more strategic and thoughtful about the

investment of their sales time, and they must bring value

both to the customer and to their employers in every sales

call. they must view their jobs as professions, not just jobs,

and become serious about improving themselves.

in a world where it is blatantly obvious that good sales people sell

more than mediocre sales people, they must decide to become

better. that means investing in their own improvement, and striving

to achieve higher levels of competency and thus, better results.

those sales people who survive and thrive in this climate will

be those who understand the path to their prosperity lies not

in the outside world, but in themselves.

Sales ManagersLikewise, sales managers have to stop coddling those

sales people who aren’t interested in, or committed to,

continuous improvement and greater levels of productivity.

they need to put in place practices and disciplines that

call for quantifiable expectations on the part of their sales

team, regular measurements, and greater thoughtfulness

and strategic planning. they must demand continuous

improvement and thoughtful efforts to increase market share.

sales managers must look inward, understanding that their

chances of success are dependent on them, not the market. that

they can do it better, and that doing it better brings better results.

they must examine their sales forces, and use this window

of opportunity to weed out those sales people who have

no interest in developing, who don’t have the capability

to succeed as a professional sales person, and who aren’t

committed to their own personal success. Now is the time to

review the bottom third of their sales forces and aggressively

seek to upgrade.

Sales ExecutivesCEO’s and CSO’s (Chief Sales Officers) need to recognise that

the current state of the economy, and the resulting impact on

the attitudes and perspectives of employees, has delivered a

once-in-a-lifetime opportunity to make significant changes in

the structure of the sales force.

Recall just a little over a year ago. to make wholesales

changes in sales territories, account responsibilities,

the role of the inside and outside sales person, sales

management practices, compensation plans, and

expectations for continuous improvement – all of these

initiatives would have been met with resistance from the

majority of the sales force. today, most sales people are

willingly cooperative, acutely aware that they can be easily

replaced if they don’t follow your lead.

those cEO’s and csO’s who look inward and use this window

of opportunity to streamline and rationalise their sales systems

will increase their productivity and lay the groundwork for

disproportional growth when the economy turns up.

the world is full of victims who lament their condition and

blame their fate on sources outside of their control. Leaders

accept their responsibility to look inward and improve

themselves.

© copyright by Dave Kahle

sales managers must look inward, understanding that their chances of success are dependent on them, not the market. that they can

do it better, and that doing it better brings better results.

NZsM / MAR 17tH 2010 / 16

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it's hard to keep that which has not been obtained through personal development

Jim Rohn

Q u i c K f i X

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QuIck fIxIf, when you leave a voice message, you find your call is not

returned, then pause before you make the next call.

You should of course be prepared to speak when the phone is

picked up, but if you are trying to get access at executive level,

you could be trying a long time. You should therefore be equally

prepared to leave a message. Rambling, hesitation, and poor

choice of words are all sure signs of a lack of preparation. Your

call is unlikely to be returned.

so, before making those important calls:

think through your voice message. Write it down and •

get it right.

Practise reading it aloud. Record it and play it back to •

yourself. How does it sound? Would you return the call?

Only make the call when you are properly prepared.

If you have a favourite ‘quick fix’ that you would like to share

with our readers (without giving your winning secrets away!)

then email the editor at pauln@nzsalesmanager.co.nz

You will be in to win a high powered laser pointer pen, courtesy

of the great guys at Brand storming Promotions.

WIN A LASER POINTER PEN FOR YOUR QUICK FIX!

If you have a favorite ‘quick fix’ that you would like to share

with our readers (without giving your winning secrets away!)

then email the editor at pauln@nzsalesmanager.co.nz

You will be in to win a high-powered laser pointer pen,

courtesy of the great guys at Brand storming Promotions.

it's not what you sell, it's how you sell

Leaving Effective Voicemails