Lee Rust, Owner, Florida Corporate Finance
You might be amazed at how many of my client’s companies have but a single sales technique. They answer the telephone. Someone calls to say they want to buy a widget or a certain service and the response is, “Oh yes, we make those,” or, “Oh yes, we do that.” Their only active sales work is to rely on their reputation, their past relationships and the “word-of-mouth” system of sales. While those might suffice to maintain a modest level of revenues, they won’t contribute much to growth, adequate market penetration or an operation of significant size.
Many company owners know little of sales and marketing techniques. The reason is simple: most entrepreneurs are better versed in the products they manufacture or the services they provide than how to sell those products or services. They gained their experience making things or doing things and, in many cases, not in selling those things. Once your company is established, however, any owner or principal operating executive should turn their attention to sales and marketing.
Although the words “sales and marketing” are most frequently presented as a single subject, marketing is quite different from sales. For any company owner or executive who wants their operation to be more than a source of personal compensation, they should understand both as well as how both functions can be applied to the growth of the company. Let’s look first at sales.
To understand how to sell a product or service, start by examining the purchasing decision. List all of the factors that most influence a customer’s decision to buy and then rank those factors by most to least important. Those factors might include quality, design, performance, utility, simplicity, technological advancement, price, size, weight, delivery time, inventory control, customer training, after sales service, the distance from you to your customer, your company’s reputation and your company’s relationship with the customer. Once you have a good feel for what causes a customer to choose your product or service over those of your competitors, you can then concentrate on both improving those factors that are the most important and on presenting them to your potential customers.
Next, study all possible channels into the markets that use your products or services. Determine how those products or services can be most cost effectively presented to the various markets and sold to the potential customers in those markets. If your customers are limited in number or are all within a relatively small geographic area, direct sales using your own salespeople might be the best approach. For a relatively small company trying to sell products or services to a large number of customers nationwide or in overseas markets, independent sales representatives might be used. Other channels into the markets might include catalog sales, an interactive website or telephone sales. You should use all sales methods that can generate results at a reasonable cost.
By the way, if independent sales representatives are appropriate, they should be chosen with care, well trained by you and then monitored continuously. I have a friend who has spent most of his long career consulting only independent sales representatives. He finds appropriate products and services for reps and he finds appropriate reps for companies. He has often told me that training sales representatives is as important as finding and engaging the right ones.
Once you have reached an agreement for an independent sales representative to carry your product or service, you should have them visit your facility at your expense. Make sure they know your key managers, understand how your products are made or your services are provided and know all those factors that affect a customer’s buying decision. You or your sales manager should also make periodic sales calls with each of your reps. Have them devote a day or two to only your product or service with you there so you can demonstrate the sales techniques you use.
Also, get each of your reps to give you quarterly sales goals and then monitor their progress toward those goals no less than monthly. Those who don’t produce should be replaced. In most instances, however, if a sales representative isn’t performing, it’s more your fault than theirs. Virtually all independent sales reps have more than one product or service to promote. They will concentrate their efforts on those that they understand the best, will generate the highest return for their efforts and are pushed by the companies they represent. Actively sell to your representatives, and they will sell for you.
Another important element of the sales function is to understand the sales cycle. Is your product or service one that is purchased immediately when needed or one that is sold over an extended period of months? Do your clients inventory your product? Do they use it or resell it and, if they use it, what is the cycle associated with that use? From the first presentation of your product or service until the purchase decision is made, how can you best follow up with the potential customer? A sales program that addresses these questions and is specifically designed for the sales cycle associated with your product or service is the one most likely to succeed.
In addition, know your customer and know who your customer is. If you sell products through retail stores, you might think the store’s customers are your primary customers. They aren’t, the retail store is. The store must make a buying decision before their customers can buy your product.
If you sell to other companies, determine who within those companies will influence a buying decision and who will ultimately make that decision. Once you’ve determined that, you can then better target your sales efforts.
My father told me years ago that two of the most important elements of selling are to ask for the order and, when you’ve made the sale, shut up and get out. He was right on both points. Many salespeople do a great job of presenting a product or service but are then reluctant to ask the customer to buy. Make sure you don’t have those types in your sales group. As to the second point, I’ve seen salespeople talk themselves out of a sale after it had already been made. If you’ve made the sale, there should be nothing else to say other than, “Thanks for the order.”
And don’t believe the old adage about the mouse trap. If you design and produce a better product or offer a better service, no one will beat a path to your door. With virtually all products and services offered by my many clients over the years, they all had to be sold. They weren’t simply bought. Don’t just answer your phone; determine how to sell your products or services into a well-defined market and then do it.
Lee Rust, owner of Florida Corporate Finance, specializes in Mergers & Acquisitions, Corporate Sales, Strategic Planning, Financing and Operations Audits. He can be reached by phone at 407-841-5676 or by email at hleerust@att.net.
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