Tag Archives: sales_leadership

Does Your Company Differentiate By Offering Good Products With Virtue?

Originally published 04/23/08

If you want to become wealthy, “create good products with virtue.” The man who made that recommendation, Ted Leonsis, should know. As co-founder of America Online, he has repeatedly used that idea to build a financial empire.

But today’s world is so full of non-virtuous products and customer experiences that there are websites, blogs, and government agencies dedicated to sharing information about the perpetrators. Given that, could simply creating good products with virtue provide a major differentiator for a high-performance brand?

As Mr. Leonsis observes, with the unparalleled amount of customer sentiment available to producers today, “there is no reason to have bad products or services.” If only it were so easy. Companies spend many billions of dollars in pursuit silver bullets in the name of Sustainable Differentiation—often with little results to show for the effort. So whenever I uncover a “good product with virtue,” it seems awesomely different.

Do we chronically have examples of non-virtuous products because managers and investors don’t care about having virtuous ones? Because companies don’t know how to produce good products? Because many really smart people simply talk too much? What makes a product “good and virtuous” in the first place? And how can an enterprise exploit such differentiation through its sales and operational strategies?

An example provides help toward answering these questions. I thought back—before Web 2.0, viral marketing, email, data warehouses, even before Internet itself—and remembered how a grocery retailer, Giant Food Corporation of Maryland—deployed “good and virtuous” as a formidable competitive weapon for over thirty years. What differentiated the company? Consistent delivery of quality, value, and service to every customer. More than mere words, these differentiators created complex operational challenges in a demanding, highly competitive business serving a wide demographic.

One highly-effective resource the company used was a Consumer Board, a low-technology tool that was radical and controversial during the early ‘80’s, when I served as a board member for two years. As remarkable as it was at the time for a retailer to provide consumers a voice, I learned what was more significant was how Giant delivered its “good and virtuous” differentiation, gaining the largest share of the grocery market in the Washington DC area in the process.

Four important tactics stand out most in my mind:

1. Bring the consumer’s voice to the executive suite. Before any of its rivals did so, Giant not only recognized the primacy of the consumer, but organized its management and operations accordingly. The Giant consumer executive at the time, Odonna Mathews, had the authority to enact recommendations that the board made. Other boards simply provided information to a corporate representative who lacked decision-making authority.
2. Direct senior management involvement with consumers. Izzy Cohen, the Giant CEO at the time, regularly attended our meetings.
3. Tight focus on the needs of individuals and communities. In creating “good and virtuous” differentiation, Giant understood that short-term profits were worth exchanging for customer loyalty. One prominent example was the Consumer Board’s recommendation for Giant to offer tabloid- and candy-free checkout lines, which the chain implemented well before the rest of the industry.
4. Independence between quality initiatives and store-level financial performance measurements. For example, if an ailing freezer needed replacement, the store’s manager wasn’t penalized with the cost of the equipment. Giant’s expenses toward quality differentiation never impacted a store’s profitability. Internal conflicts were eliminated.

The esteem that Giant Food held in the communities it served cannot be overstated. The most compelling story occurred during the riots in Washington, DC following the assassination of Martin Luther King Jr. When hundreds of other businesses were destroyed or damaged, community activists protected the Giant Food stores, all of which survived unscathed. That relationship and commitment could not have been achieved without creating “good products with virtue.” The financial rewards speak for themselves.

Trust, Shmust! We Need a Sales Mensch

A shondah* that in 2011, people have to teach these skills to adults:

How to build relationships
How to be a trusted advisor
Three ways to build rapport
How to build trust in a sales relationship

But it’s no surprise. Being an adult simply reflects the passage of time, which has nothing to do with emotional maturity.

So who can create great sales outcomes without having to being told how? That, I can tell you in one word: a sales mensch! “Like who,” you ask! Like Dicky Fox! There’s a mensch! You should be as sincere and honest!

A sales mensch is more than an Experienced Professional. More than an Honest Salesperson. More than a Trusted Advisor, even. “You’re a mensch” is the highest accolade one person can give to another. To be a real Sales mensch requires nothing less than character, rectitude, dignity, and a sense of what is right and responsible.

When you are a sales mensch, you don’t need the oft-hyped rapport-trust-relationship stuff, because you’ve got that—and more. And you don’t pick up mensch-ness on Day 2 of a sales skills training program or from bullet-ized tips on a PowerPoint slide. Which explains why there aren’t more sales mensches.

Nevertheless, here’s what sets sales mensches apart from the Everyday Salesperson:

1. A sales mensch helps people who cannot ever return the favor.

2. A sales mensch always strives to do the right thing in the right way, and he or she never says, “Well, at least we’re not as bad as (fill in the blank)!”

3. A sales mensch helps people without regard for their station or status within a company or society.

4. A sales mensch recognizes that mensch isn’t a title that is awarded, rather a quality one always strives to maintain.

5. A sales mensch is humble, and recognizes the contributions and sacrifices that others have made toward his or her personal achievements.

6. A sales mensch‘s zeal is always tempered by recognition of context–that is, a sales mensch keenly understands that a prospect’s situation and world view right now has many competing priorities. A sales mensch shows empathy.

The best quote on menschness I’ve seen comes from Alan Gregerman on CustomerThink: “We win in business and in life when we respect the value of customers and prospects. And when we seek to be worthy of the trust they put in us.”

That’s a sales mensch! What’s not to like?

* Shondah: yiddish– shame

Sales Team! Show Me the Money! And Profits! And Customer Satisfaction! And Good Ethics! And . . .

People tell me that over time, civilizations become smarter. But I’m not so sure. Back in 1998—almost 15 years ago—courtroom testimony about the Prudential Insurance sales scam included “Your judgment gets clouded out in the field when you are pressured to sell, sell, sell.”

But just two weeks ago, Jason Gay wrote in The Wall Street Journal, (Cash a Large Check, Repent, Refocus, Cash a Larger Check, July 24, 2012) “A big-time football program can generate tens of millions per season, and though profits are hardly guaranteed—a stunning proportion of athletic departments run at a deficit—this pursuit can be used to justify a program’s excessive power on campus.”

Clouded judgment, redux. In 1998, Penn State’s administration might have benefited from studying the Prudential case. Another learning opportunity, squandered.

Revenue uber alles! If the Prudential and Penn State stories don’t give executives pause to consider the risks, nothing will. Even with the NCAA’s harsh sanctions against Penn State, governance problems won’t evaporate—from college football or from anywhere else. The more zeroes in potential revenue, the more people drawn to the bacchanalian orgy—except they’re getting drunk on dollars.

Few organizations are immune. Ask a CXO what Sales must provide for his or her organization and the response comes searing back with the emphatic velocity of a Roger Federer forehand: “Revenue!” Yet, while most executives readily acknowledge that high revenue won’t overcome bad strategy or out-of-control spending, they don’t recognize the myriad risks that accompany tasking the sales team with the singular mission of generating it.

Asking whether unprofitable revenue is valuable brings a similarly quick response, equally emphatic: “No!” But that answer cracks open the door just enough to expose the truth that sales teams are often tacitly urged to deliver more than revenue. Profit matters. “And are profitable customers valuable if they didn’t enjoy buying from you, and aren’t likely to buy from you again?” “No, that’s not valuable, either,” I frequently hear. “What about customer satisfaction, Positive Experience, and customer loyalty?” “Yep, Sales must deliver those, too.”

And because we’ve all heard customers lament too many times “. . . after we bought, we never heard from our sales rep again,” Sales must also create—and keep—raving fans. Add to these deliverables the need to bring competitive knowledge and customer insight into the organization, and executives now have a more complete, better-balanced picture of how Sales fits into the overall mission of an enterprise. Delivering on the monthly revenue commitment comprises an important part of the picture—but not the only part. Far from it.

Confusion lingers over just what companies want from Sales. A large global strategy consulting organization I worked for wanted to grow revenue and to reduce the business development workload for their senior partners. They envisioned a new sales entity within the company, and staffed it with experienced professionals. When they hired me to join the team, they told me a detailed compensation plan would be prepared and ready when I started two weeks later. Two weeks went to four, then six, then beyond. “We’re still trying to figure it out,” the lead partner eventually told me with a sigh. Finally, when the plan was presented, a sizable chunk included discretionary compensation, to be awarded “if I like the job you’re doing,” he said.

Comp plan six weeks overdue, discretionary compensation . . . Hmmmm . . . A pattern began to emerge. When another partner asked me to hand-deliver a small proposal he had prepared for a government client in downtown Washington, I said “the in-house courier company does that.” “But that’s what Sales is supposed to do,” he insisted. In hindsight, all of this was emblematic of an organization that had, at best, a blurry picture of what Sales does—if it had any picture at all. There’s more, but I’ll skip to the end: the company dissolved its entire sales team within twenty-four months.

Most companies don’t suffer such extreme outcomes, but many stumble along, under-performing, and wondering year after year why sales skewed off the rails. Lack of clarity about the value Sales must return to the enterprise often bubbles up as a root cause.

Sales organizations provide the greatest value when they consistently deliver on:

1. Growing revenue. No surprises—it’s on everyone’s list.
2. Maximizing profitability. Often overlooked, but equally important.
3. Attracting and maintaining customers. Encompasses the R in Customer Relationship Management.
4. Managing governance, risk, and compliance. Removed from the domain of the sales organization for too long. But today, how revenue is generated matters as much as whether it’s generated.
5. Improving effectiveness and organizational learning. In today’s hyper-competitive global market, complacency and hubris bring great risk of failure.
6. Ensuring agility and competitiveness. “Sales must change!” We hear it all the time. But few companies make changing part of the job description.

These six constitute a shaky equilibrium. That’s OK–I’ll take that over lopsided, anytime! Amazing to think that if Penn State and Prudential were measured on revenue achievement alone, they would be considered wildly successful. And for a time, that was exactly how they were regarded, until the whistles began sounding. To prevent that from happening, sales operations must become more balanced, and the measurements of sales achievement more nuanced than championing revenue over everything else.

Analysts cheer when publicly-traded companies achieve financial targets. But for many organizations, getting there meant Sales contributed more than just revenue. Organizational leaders must develop a clear understanding of what those contributions are, and they must identify the strategic value Sales must offer every day to accomplish a company’s overall mission.

Six Sales Risks Most Companies Are Afraid to Take

Remember the kid in your elementary school who could skillfully skateboard across broken pavement and out into traffic? He’s grown up, and figured out a killer sales strategy.

He’s not smarter than you. You already knew that. He’s just less fearful. And even though he has more scars, he’s learned much along the way.

It’s not easy being bold. Employers regularly beat the living risk out of marketers and business development professionals. “We want accurate forecasts,” they insist, leading to a mental contagion that rewards playing it safe. People make fewer waves when they’re quietly harvesting low-hanging fruit. But long-term, will squelching risk enable a business to flourish?

Before you answer, reach into your desk drawer, gym bag, or stereo cabinet, and find your Sony Walkman. If you don’t have one, or if you aren’t sure what a Walkman is, I’ve made my point. By playing it safe, Sony ceded the market it created to Apple. The rest is history.

“Financially, the Japanese firms can’t take the risks,” said Yuji Fujimori, a Tokyo-based electronics analyst for Barclays. “. . . The choice not to take risks has its own risks: the danger of falling into a downward spiral. Losses can lead to smaller investments in future technologies or new products,” according to a Wall Street Journal article (How Japan Lost Its Electronic Crown, August 15, 2012).

Sales strategists take note. When it comes to planning for future revenue, playing it safe might be the least safe thing you can do. Here are six selling risks many companies are too afraid to take:

1. Having a physical presence in a country or city. Woody Allen said “half of life is showing up.” Yet, some executives are reluctant to commit to establishing operations locally, preferring to first determine whether there’s demand for their company’s product or service. That can create a self-fulfilling prophecy. “Unless you are there, you’re not perceived as being in the market,” the CEO of a large multi-national government contractor told me last week.

2. Developing customers in new market niches. One executive I talked to found new business opportunity in Europe for his company’s consulting services. When European governments were deregulating energy, he pursued the consulting work, even though the engagements were outside of his company’s core expertise. When energy markets were later deregulated in the US, his company was well positioned to win the contracts.

3. Hiring salespeople with experience outside of an industry or technology. “Hardware people can’t sell software.” I’ve heard that statement in reverse, spoken with equal conviction. Yet, one sales VP told me that provincial mindset doesn’t work for his company. “We used to seek people with experience in our space. But we’ve found that our most successful salespeople have a strong background in solving a range of business problems.”

4. Airing dirty laundry. Few companies like negative sentiment, but some recognize that it’s a business fact of life. The problem is, placing customer service processes into the metaphorical fishbowl of online social media is not something most companies embrace, or are prepared to handle. But companies that consistently resolve customer problems quickly and effectively can use social media to prove a hard-to-replicate competitive advantage.

5. Making the company (really!) personal. The president of a men’s clothing startup told me that people who buy from his online competitors would never expect to meet or speak to the webmaster, shipping staff, or technical personnel. Instead, “people who come here to visit are pleasantly surprised to learn that they can talk to any of us.”

6. Providing an unconditional, money-back guarantee. An anathema to many, one VP of Sales I worked with told me it’s low risk for him. “In twenty years of business, not one customer has ever requested a refund.”

Which of these risks might appeal to the skateboarder you knew as a kid? Hard to say. Maybe none of them. But there’s no doubt he has found others that are worth it.

Sales Mentorship: You Can’t Survive on a One-Way Street

We know what we are, but we know not what we may be.—William Shakespeare

“You better take that last spot in the overhead bin,” implored my seatmate on a recent flight, as I contorted my bag so that the door would latch. “If you don’t, somebody behind you will grab it.”

“Assertiveness and opportunism co-mingled . . . that seems awfully familiar . . . ,” I thought. “I’ll bet she’s in sales.”

In fact, she was—for a global advisory services company. But as I learned during our conversation that continued for the duration of the five-hour flight, she had a specialty that makes mere mortal salespeople quake and tremble. Her job was to resuscitate her company’s former customers. Not just any former customer, though. Angry former customers. Customers who had said in a thousand different, unpleasant ways, “I’ll never buy from your company again . . . or the horse you rode in on!” No need for manual gestures to embellish the sentiment.

“I like taking on the challenging ones,” she said, adding, “I’ve gotten pretty good at it.” She told me she was heading to a sales meeting for her DC-based company, and I could tell from our conversation that she was making a solid living in this unique sales niche.

Whatever you think it takes to excel in sales—motivation, tenacity, focus, empathy—it was abundantly clear that she had the right stuff. No need to waste time checking a list of top-producer attributes. “Some salespeople want to get to ‘no’ quickly, but I simply don’t accept ‘no’ at all.” Put herself through college. Paid off her loans in six years. Highly confident, and not shy about dictating terms to management. “I tell them, ‘this is what I expect for commission. If I don’t make my number, six months from now, you’re either going to fire me, or I will have already quit because I’m not making the money I want to make. So neither of us has to worry if this isn’t working out.'” All is fair in love and war.

She explained how other salespeople learn in her organization. “Our knowledge sharing is not one-way. When new salespeople come on board, we require them to learn a specific area of the industries we serve, and then to teach that to others. It’s the best way to gain understanding, and management insists on it.”

She told me that others outside of her division frequently call on her to mentor them. “I listen in on a lot of phone calls, and they listen in on mine,” she said. “But I require two things right up front: they have to tell me one thing that they learned from me, and they must give me feedback on two things that I could improve. I’m prepared to hear whatever they tell me, and I let them know that. And if they don’t give me feedback within a day or two, I don’t help them again.”

No surprise she’s a top producer. With mentorship, you can’t survive on a one-way street.

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