As products and services mature, they become commodities. Price pressure kills margins. A sales executive recently told me, “There’s margin in the mystery.” When special features become table stakes, buyers are not willing to pay a premium. For those who are fighting in a competitive market, this resonates. For those who are selling bleeding edge products, it’s only a matter of time.
Sales organizations are seeing their margins shrink, even as revenue grows. SBI’s 8th Annual Research Report offers a series of Best Practices for combatting this. Download “How to Make your Number in 2015” to read more.
To drive margin there must be differentiation in a value proposition. There are 3 core differentiators for sales organizations:
1) Selling the best product: If you’ve got it, then you’ll command a high price. Gross profit will be healthy.
2) Being the low cost provider: Organizational efficiency allows you to beat your competition on price. Margin is thin but Gross Profit dollar recovers due to volume.
3) Knowing the buyer best: Your organization may not be able to compete on product or price. In this case, buyer intimacy is the appropriate strategy. Here, your organization understands the customer/prospect’s needs better than the competition. You engage buyers earlier, and with more relevant insight, guidance and recommendations.
An Engagement Strategy has 2 components. Each is analyzed in our report:
1) Prospecting: Filling the sales funnel with enough opportunities to make the revenue goal. Modern prospecting allows a sales team to help buyers early and often. Sales reps can follow and stay informed on what leads are saying and doing. This allows your team to identify a buyer’s objectives, obstacles, fears and ambitions. They can engage them with advice and information that will help them solve their problems.
2) Sales Process: Build a sales process tailored to how your buyer wants to buy. This will improve win rates and deal sizes while shortening the sales cycle. Once a lead becomes an opportunity, additional support should be given. Sales Ops must enable the organization with techniques, tools and coaching methodologies.
Sales Ops should work closely with the VP of Sales to administer these processes. It is a uniquely qualified team. It can build or update, execute and measure successful programs. With strong monitoring, the process can be augmented after release. Constant iteration of these processes is essential and can’t be done without insightful data.
Before the end of the year, sit down with your VP of Sales. Talk to him or her about an engagement strategy. The report will guide your conversation, and help you map an operation plan. If helpful, we can arrange for a free 90-minute strategy session. Simply download the report or reach out to me directly: firstname.lastname@example.org. Look forward to connecting.