Top Challenges and Fast Facts

A study by MarketBridge reveals that 62% of companies cited increasing sales productivity as their top challenge.

Separately, an Accenture survey of consumers stated that 61% of customers believe that technology has not improved customer service.

And finally, 47% of employees say that a lack of accountability is a frustrating part of working in teams.

Does a Silver Bullet Exist in Marketing?

We have observed a number of B2B companies trying to achieve sales growth using only one marketing tool. Think of the company who uses just direct mail to create new customers or the manufacturing firm that uses just manufacturer's reps to grow their business.

Most of the companies that restrict their marketing to only a limited number of tools seem to struggle. There is no silver bullet. Achieving significant growth requires the use of many tools in harmony in order to effectively reach a target market.

What is your experience? Do you know of any B2B businesses that rely upon only one tool and achieve real growth?

If so, we would like to hear from you. Drop us a line and share your story.

The Sales Learning Curve

I am approached nearly every week by young companies that want to accelerate revenue. Many lack a sales and marketing organization to drive growth and are searching for resources to help them reach their goals. For most of these firms they are in the early stages of a new business or about to launch a new product.

While these firms are anxious to realize "hockey stick" growth rates most are actually a long way from significant growth. The reason is due to the learning curve that rests before them. A number of potential issues that require interaction with customers must be addressed and resolved before growth can occur. These issues may include product fit within specific market segments, packaging and delivery issues, selling process steps and the like.

This learning has been dubbed the Sales Learning Curve by Mark Leslie, CEO of Veritas, the 5th largest software company. The SLC is an adaptation from the Manufacturing Learning Curve that says a number of units must be produced in order to gain manufacturing efficiency and reduce production costs.

The same principle applies to sales development in the form of learning about market and customer driven issues and how they impact sales acceleration.

Learn more about the SLC on another blog and see if it applies to your business.

Pricing Management Is BIG!

If you have not seen the front page Wall Street Journal article that was published March 27 on pricing management find a copy and read it. The article featured Cleveland based Parker-Hannifin Corporation and the huge improvement in financial performance that they realized as a result of better pricing management.

We are seeing more and more companies of all sizes embracing disciplined pricing strategies that drive margin lift. Parker Hannifen moved from a cost plus methodology of pricing its 800,000 parts to a value based approach that boosted operating income by $200 million since 2002.

There are several relatively simple and effective tools that can be employed to begin managing pricing better. The best place to start is to begin tracking the average prices on a regular and frequent basis. This will indicate whether prices are generally rising or falling. Until you can monitor prices effectively you are only guessing at the trends.

Tracking average prices casts a spotlight on pricing within the organization and will cause management to ask questions about price changes that will likely lead to better processes.

Sales Teams and Price Increase Initiatives

Our firm has expertise in strategic pricing management which puts us in the middle of working with sales organizations to implement price increases. I can tell you that it is easier to get customers to accept price increases than it is to get sales professionals to get higher prices.

But, it doesn’t have to be that way. We have worked with dozens of companies to implement price hikes. There are several techniques and tools that can make sales professionals become your strongest supporters of pricing initiatives. Here are just a few tools that can make the job a lot easier...

1. Most sales professionals are compensated based on revenue achievement. Consider adding a price level component to the incentive plan. Reward the rep when he sells a product or service at a higher price. There are several types of compensation plans that can be adopted here. Some are implemented on a temporary basis to reward the rep during the duration of the price increase period while others are permanent and reward on an on-going basis.


2. Set average price levels for products and services. Then, track the pricing of each sales rep against the average and post the results for other reps to review. Most sales professionals are competitive and will respond to these scores. No rep worth his weight will want to be below average.


3. Pilot test a price increase with a few of your best sales professionals. Select those reps that you know will embrace the initiative and make it successful. The others will see the success and follow accordingly.

These are just a few of the techniques that we use to implement price increases. There are many more tools that can be effectively executed to improve your return on investment.

Good luck!

Use Pricing to Drive Revenue and Margin

A change is taking place. In the last 3-4 years the interest in pricing management among industry leading firms has skyrocketed. Companies like Eaton Corporation, Parker Hannifan and Cardinal Health have each established new pricing management departments that focus exclusively on price. The Professional Pricing Society, a trade group for pricing experts, has seen its membership grow four-fold in the last few years. New books on pricing management are being published at an unprecedented rate.

Pricing management is a powerful driver for improving financial performance.

Even the smallest changes in price can have a dramatic effect on profit. Consider that the average S&P 1000 firm will realize a 12.5% jump in net profit with a simple 1% price increase. And, of course, the equation works in the opposite direction as well…a 1% price discount cuts profits by 12.5%. The smallest adjustments in price can transform the bottom line for many companies and in some cases mean the difference between profit and loss.

Realizing significant profit gains does not require huge improvements in price. In fact, no other profit driver has the leverage effect that pricing has on the bottom line. Selective, small improvements that may be barely detectible by the marketplace can make a noticeable improvement in financial performance.

Technololgy Sales Stat

Sales & Marketing Management magazine reports that 53% of business professionals check blogs before making technology purchases.

The data was created by Knowledgestorm and Universal McCann’s “Emerging Media Series: Blogs and Real Simple Syndication” survey of 4,500 business professionals.

Six Critical Success Factors to Selling Consulting Services

Selling consulting services is different than selling a tangible product. It is often difficult for buyers to understand the services offered and how those services will benefit the buyer or solve a problem. There are relatively few well-known consulting firms that have the instant credibility to break through the sales cycle. Lesser known firms, or individual consultants, are often challenged by lengthy sales gestation periods that sometimes end without the sale.

Here are six critical success factors to selling consulting services that can help cut through the clutter and get new business. We certainly have found them to reduce sales times and improve our conversion rates in our business.

1. Trust Focus on building trust from the earliest point in your relationship with prospects. Prospects are looking for someone that they know will deliver the goods. Smaller assignments that minimize the buyer’s risk but provide a good return are a good place to start and allows you to build trust with the buyer. Many consultants offer diagnostics to identify problems and potential solutions as a starting point.


2. Create a Well Articulated Value Proposition Intangible products like consulting services need extra help in communicating their value. Make sure your marketing communications program is robust and take every opportunity to communicate to the marketplace.


3. Target Decision Makers Match your value proposition to the real decision makers. Who will really respond to your value proposition? If you are offering manufacturing cost savings, a plant manager may be interested but the Division President may be the person ultimately responsible for profit and loss. Many consultants attempt to sell too low in the organization.


4. All Projects Are Not Created Equal Carefully qualify prospective assignments for the best fit with your organization. Can the client clearly articulate objectives and expectations? Has the project been approved and how is it funded? Is your firm interested in the assignment? What are the potential opportunity costs? Who is calling the shots?


5. Communicate! Intangible products like consulting services need extra help in communicating their value. Make sure that your marketing communications program is robust and take every opportunity to communicate to the marketplace. Make your offerings as tangible as possible.


6. Marketing Has No On/Off Switch We are in an era of 24/7 marketing. Prospects will not take notice of your practice unless you continuously promote it.

Market Development Is Not Sales

Developing new markets is not like selling to existing, well established markets. Expanding into new markets most often requires dedicated marketing and sales resources that are focused on learning and understanding the nuances of a different marketplace.

All too often, companies utilize their existing sales team to address new markets and fail to achieve the growth and market position that they desire. While sales teams can sell into new markets once the market is developed, the development of these markets requires skill sets that are more focused on learning, analysis and adaptation.

Sales teams that are focused on managing existing customers are typically consumed in customer demands and issues and don’t have the time that is necessary to develop new markets. Applying a focused effort over a shorter period of time with the right skill set will yield better results than borrowing resources on a part-time basis.

Big Business in Small Accounts

Where will your sales team look this year to achieve its sales growth goals? If they’re like most sales organizations they’ll be busy managing your biggest customers. However, a growing number of companies are finding a rich opportunity in proactively selling more products and services to their smaller accounts. Look for these accounts among the 80% of customers that deliver 20% of your sales. This hidden treasure is delivering 20-30% growth for those organizations that can adjust their selling approach to meet this groups needs. For a $100 million company, that adds up to an additional $4-6 million in new-found sales revenue.

The key to growing these accounts requires a different approach to selling. The key is to develop a sales strategy that is focused on developing and nurturing relationships with these customers rather than communicating with them only during a transaction or when a problem arises. Developing a relationship with more frequent communication will put you at the right place at the right time when the account is looking to conduct additional business.

Successfully selling to these accounts requires selling skills and communication skills just as strong as your top sales leaders. Smaller sales volume accounts may not justify many personal sales calls. Make sure that the sales professional that is managing these accounts is able to communicate very effectively using all the available technologies including web presentations, telephone and e-mail. These sales specialists are a key part of the sales team and should posses a strong knowledge of the selling process.

Develop an inventory of marketing materials and communication tools that will allow your firm to stay in the forefront of each account. While larger accounts may justify frequent personal sales visits, smaller accounts won’t. You will need every communications tool available to become the top-of-mind supplier for your product category. Prepare and communicates a frequent and consistent stream of successful case histories, company and industry news, technical bulletins and other informative communications that will keep you in the buyers mind. While top-notch sales professionals are required to get orders, developing and managing market communications must be handled by marketing professionals. Don’t ask your sales team to manage the communications program. Keep them focused on closing sales.

Small accounts offer tremendous pricing opportunities. While your biggest accounts are constantly demanding price give-backs, smaller customers will often support higher prices. In our earlier example of the $100 million company, a 4% price increase on the smaller accounts delivers an additional $680,000 in profit margin. Even the smallest increase in price can have a dramatic effect on income. Strategic pricing management is seeing unprecedented growth as firms look beyond cost reduction to improve financial performance.

With continued competitive pressure, companies need to consider every avenue to achieve growth. Small accounts offer a significant opportunity to achieve incremental revenue and profit growth.

Relationships or Process?

I was recently approached by the sales director of a small B2B company that was launching a new product in the U.S.. He was searching for sales representatives that held personal contacts within the markets that his firm targeted. His reasoning was that the sales representative could open doors that would lead to new sales for his firm. Certainly, this strategy has been successfully used for decades. Sales reps nurture relationships within specific market spaces that become their equity in business.

The pattern that often emerges with a relationship based strategy is an initial burst of introductions to new prospects followed by a steady decline in activity as the representative exhausts their inventory of viable contacts. Today, the pattern is accelerated as decision makers are more transient in many industries. Even the best sales representative has limits to his network. Add buying teams, multiple locations and global organizations and the challenge to maintain relationships with all the right people becomes difficult to say the least.

We are witnessing more companies, especially smaller to mid-sized firms, embracing a commercialization process as a means to create new business. A process approach recognizes all the steps necessary to acquire new business beginning with creating awareness to consideration to preference to initial orders to filling repeat orders. There are many additional process steps that can be added. When a firm can define the process for its own business it is taking the first steps to control its own growth. Once a process is defined the dependence on specific individual sales representatives diminishes as process steps and the roles of individuals are clearly defined and can be implemented by anyone with an appropriate skill set.

The firm now has control over obtaining new business as opposed to relying on individual representatives contact network. This helps to eliminate the problem when a star sales representative leaves a firm and the ability to create new business goes with him. By defining a commercialization process you are essentially creating a business development machine that you own and control. The power to generate revenue growth now resides within your firm and not in the hands of individual sales representatives.