SalesSquawk

Solomon Says: "The Structure of Sales Matters"

Solomon Says: "Structure of Sales = Mental Preparation, Finding, Engaging, Advancing, Qualify, Communicate, Commit, Implement, Satisfy, & Repeat"

All sales efforts are not created equal.  

Neither are sales people, sales managers, sales organizations, products or buyers.  

Because of this, the sales effort that worked in one company will not necessarily work in another.  Unfortunately, the training a sales professional received in one organization will often not translate well either.  In fact, the best spend a company can make in training is one that is customized to their own product or service!  While more expensive to start, the long term reduction in "cost of sales", and "time to money" from a new sales person is far more impressive than a bank executives bonus!

Rather than purchase a one size fits all sales training program, either for the company or the sales professional, the most effective path is to understand the structure of sales, and then build your companies sales process, and sales education around the structure you actually operate in.

To create the greatest possible efficiency in sales, Solomon offers the following structure as the fastest path to money with the lowest effort and cost.  

    

Mental and Emotional Preparation
3 Major Sales Phases
Opportunity Discovery	Sales Prosecution	Post - Sale
Find	Qualify	Implement
Engage	Communicate	Satisfy
Advance	Commit	Repeat / Referral

If I can help you with this, give a shout.  Your career in sales matters!

Respectfully submitted,
Solomon

Indexing Complexity Continued

What, you didn't read the first post?  I said this has been niggling at my mind for 15 -17 years!  I know it has been several months since I promised the continuation but A. Life Intervened and B. I wanted this topic to be understandable and usable.  Had to think about it some more.  A couple months more shouldn't have mattered?

Truth is I feel a little guilty about not finishing this earlier and I know there is a certain relationship we have that says I will post regularly and I haven't.  Maybe it is just me.  If not I hope you will accept my apologies.  Enough housekeeping.  Lets talk about sales.

Our last conversation defined the value of indexing complexity as 3 things;

1. If I know how to deal with the complexities of my selling environment than I will have an easier time and be more successful in my efforts
2. If I am hiring sales people, or being hired as a sales person, matching experience regarding complexity will save a lot of time and frustration, as well as dollars for everyone in the longevity of that sales position.
3. If I am selling in multiple environments, being able to categorize, and adjust to varying levels of complexity will allow me to more effectively relate and excel in those environments.

In all three cases the values have a direct impact on dollars for the seller, time to revenue and quality of life.  Pretty good reasons in my book to get a handle on this.

We further discussed that indexing complexity served not what you do and when, but rather why you do those things.  Sales Process is for what you do and when.

Finally, we talked about what are the three things I can think of that are the roots of indexing complexity;

1. Length of the sales cycle
2. Dollars in the deal
3. Choosers Participating

Each of these elements plays a separate and distinct role in determining who is suited to sell in that environment and what is necessary to be successful.  Partially this is because of the amount of impact the sale has on the buyer and partially it is based on how well the seller relates to the buyer.

Length Of The Sales Cycle goes back to the conversation about choosing to buy dessert after a meal versus choosing to buy a hydro-electric generator that goes in the bottom of a dam.  Pretty much the extremes on the scale.  LOSC would also include a weighted value for how many calls it may take to finalize a decision.  Calls may include developing a relationship or gaining information to properly present a solution.  The formula for developing the index on LOSC would be increments of time, times number of calls necessary to gain a decision to move forward or not. 

I believe it is important to use a standard time increment and for that purpose, the Solomon Sales System has adopted a week as the standard increment.   Longer periods are expressed as whole numbers and shorter periods are expressed as fractions.  More important than the increment itself is the database of standards to compare against and I maintain that database for several organizations.

So an example would be a standard sales effort that takes a half week and 3 calls would have a number of 1.5.  Rounded up that is a complexity number for LOSC of 2.  The example of the hydro electric generator which I know was 3 years or 156 weeks times say 43 calls would be 6708.  For our purpose that is way to large a number to use effectively and I round it to the nearest number between 1 and 99.  In this case, 99.

Right now then we have a Complexity Index of, CI:99-?-?.

Dollars In The Deal. The next item to figure out is the number of dollars in the deal.  This is less a figure based on how much someone charges for their product and more based on what percentage of the monthly financial revenue of the buyer does the sale represent.  So buying a house for example, the number of months it takes someone to earn money to pay for the house (not the mortgage, the entire price of the home) is a representation of the impact of the home purchase on the buyer.   A 500,000 dollar home will take 58 months for someone earning 100,000 dollars a year if all their income goes into the purchase.  It will only take 12 months though if you earn 500,000/year.  It doesn't matter if the buyer is a person or a company, each has their monthly revenue as an impact determinator.  It is important to recognize that we are indexing this for the purpose of equating sales skills or experience to the standard buyer.  If we are a Realtor selling to both low end and high end homes, than our skills need to encompass all those products.

Again, we can use a number from 1 to 99 and rounding to the nearest whole number.  The example of 58 for dollars in the deal, along with the unlikely number of 2 for the sales cycle would give us our new complexity index. CI:2-58-?.

Yes I know, this is very complex, and you have to wonder about now if it is worthwhile.  The answer is in many cases yes and in many others, maybe not so much.  It is excruciatingly valuable if you are responsible for the revenue of your company and hiring the right team to bring that revenue in.  (I would accept however, your emphasis on the excruciating part.)

Finally factoring in the choosers completes the index.  Choosers is a number based on the total number of people who can say yes OR no times their responsibility to the individuals/families/companies greatest ROI.   Again going back to the buying units annual revenue, who in the choosers group has responsibility for the greatest amount of income to the unit?  What percentage is that of the annual revenue for the entire individual/family/company?  Using that percentage, DIVIDE by the number of choosers who can say yes or no to the choice.

In our home-buyers example, 2 choosers with responsibility for 100 percent of the families revenue would be 2 divided by 1, or 2 as the value.  It is important to know that smaller number is the least complex in this element.  Again, round to the nearest number between one and 99 and god help you if you exceed 99.

Our new Complexity Index in total than reads like this, CI:2-58-2.  This indicates a short cycle, financially impactive, not too complex sale cycle.  If this is the standard for your sales organization, than you will want to hire people from any sales background that have been quick, good with pressure and dollars, and comfortable with smaller groups of people.

What we have effectively done is taken very complex human and financial scenarios and reduced them to a numeric value.  The numeric value can be translated across multiple products and services and let you know whether the person you are intending to hire or work with has the skills, emotional intelligence and maturity to deal in this market regardless of their previous background.

This for me though is a work in progress and will one day be relegated to a computer program.  Far too difficult to work with on a daily basis, it is nevertheless, an important component in hiring and education for successful sales teams.

Respectfully, (and mentally exhaustedly) submitted,

Michael D. Goodman

Indexing Complexity

It's been niggling at the back of my brain for something like 15 - 17 years.  It came out the other day and reminded me of the birth of the thing from the good guys chest in the movie Alien.  In this case though, it is the answer to something valuable for all of us sales folks.  It started when I met a man who sold generators.  I am not talking about your basic generator that you go to Sears to buy you understand, I am talking about dam generators.  That isn't an epithet.  That is a complex sale.

You see his job was to sell those monstrous hydro electric generators that live at the bottom of dams across the world.  Water flows through the dam, powers the turbine in the generator and the generator sends power to millions of people anywhere close.  The thing is, how many of those generators do you suppose someone wants to buy?  For that matter, what do you think the sales cycle is on that kind of thing?  And on an only marginally related note, how do you suppose they get those things in the dam after it's built anyways?

Well, I never found the answer to questions one and three but I can tell you the sales cycle on that generator is 3 years.  Yes.  365 x 3 = 1,095 days to make a sale.  That seems to me like a long time to go without a paycheck but then he reassured me that the commission on the sale of one of those things certainly covered him for the next 3 years.  Also that he generally only worked on one sale at a time.  Wow.  Interesting market space.

Now when I went to lunch with him in Tucson, the waitress asked us if we wanted dessert after the meal.  It was a good restaurant and I was in a fine mood so I accepted.  Not that complex really.  She offered and without a second thought closed the sale.  That was for me, the birth to understanding the question of complexity in a sales cycle.

Miller-Heiman has long made a training practice of teaching Strategic Selling or understanding the complex sale.  In their world, a complex sale is any sale in which two or more buyers are involved in making the choice to accept something new.  I think however, that to really understand the complex sale, you have to factor in a number of other items.  Frankly dear reader, I heartily challenge you to challenge this notion.  It is a conversation well worth having and I intend to have it repeatedly.

It is worth having for a few simple and valuable reasons.  The single most important one is that understanding complexity in both the product/service and the person doing the selling creates a much higher likelihood of success for everyone.  If I as a salesperson don't know how to handle the complexities of a product I am selling than clearly I wont have as successful a time moving my goods.  It is important also because if I am a business and I am hiring a sales person, I want to make sure the salesperson has the greatest likelihood of success.  If not and I have to lose that salesperson, I have lost significant productivity, dollars and opportunity in the turnover.  Thirdly, If I am a sales professional and I have multiple products/services to sell, and I understand the complexity of each and of the buyers who want them, than I know better how to go about connecting and closing the sale in that environment.

I know.  A mouthful huh?

Well, here are some thoughts on how to do this then.

Number one, the level of complexity of sale of any product is based on the buyer not the seller.  What do the greatest number of target product buyers operate like?  Target as in specifically who I am trying to sell to.  Number two, don't confuse complexity of a sale with the process needed to close the sale.  The process of a sales cycle relates to what you do and when.  The complexity of a sale relates to why you do those things.

In my humble opinion then, the elements of complexity of a sale are threefold.  They are;

1.  Length of the sales cycle.  That is what unit of time measure does it normally take for this company to make a choice about moving ahead or not.

2.  Dollars in the deal.  How many dollars is this going to cost the company and can they afford it.  The more dollars it costs them, the more intensely they will need to scrutinize the transaction in order to make it worthwhile for them.

3.  How many people are involved in this choice?  We have all seen this repeatedly I am certain.  The more people expressing opinions in a decision, the more work it takes to get to the decision itself.  On a side note, most of the people expressing opinions are really no-sayers much more than yes-sayers.  We are not so much getting them to say yes but to stop saying no.  On another side note, the more people in the process, the more different ways the decision is examined and consequently the greater likelihood of a good decision for the company.  (not an absolute by any means)

So my challenge is this, am I missing any of the levels of complexity in why we make the activity choices we make to close a sale?  I know there are hundreds of sales thinkers out there and I am really looking forward to understanding this more effectively.

Next time my gentle reader; I will share the formula I have come up with for indexing this complexity.  It was exciting to realize it could be done and fun to figure out how to do it.  But you know, maybe I am just kind of weird that way....

Respectfully submitted,

Michael Goodman