Kahle Way B2B Sales Blog

By Dave Kahle

I just hung up the phone from a coaching call with one of my clients. He was applying for a significant executive position, and wanted my help with his resume and interview strategy. We talked for a bit, and I suggested a different way to look at his resume. 

A light bulb went off. All at once, he was full of energy and enthusiasm. Just a moment prior, he was sober and analytical; now he was excited and couldn’t wait to get at the task of revising his document. In the matter of a few moments, something changed. As a result, he now saw possibilities where before there were only obstacles.

What changed?

His perspective. The situation was exactly as it was a few minutes earlier. He was the same person, with the same set of skills, life experiences and qualities of character. But he saw things differently, through a different lens. His perspective changed, and that changed everything.

That experience was, from my side of the table, a great reminder of the power of perspective to stimulate and shape behavior. We see examples of it all around us.

Our perspective, in many ways, influences and shapes our actions. I have often observed that people generally find that for which they look. I’m not talking about our misplaced car keys. I mean in situations involving dealing with other human beings, we generally see the qualities and traits of character that we expect to see. For example, as sales people, we may go into an account with the perspective that this account is populated with small-minded people who are going to squeeze us for every penny they can, and choose the lowest cost provider no matter what. Guess what? Generally, that’s what we find.

On the other hand, we can go into the account with a different perspective. Let’s say our point of view is that this account is run by well-intentioned people who want only the best for their organization. Amazingly, that’s generally what we will find.

Now don’t jump all over my example and claim, “Wait, some people really are penny-pinchers, regardless of what I think.” Granted. People are different, and there are some in every type and classification. I’m not talking about them, I’m talking about us.

In my example above, the objective truth is probably somewhere in the middle. They may be well-intentioned, striving for quality, and cost-conscious. Don’t miss the point. If we expect people to be untrustworthy, it will be their untrustworthiness that rises to the surface of our radar scan. If we expect them to be kind, we’ll notice their kindness. If we expect them to be self-absorbed, we’ll notice their lack of concern for others.

And, since we generally notice those qualities and traits that we expect to see, that perspective changes and influences our behavior. That’s the point. I have often observed that, when people talk about other people, they really reveal more about themselves than they do the subject of their conversation. That’s because their judgments reveal their perspectives.

Let’s go back to my example. Regardless of the objective truth of the issue, if our perspective is that they are penny-pinchers, our experience will generally confirm that, and we’ll treat them that way.

Clearly the opposite is also true. If we expect them to be value-driven, we’ll see them that way, and we’ll treat them accordingly.

The thing that makes the difference in how we treat them is not them, it is our perspective of them.

As a life-long educator and sales trainer, I have observed a powerful truth of human behavior. It is this: Our perspectives on ourselves are far more important than our perspectives on other people. As we see ourselves, so shall we be. If we see ourselves as victims, we will forever be a victim. If we see ourselves as successful, we will eventually arrive there.

If, therefore, we can uncover and release ourselves from our limiting perspectives of ourselves, we can transform our behavior and enjoy dramatically improved results.

I’ve seen it countless times in the work that I do. I’ll have people come into my seminars with the perspective that this is just a job, and leave with a vision of themselves as professional sales people, and proud of it. Since they now see themselves as professional sales people, they act that way. As a result of their changed actions, they enjoy dramatically improved results. Here’s the equation:

Changed perspective = changed actions = improved results.

But the principle is bigger and more applicable than just sales. It applies to every aspect of our lives. The more I reflect on my life and those around me, the more I see that so much of our behavior can be attributed to perspectives gained during our formative years.

For example, for my entire life I have been both empowered by and hindered by the perspective that I was forever on my own, independent, self-sufficient and self-contained. That perspective was a direct result of my parents’ intentional actions to instill it in each of their six boys. My father had a heart condition and was never expected to live a full life. My parents, therefore, intentionally instilled that perspective into us to enable us to get along in a world without a father’s presence.

That has been a powerful perspective, shaping my actions and character throughout my life.

So, too, for each of us. The perspectives we gained as we grew up shape our actions and reactions. They harden and form into habits, attitudes and eventually, character traits.

If we want to change our results, then we ought to work on changing our perspectives.

Yours,

Dave

by Dave Kahle

A: Thanks for the question. Believe me, I understand the constant pressure on your price. I wish there were a simple, 25-words or less formula for increasing your margins. There isn’t. What there is though, is a set of tactics that have been proven effective in increasing your margins, even in the most difficult of markets. Pick and choose from this list of specific, proven tactics and them apply them methodically, with discipline, over time, and watch your margins slowly grow.

1. Add a point to routine quotes and bids.

Most people get into ruts when it comes to quoting a certain product or range of products. We fall into habits and just naturally put a standard mark up on the final price. Break out of the rut, by trying one point higher. For example, if you routinely quote some product category at 20 percent gross profit, try it two or three times at 21 percent, or 20 ¾. Chances are you are leaving some money on the table by using the same mark ups you’ve used for years.

I know one point doesn’t seem like a lot, but it typically falls right to the bottom line. Multiply that times every product and quote that you make for a year, and you would have added substantial additional margin to your business.

2. Add a point on price and product changes.

Let’s say several of your customers are routinely buying a product line from you. You have it in at 18 percent gross margin. The manufacturer raises his price to you 3 percent. You refigure the customer’s new price at 19 percent margin. You’ve just gained a point.

Every price, packaging, and product change is an opportunity to add a point or so.

3. Promote higher margin items.

In every industry with which I’ve been involved, there are high volume items that almost every sales person focuses on, and then there are very low volume items that most people ignore. That’s too bad, because the high volume items are usually the lowest margin, while the odd ball requisition items carry margins that are often multiple times higher.

A low volume item that is too small in actual dollar volume to interest your competitors is a golden opportunity to increase your margins. So, make it a point to present and demonstrate those low volume items that are not nearly as price sensitive. When most of your business is going through at 18 percent, it’s amazing what a few items at 45% can do for you average

4. Obtain the competitions’ pricing.

We all try to do this before the deal is done. It is, however, much easier to gain this information after a deal is done and then use it for the next round. After the deal is done, and the customer has made up his mind, just ask about the competitive pricing. Whether you won the deal or not you can still use the opportunity to collect useful information. Ask the customer to share with you the prices from every one else, after the business has been awarded. At this point, there’s little pressure on the customer to keep that information confidential. After all, it’s a done deal. No harm in divulging that now. 

As you gather the information after the fact, analyze it to see what patterns your competition is using in their price quoting. 

Use the patterns and insights you gained to predict their next quote. Instead of fearfully using very low margins because you are afraid of losing the business to a competitor, you’ll have much better information on what your competitor will probably do, and you’ll find yourself not deeply discounting so often.

5. Give the customer a reason to pay more to buy it from you.

Why should the customer pay more to buy it from you? So many B2B salespeople look on every sales call as purely a discussion of product and price that they fail to consider the totality of the factors that influence the customer to buy. Now, if there is absolutely no difference between buying it from you and buying it from the other guy, than the customer should go with the lowest price. However, I very rarely have seen there to be absolutely no difference.

Your job is to identify all the things that are different when the customer buys it from you. Put those things into a list, turn them into statements of benefit for the customer and memorize the presentation.

Then when the customer says, “You’re a point or two too high,” instead of discounting, share with the customer what he/she gets in exchange for that point or two. If there is some valid economic impact, than you’ve just added a couple points to your margin by giving the customer a reason to buy it from you.

There is no one simple strategy. Increasing your margins is a matter of a methodical, disciplined approach applied over time. Consistently use the tactics discussed above, and you’ll see your margins gradually grow.

by Dave Kahle
On first glance, this looks like a bit unrelated to the day-to-day challenges of an effective sales person. What has this to do with your interactions with your customers?

Consider the issue of “sales time.” Sales time is the time that you actually spend interacting with your customers either on the phone or in person. It is the heart of your job and the ultimate reason your company employs you. Investing your sales time effectively is the way that you achieve better results and earn your money.

Because of the demands for administration, reporting, preparing, travel, etc., the typical field sales person only spends about 25 percent of his/her work week in “sales time.” In our challenging economy, the demands on our time by the press of “other stuff” can be overwhelming.

We need to be constantly battling the allure of “other stuff” so that we are investing sufficiently in selling time. All things being equal, the more time you actually spend with your customers, the more successful you will be.

So that leads us to this question: What constitutes the biggest proportion of other stuff? What has the potential to overwhelm us, to rob us of our sales time by tempting us to invest our energies in something not nearly as effective?

The answer? Information. We are inundated with information. Consider the amount of selling literature, technical bulletins, computer reports, web pages, emails, voice mails, and memos from the boss that we have to deal with every day. All these are types of information. If we gave in to the temptation of dealing with all the information that comes our way, we could easily spend 8 – 15 hours a week doing nothing but that.

And that would not be a good idea. It would detract from our ability to create sales time, and immediately and negatively impact our performance.

That leads us to this best practice. The best performers don’t waste a lot of time dealing with useless information. They stay focused on the heart of the job – sales time – understanding that without quality time with their customers nothing else matters.

So, they create disciplines and strategies that enable them to deal with all the forms of information quickly and expediently. The run-of-the-mill sales people waste inordinate amounts of time processing information.

To learn more about this best practice:

• review chapters four and five of How to Excel at Distributor Sales
• review chapter eight of Ten Secrets of Time Management for Salespeople
• review chapter ten of Insights & Answers for Distributor Salespeople
• read the article on my website entitled “Managing Information.”
• purchase Best of Dave’s one hour seminar #43 “Get Organized! Managing Information before it Manages You.”

by Dave Kahle

One of my clients recently mentioned to me that, when hiring prospective sales people, he looks for a “passion for sales” in their personality. The idea struck me. I had never really thought in those terms before. What is a ‘passion for sales?’ What does it look like? Is it really an indicator of a successful sales person? And, how do you identify it?

Perhaps the reason it struck me is that for 20 years I have been working with sales people who, for the most part, never really started out wanting to be sales people. I think that is true of the overwhelming mass of sales people. They really didn’t get there by following a well defined, intentional career path. Most sales people sort of slid into sales as a result of being “nice” people, and showing some skills or knowledge which their bosses considered helpful for sales. They found the increase in income and the freedom to organize their day as they saw fit to be attractive aspects of the job. The next thing you know, they were a sales person.

But, a “passion for sales?” Rarely, in my experience. Here’s a test to see if you, or your sales people if you are a sales leader, have a passion for sales

Do you (or they) invest in their own development as a sales person? I am convinced that only one out of 20 sales people has actually spent $25.00 of his own money on his own improvement in the last 12 months. I believe that is an indication of a person’s interest in the profession of sales.

Here’s an example. I am a mediocre golfer. But I really like it. Since I have a “passion for golf,” I invest in my golfing ability. I subscribe to the magazines; I buy a golf book every now and then; I follow a couple of golf websites; and I take lessons every couple of years. I go to the driving range and practice almost every week in the summer. This year, I did a bit of a study on which golf ball I should be using, and made an informed decision. While I readily admit that I am not a good golfer, at the same time I will absolutely assert that I am getting better, always better. If I live long enough, I will become an excellent golfer.

There is nothing unique in that. What’s true for me and my passion for golf is true for everyone and their passions. It is certainly true of sales people. If they have a passion for the profession, they will invest their own time and money in it. They’ll subscribe to the magazines and Ezines, they’ll buy the books, go to the seminars, network with other good sales people, and practice as much as they can. Their money and time will follow their passion.

Is it an indicator of sales success? I think so. It may be the ultimate indicator of eventual sales success. Just like me and golf. Eventually, I am going to be a good golfer. My passion for it will lead me to learn, and eventually I will figure it out. So, too, for sales people. Given a modicum of talent, their motivation will drive them to learn, and eventually they will absorb enough of the principles and practices of effective professional sales, they will incorporate them into their routines, and they will be successful.

How do you identify it? Pre-hire aptitude assessments can uncover it. I remember taking a battery of psychological tests as part of the hiring process for one of my employers. The report that resulted pegged me as having “a singular intense attraction for persuasive activities.” In other words, a passion for sales. The pre-hire assessments that we sell provide a measurement of a candidate’s sales inclinations.

But, probably the best way is to examine their investments in themselves. Have they invested in their own growth as sales people? A number of years ago, I discovered that my alma mater, the University of Toledo, had a world-class sales school in the college of business. Young people actually take a major in “sales” and learn to sell in college. For a number of years, I have been donating a day a year, speaking to the classes of this number one rated sales school. How encouraging! An academic institution devoted to developing young people who have a passion for sales.
But few are fortunate enough to have been educated in the sales profession in college. That doesn’t stop those with the passion. The ultimate question is, “Have they invested in themselves?” Have they bought the books, attended the seminars, read the newsletters, etc.? If they have, you can be pretty sure they are passionate about the profession. If they haven’t, the opposite is true.

As an experienced sales trainer who has educated tens of thousands of sales people and their leaders, I can tell you that my job is so much easier when I have a room full of committed, passionate sales people. And so much more difficult when they really don’t care.

As for me and my company, I’ll take a passionate sales person every day of the week.

Q. I worked on a large bid for a company with which I had relationships in the past. I knew that we could do a great job for them but I also knew the buyer in charge of the project worked from fear and comfort and it would be a big change for him to turn over about 600K of business to us. I asked up front if we were to put something “special” together for him would we be given an opportunity or just used as a negotiating piece for the current vendor (my old company). I did not get a straight answer, and proceeded to put together an A+ presentation. We found out our program showed an immediate 15-18% reduction in cost. All of our information was given back to the current vendor and they eventually matched our proposal.

My question is: I am considering going over the local and national buyers head laying out the facts to a VP or CEO, not in spite, but to say if we did this on this opportunity what else could we uncover that may be being missed. Also should I have refused to move forward with the bid unless I received some kind of commitment guaranteeing me the business if I were to meet some specified requirement?

by Dave Kahle

A. This is one of the most difficult issues a B2B sales person faces. It represents one of the true “lows” of field sales. We often talk about the “highs” of gaining a big deal, but rarely the “lows” that come with being used and abused. Unfortunately, almost every sales person has one of these kinds of stories to tell. I can still remember a very similar situation in my experience. It was a several million dollar piece of business, involving a buying group, and I was left in the same situation you are in – a lot of work done to create a great proposal, and someone else, who had invested nothing, got the business on the basis of broken promises and a few cents difference. I was used and abused, and to this day, I have bad feelings about it.
Just as an aside, if you were the competitive sales person, you would be bragging about your relationship, and how you got the “last look” and the ability to meet some competitor’s best efforts. I’ve always had a bit of distaste for that approach, even though a number of sales people consider it desirable.

I’m not sure I have the 100% fool-proof solution to this, but I do have some thoughts to share.

First, let me respond to your specific question: Should you go over the buyer’s head to a VP or CEO? 

I don’t think so. No matter how careful you are, you are going to look like you are bitter and tattling on the buyer. You won’t look good, and that will come back to bite you some time in the future. 

Now, let’s try to learn from this. I see two questions:

1. What to do in this account? 
2. How to prevent this from happening again?

1. What to do in this account? 
If you can pull it off, you may want to find a way to share your view of things with the buyer. Does he even know that he did something that most people consider is immoral? He may think nothing of it. If you can have that conversation with him, it may make him feel a bit obligated to you in the future.

Chances are, though, that is not a conversation you will be able to have with this buyer. I honestly think, if it were me, I’d pull back and wait for a change in buyers before I put any significant investment of time or energy into the account. 

Those of you who have been through my system of rating accounts by potential will recognize that this account is low in “partnerability.” Hopefully, there are more responsive fish to fry elsewhere.

2. How to prevent this from happening again?
I’m going to share some thinking with you that you will probably have never heard before. You don’t want to have this happen to you again. To prevent this in the future, think about “risk.” 

“Risk,” in this particular case, is the fear in the mind of the customer of what might happen to him if he makes a mistake in awarding the business to someone he doesn’t know well.

One of the core reasons why you didn’t get the business is that, in the customer’s point of view, you represented a greater risk than their current vendor. (By the way, “risk” is one of the biggest issues in the buying/selling interaction. Check out my article on it, and consider one of my one hour seminars on it.)

This deal sounds like a big one, relatively speaking. The mistake that you may have made is to pursue a “big deal” in an account where you were viewed as the higher risk choice. This rarely ends up well, and more times than not, produces a result similar to the one you experienced. The other company, because of their past relationship, is always seen as lower risk than you. Since the customer is fearful of the risk, he’s going to find a way to do business with the lower risk choice.

Strategically, the way you make your option look like less risk is to do small pieces of business first, so that you establish some history of performance. Then, when the big deal comes up, you are operating from a “less risk” perspective. Alternatively, if you could have broken the $600K deal up into four or five smaller pieces, that could be executed and implemented sequentially, one-at-a-time, you would have had a better chance. Smaller deals are less risk.

I would generally NOT put much time and effort into pursuing “big deals” with accounts that had little previous experience with my company. I know they are tempting, but they almost always turn out like your experience — a waste of your time and energy. You get used and abused.

So, pick your battles carefully. Don’t put a lot of time and effort into “big deals” unless you have a history with the account, and are seen as a “low risk” provider. Your time and effort are valuable commodities. Don’t waste them on opportunities and customers that aren’t worth it.

Hope this helps.