Kahle Way B2B Sales Blog

by Dave Kahle

“Mañana.” It will wait until tomorrow. There are times when it is so tempting to tell yourself that, and actually believe it. Clearly, sometimes it is true. However, when we continually put off for tomorrow those things that could and should be done today, we become less effective today. And while it is true that it is only one day, the truth is that we will never have that day back again.

If we accept mediocrity in our performance for one day, we will never be able to gain that time back, and live that day over. And a day wasted can easily become another day, and another, and eventually turn into a habit. Habits turn into character traits, and character eventually determines our performance.

Procrastination, the character trait of putting far too many things off to be done later, is one of the insidious cripplers of sales performance, lurking under the surface of sales performance, and sucking the energy out of a salesperson’s performance.

The best salespeople guard against procrastination. They work hard, with discipline, to insure that every day is spent as effectively as possible. They recognize the temptation, and build tools, practices and disciplines into their routines to prevent themselves from falling prey to it.

There are proven tools and techniques to help with this. Scheduling appointments as fully as possible throughout the course of the day keeps you working. If you have an appointment for this afternoon, it’s difficult to put that off until tomorrow. The best salespeople are in the habit of making appointments for at least the first call of the day, as early as they can, and the last call of the day, toward the end of the day. That way, the temptation to put something off until tomorrow conflicts with the need to stay mentally in the job until you are finally finished.

“To-do lists,” re-organized at the end of every day, with firm priorities and deadlines, is another effective tool utilized by the “do-it-now” group. By creating a prioritized list of the things that you must do, and assigning deadlines to each of them, you force yourself to confront the necessity to get things done.

And, of course, the regular discipline of developing realistic goals and attaching clearly envisioned rewards to them is one of the most common devices used by the pros to keep themselves in the moment and on top of their games.

The best salespeople understand that they need to manage their weaknesses. They understand that their ability to manage themselves is one of the keys to sustained sales excellence. That’s why they excel at overcoming procrastination.

If you’d like to learn more about this best practice,

• Read Chapter 12 of How to Excel at Distributor Sales 
• Read Take Your Sales Performance Up-a-Notch 
• Listen to the Best Of Dave Kahle Recorded Seminars #52. 

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For Sales Managers…
Use this rating scale to assess the extent to which each of your salespeople evidence this best practice. 

Comments: ____________________________________________________________

To help a salesperson build this practice into a habit,

a.  Share your assessment with them.
b.  Talk about how that impacts their performance.
c.  Refer them to one or more of the resources listed above.
d.  Ask them to commit to a couple of specific changes.
e.  Monitor their progress at a future, pre-determined date.

by Dave Kahle
Whenever I ask sales people to rate themselves on their competence at all the different parts of the sales process, they invariably rate themselves low at closing the sale. Unfortunately, sales people who don’t close consistently waste a lot of their time, waste their customer’s time, and are not nearly as effective as they could be.

Being adept at closing the sale, and every step in the process, is an important key to productivity. So, let’s examine the issue of closing, beginning with the first principle: Closing is a process which always ends with your customer’s agreement to take action.

As you consider this principle, you’ll realize that closing is not just asking for an order, although it certainly is that. In addition, it is a process you repeat at every stage of the sales process. In fact, almost every time you interact with a customer, you can close the interaction by asking for some agreement. Whenever your customer agrees to take some action, you have closed that step in the sales process.

Let’s illustrate this principle with a typical real life situation. Suppose you’re talking on the phone to a prospect, and he says, “Sounds interesting. Send me some literature.” You say, “OK, I’ll put it in the mail today.” Have you closed that step of the process?

The answer is no. You have agreed to take action — send some literature — but your prospect hasn’t agreed to do anything. Remember, a close always ends with your customer agreeing to take some action.

Can you turn the same situation into a close? Back to the same situation. Your prospect says, “Sounds interesting. Send me some literature.” You remark, “I’d be happy to. After you review it, will you discuss it with me over the phone, say next Friday?” If your customer says, “Yes,” you’ve closed. He’s agreed to take some action.

Just last week I made a sales call with a sales person, who left the call unclosed. The prospect was definitely interested, but the sales person never asked for any action. Instead, the sales person said, “I’ll check back with you in a couple of weeks.” We walked out of the sales call with absolutely no resolution of the issue, and the chance of making the sale significantly diminished.

Understanding this principle is crucial to closing the sale. Many of the offers and proposals on which you work are very involved, requiring a number of steps in the sales process. As you proceed through the sales process, you continually ask for some kind of action in order to keep the project moving forward. When it comes time for the final decision – the agreement to buy — that decision is often the natural, logical consequence of the decisions that led up to it.

Closing, then, is not an isolated event that only happens at the end of the sales process. Rather, it’s a routine part of every sales call. That leads us to the second powerful principle of closing the sale: Every interaction can and should be closed. In other words, at the conclusion of every interaction with your customer, ask for an agreement on the action he or she will take.

The telephone conversation described above is a good example of closing the interaction. Here’s another common situation. Let’s say you’ve discussed a product or proposal with your customer. He says, “It looks interesting, but we’re not ready for that now.” You might then say, “When do you think will be a good time?” Your customer responds, “Probably around June.” You might typically say, “OK, I’ll make a note to discuss it with you then.” At this point, you haven’t closed the interaction, nor have you resolved the issue.

Let’s take the conversation one more step further. Suppose you now say, “At that point in time, will you spend a half hour with me to discuss it in detail?” You have now attempted to close the interaction by getting an agreement for action on the part of your customer. You’ve put the issue on the table, and are attempting to resolve it.

Let’s take the conversation one step further. Suppose your customer says, “No, probably not.” You now have a decision to make. Should you probe the reasons why, or should you accept his decision? Let’s say you decide to accept his decision. The conversation has value to you in that you learned that this proposal isn’t going to fly in this account. The early “no” was valuable to you. You didn’t waste months chasing something that wasn’t going to happen. That’s the value in resolving the issue.

Let’s now say that your prospect, instead of responding “no,” responds to your close by saying, “Yeah, I think it has enough merit to spend that time discussing it with you.” You now have his commitment to spend some time with you, so you have moved the issue forward. You’re one step closer to the ultimate sale.

Implement these two principles and you’ll dramatically improve your productivity. Keep in mind that closing is an agreement for action on the part of your customer, and make it your goal to close every interaction.

A. By Dave Kahle
These certainly are challenging times. I’ve been through enough of these to have learned some things. Even though I never liked going through difficult times, and would not wish them on anyone, I can honestly say that I always came out of them stronger, more confident, with more capabilities and more security than ever. You can, too.

Here are a few things that I have learned along the way…

I know this is easier said than done, but don’t worry about things you cannot control. You cannot single-handedly change the economic climate, nor can you single-handedly control your company’s response to this slow economy. The time, effort and emotional energy you expend fretting over what might happen is wasted. The economy is going to do what it is going to do regardless of your efforts. So, don’t waste time worrying about it.

Instead, concentrate on what you can do, on the things that you can control. You can control your attitude, and you can control your behavior. 

Work on keeping your attitude positive. A positive attitude for a sales person is more than just a warm and fuzzy thing. It has very real, practical value. When you have a positive attitude, you look for opportunities and good things to happen. Since you are expecting them and looking for them, you see them. If your attitude is negative and pessimistic, you don’t expect opportunities to present themselves. Since you don’t expect them, you don’t see them when they develop. As a result, you pass over opportunities, and your negative attitude becomes a self-fulfilling prophecy.

Expose your self to positive thoughts. Buy a bunch of my podcasts, for example, and listen to them over and over. Get a good sales book to read, and try to implement some of the ideas. My new Question Your Way to Sales Success book would be a great place to start.

In addition to attending to your attitude, you can control your behavior. Focus on doing your job more effectively. Make sure you are digging deeper in your good accounts and finding additional opportunities to expand the business. In the profession of sales, you are never as good as you can be. So, work on becoming better.

Now is also the time to be very sensitive to what your competitors are doing. They may be cutting back on their service or reducing their workforce, and those actions may open up opportunities for you. Discipline yourself to make a certain number of cold calls on prospect accounts each week. There is nothing like new people, new situations, and new opportunities to energize you. 

Pay attention to your personal financial situation. Now is not the time to make big purchases on your credit card. Now is also not the time to sign contracts, enter into long term leases, etc. All of those turn into monthly obligations, and in times of uncertainty, monthly obligations multiply your stress and reduce your options.

Here’s one more that may surprise you.

Exercise. Put yourself on a disciplined exercise program. Exercise is one of only a handful of practices that have been proven to reduce stress for sales people. You’ll feel better, have more energy and less stress, think clearer and be more emotionally stable if you exercise regularly.

It really is the difficult times that shape your character and defined your success. Anyone can do well when the market is growing all around you. It takes a true professional to survive and thrive in a time of adversity. 

By Dave Kahle
The job of the salesperson is always a bit of a balancing act. On one hand, we continually cruise our territory to see what opportunities look the most promising. We’re constantly scanning the account base to identify that to which we should react. On the other hand, we also need to be proactive, determining which accounts hold the most long-term potential, and strategizing our approaches to those accounts.

It’s the second part of that equation that is the subject of this piece. The best salespeople regularly (annually, quarterly and monthly) think deeply about their highest potential accounts, and create a step-by-step plan for methodically penetrating them. That’s the definition of a strategic plan.

Note that the practice assumes some prior work: The salesperson has methodically identified the highest potential accounts. That’s a special process all by itself. In order to do that, he/she has collected meaningful information, analyzed it, and applied some thoughtful criteria to it in order to bubble up to the surface those accounts which offer the highest potential.

Those top 5 to 20 percent have so much potential that they warrant special attention. And that special attention means a well crafted, constantly reviewed strategic plan.
Typically, these plans involve:

• A clear understanding of the opportunities within the account.
• A specific plan for expanding and broadening relationships with key people within the account.
• A set of short term, as well as long term, objectives for penetration of the account.
• A specific, step-by-step sequence of actions to follow in order achieve those objectives.
• Benchmark measurements to which to compare your results.
• A written commitment.

The best salespeople spend time annually reviewing and refining their list of key accounts. They then spend time either quarterly or monthly defining, in writing, their strategic plans for those accounts. The resulting document helps them to effectively focus their investment of sales time in those actions which will get the best results.

It’s a matter of “thinking about it before you do it,” one of my ten secrets of time management for salespeople. And that means devoting the necessary time to the task, acquiring the important disciplines, and asking the right questions.

Alas, so few salespeople do that. That, of course, is why this is one of the best practices of the best salespeople.

To learn more about this practice,

• Buy the 10 Secrets of Time Management for Salespeople book and tool kit. Review Chapter 2. 
• Review Chapter 15 of How to Excel at Distributor Sales. 
• Review Chapter 4 of Take Your Performance Up a Notch 

*Read the free article “Strategic Planning for Salespeople” on the
www.davekahle.com website.

A. by Dave Kahle
You really have two choices. The first, which, unfortunately, is the solution to which most companies and sales people currently subscribe is this: Do nothing differently, complain a lot and hope that things change. Maybe the government will fix everything.

The second, which is my recommendation, is this: Move outside of your comfort zones, become a whole lot more strategic, thoughtful and better at what you do, and do some things differently.

Begin by analyzing your market to identify where your opportunity lies. Unless you have 80 – 90 percent of the total market in your area, you have opportunity.

Typically, you’ll find that there is market opportunity within your current customers, as well as opportunity in prospects who do not currently buy from you. Collect information about both groups so that you can make good decisions about where your time is best invested. Then, prioritize those prospects and customers based on their potential. Visit www.salestimemanagement.com for lots of resources to help you do this.

Then, strategically develop plans to gain more market share from each of these two sources. 

Proactively create the agenda for the conversations between you and your customers. For example, if one of your customers is buying half of their purchases from you and half from someone else, identify specifically what they are buying from your competition, and develop plans to gain that business. Ask yourself, “What would it take for them to buy it from me?”

Don’t settle for the simple answer “lower price.” Think more deeply, uncover deeper motivations in the customer and answer that question, product by product, category by category, for everything they are buying from someone else. Here’s a great question to ask, “What has to change for us to do more business here?”

Listen to their answer, and respond appropriately. Put together specific, persuasive offers to each customer and methodically present them to each customer. Show them, specifically, why they should do more business with you.
You are not done yet. Understand the fundamental sales equation: Relationships = opportunities = projects = money. In other words, the quantity and quality of your relationships equals the quantity and quality of your opportunities, and those opportunities develop into projects (purchasing cycles) and those projects turn into sales. 

If you want to sell more, you must develop more and bigger projects, which develop from more and bigger opportunities, which emerge from more and higher quality relationships.

If your sales are down, either you aren’t very competent, (in other words, you are not very good at turning relationships into money) or you need to increase the quantity and quality of your relationships.

Work on two parallel paths: If all the key decision makers and influencers in your current accounts don’t know you, then work hard to create those relationships. At the same time, look outside your group of current customers, and create relationships with prospects. In other words, work diligently, methodically and systematically at creating new relationships and thereby, new customers.

I realize that for a percentage of sales people, this sounds pretty basic. If that’s the case with you, there is power in refocusing your efforts on these fundamentals and work at doing each of them better. For you, the issue isn’t doing things differently, it is doing them better.

There is another group of sales people for whom all of this sounds too different and too far outside of your comfort zones and skill set. This is not how you are accustomed to doing your job. Remember where we started, “Move outside of your comfort zones, become a whole lot more strategic, thoughtful and better at what you do, and do some things differently.” If this is new and uncomfortable for you, then the next year or so will be one of the most challenging of your life. You’ll need to diligently work at developing these practices.

You may want to look at my coachinar series as a way to get help.

The world is full of people who will tell you that success in this environment is a matter of “secrets” or simplistic solutions. I wish that were the case. Unfortunately, sales success is the result of years of hard work, constant improvement, and thoughtful and diligent efforts. If you are serious about wanting to change your circumstances, you’ll need to begin to change yourself.

Positive customer relationships are the basis of much B2B business, right? Positive business relationships ensure us an audience with the customer, make every step of the selling process go easier, and even provide us with a competitive edge. It’s not unusual for the business to come your way just because they like you the best.

But in today’s hyper-competitive economy, relying on your relationships is like trying to paddle through the storm in a leaky row boat – your effort will keep you afloat for a short time, but eventually you’ll find that you just don’t have enough resources to challenge the storm. Relying on your relationships is a prescription for eventual failure.

Here’s why. The world is full of, literally overrun with, business to business sales people who have built a solid business relationship with a segment of their customer base. They then rely on those relationships to support them. 

In doing that, they have missed the opportunity to develop their sales skills. “I have great relationships with my customers,” they think. “I don’t need to learn to sell well.” And, for years, that was somewhat true. 
Now, however, they are paying the price of that position. Many of their customers are seeing their businesses decline. The relationships that so many sales people counted on to support them are no longer as profitable as they once were. And, since they never spent the time and effort to improve themselves, they find themselves woefully unequipped to gain new customers, to create demand for their new products, or to persuasively gain bigger chunks of their customer’s business. Their boat is sinking, and they never gained the skills necessary to keep it afloat. The vast majority of B2B sales people have never been trained in the principles, practices and processes that are the best way to do their jobs.

Not only are they paying the price of never developing their sales competencies, they now find themselves restricted by those very relationships that were, just a few years ago, their meal tickets.

Here’s how this works. A sales person develops a set of relationships, and then settles into a routine of seeing those people on a regular basis. Those customers come to rely on him, and their purchasing patterns revolve around those regular visits. As long as they order in a sufficient quantity, life is good.

But now, those same customers aren’t filling the coffers like they used to. And the sales people find themselves boxed in. They have created expectations in their customers, and those expectations now prevent them from investing time in developing more lucrative relationships. How can they call on someone else, when doing so would mean that they can’t see their buddies as often? That would jeopardize their current relationships. And, besides, they just aren’t comfortable cold calling on prospects because they haven’t done that in years.

So, their reliance on relationships has caused them to neglect the development of their own competency, and built the walls around their comfort zones so high as to be almost insurmountable. Faced with the demands of the new economy, they find themselves woefully under equipped as sales people, and fearful of striking out of their comfort zones. Unsure what to do as they see their boat steadily sinking, they default to bailing even faster, and hope the storm goes away.

What to do – if your are a sales person in this position

Recognize that your relationships are just as likely to be an obstacle as they are an asset. The solution is for you to change. Get some education in how to excel at B2B sales. (Check my website, www.davekahle.com for lots of resources) Start working, right now, to improve your sales competencies. There are better ways to make an appointment, manage a first call, create a customer, expand the business, sell a new product, etc. Take on the mind-set that you will need to forever improve in these basic sales competencies, and start the never-ending process of improving your sales proficiency right now. Look at it as a never ending process, not an event, and start the process as soon as possible.

Then, do a cold-blooded analysis of the profitability and potential of your current relationships, and identify those who are dragging down your productivity. You’ll have to say “No” to some low-potential accounts before you have the time to invest more strategically in higher potential accounts. 
Create two lists: One list of high-potential accounts in which you want to invest more selling time, and the other list of low-potential relationships that are currently slowing down your progress. (See 10 Secrets of Time Management for Sales People for details on how to do this.)

Now, methodically work at those two lists, gradually finding a way to excuse yourself from those low-volume accounts that drain your energy and time, and invest more heavily in those higher-potential accounts.

It won’t be easy, and it won’t be quick. But, it will help you keep your boat afloat while you gain the potential to take more control of your destiny.

What to do – if you are sales manager, and recognize the plight of some of your sales people

The formula is very similar for you. However, instead of just expecting your sales people to change their behavior on their own, you need to be actively involved in the process.
Identify those sales people who are at risk of allowing their relationships to lead to their ruin. Have a heart-to-heart talk with them, and lay out a plan for their metamorphosis. Don’t be afraid to describe specific bench marks and deadlines.

Then, help your sales people get an education in the best practices of their profession. Remember, it is not an event, it is the beginning of a never-ending process (check our Kahle Way® B2B Selling System)

At the same time, work with each sales person to help him rate the potential of each account, regardless of the existing relationship, and to prioritize his time to focus more time on the high potential accounts, and less on those that drain his time and energy. 

Realize that you are embarking on a journey to help that sales person change his/her behavior, and that change doesn’t’t happen overnight. You should, however, see steady progress.

If you don’t see progress, then you may want to consider the long-term future of this sales person, and how it impacts the company’s ability to survive and prosper. ###

A. Believe me, I can empathize with you. I had my share of whiners in my days as a sales manager. I’m thinking of one sales person in particular who complained constantly. I hated to take his calls. I even have vague recollections of hanging up on him in the middle of one of his rants.

I’m going to tell you something you don’t want to hear. It is more your problem than it is his/hers.

Before you turn off completely, let me explain. The most pertinent issue for you is that person’s sales performance. If their performance is sub-par, that’s one thing. If their performance is acceptable — their numbers are good, their relationships with their customers are positive, they generally follow your directions and do what you ask them to do – then view their whining and complaining as just so much fluff. The problem isn’t their complaining – the problem is the impact their complaining has on you!

When he complains and whines, you become upset, you become irritated, and you become exasperated. Notice any pattern here?

There are two ways to solve this problem: Either he/she can stop complaining, or you can stop reacting to it in the way that you have.

I’m assuming you have had a conversation with this person about their whining and complaining. If not, please do so. He/she may not even be aware of it.

If you’ve had the conversation, and the behavior still continues, and the person is in other ways profitable and effective, then you must change your reaction. Decide to not let the negative comments get to you. That will go along way to making this person more palatable to you.

If you are still having trouble, then I’d suggest you do a little research and find a book or two that provides you with specific techniques to deal with the emotions this person generates in you. There are a lot of resources out there.

But what if their performance is sub-par? Again, the whining and complaining may be this person’s outlet for a deeper seated understanding that their performance is not up to expectations and that maybe they don’t have what it takes to succeed in this situation.

Regardless, the whining isn’t the issue – the performance is. Focus on their performance, and put in place a specific set of expectations with quantifiable measurements and deadlines for improvement. If they don’t make acceptable progress, then it’s time to look for a new sales person.

Readers, feel free to comment on this.

The best salespeople earn that designation because they write more business than the mass of salespeople. They get the order!

One of the practices that contributes to that success is that of “closing the sale”. Unfortunately, there is no one issue that is more misunderstood and incompetently trained than that of “closing the sale.” Much of the sales training on the subject, as well as the vast preponderance of sales literature, is way off the mark.

Closing is not a matter of continually pressing for the business, nor using manipulative techniques, nor clever repartee, nor memorizing any “magic” closes.

Just today I said “no” to someone who kept pressing me for the order. I interpreted his pressure as desperation on his part, and his desperation meant that there was something not right about the deal. I said “no.” In this case, the highly trained, very skilled salesperson, with the right product at the right price, did exactly the wrong thing, and brought about a negative result — solely on the basis of his poor judgment about the customer, and his repeated attempts to close the sale.

While there isn’t enough space in this article to fully explore the issue of closing, I have some general observations.

When it comes to closing, the best salespeople do two things. In the traditional sense, they ask for the order when they sense that the customer is close to committing to a decision. This has always been the classic definition of closing the sale.

But in the hands of a master, closing takes on a larger meaning. Sales masters also understand that “closing” is more than an event that gets tagged onto the tail end of the sales process. They understand that “closing” is the process of attaining an agreement with the customer on the action that the customer will take as a result of every interaction. They have the mindset that every sales call – whether 45 seconds on the phone, or 90 minutes in the customer’s office – always should end with some agreement on the next step.

The process of closing, then, starts with the first “Hello” and continues through every interaction that the salesperson has with the customer.

So, confirming an appointment is a mode of closing. As is gaining a commitment to view a presentation, test a sample, research other users, etc. The best salespeople continually seek, and obtain, commitment from the customer to take action at every step along the way.

As a result, the final decision to buy the product or service is a natural, logical result of all the commitments (closes) that went before.

The best salespeople are continually and effectively closing every conversation with the customer. That’s why this is a best practice of the best salespeople.

To study this best practice, take advantage of these resources:
How to Excel at Distributor Sales, chapter eleven
Take Your Sales Performance Up-A-Notch, chapter thirteen
“Best of Dave Kahle’s Phone seminars” numbers 45, 46, & 51
“Up-A-Notch” video training kits, Module number four.

By Dave Kahle
Copyright MMIX

Excerpted from Take Your Sales Performance Up a Notch, by Dave Kahle

As sales people, we love to complain about the competition. Unfortunately, complaining doesn’t do us any good. A better approach is to create a system to learn about the competition. Knowledge of the competition — not only their strengths and weaknesses but also their patterns and tendencies – will provide you with a distinct advantage, and prevent you from getting blindsided or seriously outmaneuvered.

That happened to me. To this day, I still get a sick feeling in my stomach as I remember the day when I lost my largest account to my arch competitor. It was an account that made up 20% of my total volume. In my blissful ignorance, I was content to grow my business by calling on the end users and purchasing department, while my competition was successfully building a relationship with the administration. The result? My best account signed a prime vendor, sole-source agreement with my competitor, and within 60 days, I was almost totally out of that account. I was blindsided.

That’s a lesson that sticks with me, and one from which you can learn. To become good at knowing what your competition is up to, implement this simple three-step process:

Step One. Collect bits and pieces of information

Begin by consciously collecting little bits and pieces of information at every opportunity. For example, you may have lost a bid or a particular piece of business to your competitors. Rather than just moping about it, use it as a learning opportunity. Try to find out from your customer why they awarded the business the way they did. If it was price alone, try to find out how much lower their price was than your price. If it’s something else, find out what. That information won’t help for that particular piece of business, but it may give you an insight into the pricing policies of your competition. Write the information down on a 3 x 5 card, a piece of scrap paper or a post-it.

Take your good customers to lunch, and casually see if you can steer the conversation in such a way as to learn something about your competition.

Keep your eyes open to the coming and going of competitive salesmen. Note when you see them, and in what account.

Be sensitive and aware of competitive literature, business cards and price quotes lying around. And don’t forget to talk with the other sales people who work for your company to get their insights.

All these are ways to collect bits and pieces of information. By themselves, they won’t help much. But, if you combine these bits and pieces, you may very well see trends, uncover strategies, and discover tactics your competition is using.

Step Two. Store the information.

As you collect each bit of information, capture it by writing it down, and putting the note in a manila folder marked “competition.” Or, store it in an electronic file on your computer. You may even have a separate folder for each major competitor.

Regardless, what you’re doing is assembling a quantity of information. Diligently collect those bits and pieces of information, and file them away.

Step Three. Use the information.

After you have collected a quantity of these, you’ll be able to open that file on a regular basis, consider all the pieces of information, and discover a great deal about your competitors.

The trick is to consistently collect and store information. Eventually you’ll assemble an accurate picture. It’s like the popular game show "Wheel of Fortune." When Vanna White turns over one letter, it doesn’t give you much of a picture of the answer. But after she’s turned over several of these small individual pieces, the whole becomes clear and the answer to the riddle is simple to understand. That’s the way collecting information about your competition works.

The back of an old business card on which you noted that you saw a competitive sales person showing a new line of widgets, by itself, doesn’t mean much. But if you filed that along with all the bits and pieces of information you’ve collected, and then pulled it all out and analyzed it, you might see an entirely different situation. Suppose you reviewed that business card note, and combined it with the note you made to yourself that you saw some sales literature on the competitive widget line on the desk of one of your purchasing agents, and then saw that you lost a major bid to the competition because he quoted a new line at lower than traditional prices. All at once you’ve uncovered a potential threat to your business. Clearly, your competitor is pushing a new, lower priced widget line. You didn’t learn that from any one piece of information, but rather from the combination of all those pieces, considered as a whole.

The key to uncovering that information, to discovering what your competition is up to, is to consistently collect pieces of information, store them, and then analyze them as a whole from time to time.

In the Information Age economy, much of your ability to make good decisions depends on you being able to collect good information. If you are going to take your performance Up-a-Notch, you must see yourself as a dealer in information as well as a seller of stuff. An important initial step is to get good at collecting good information.

About the Author Dave Kahle has trained tens of thousands of B2B salespeople and sales managers to be more effective in the 21st Century economy. He’s authored seven books, and presented in 47 states and seven countries. Visit his website or sign up for his Ezine .

By Dave Kahle

"Low price, low price, low price." It’s the mantra that sales people in every industry segment are hearing more these days than ever before. Customers, looking for ways to contain costs, naturally pressure their vendors for lower costs.

But, is low price the motivating factor in a customer’s decision to buy?

In every survey of buying motivations I’ve ever read, low price is never the primary motivation. Yes, it’s important. And, when everything else is equal, it will be the deciding factor. But very rarely is everything else equal. And very few people in this world buy only on the basis of low price. How many of you are wearing a suit you bought at a garage sale? Or watching a 12-inch black & white TV?

If low price were the only motivator, you would have gone with those lower priced options. But, you don’t always buy on the basis of low price, so why should you think that all your customers do?

The truth is, they don’t. And here’s a secret that almost nobody knows, including all those gurus telling you to sell value. They don’t always buy the best value. But, they can invariably be counted on to buy the lowest risk!

The biggest issue in the minds of your customers and prospects is not price, and it is not value – it is risk.

What’s risk?

It is the potential cost to the individual customer if he/she makes a mistake. It’s not just the money, although that is part of it. It is also the social, psychological and emotional cost that your customer will pay if your choice isn’t the best one. The lower the risk of the decision, the more likely your customer will say yes to you – regardless of the price.

Let’s become comfortable with this concept of risk first, and then discuss how to use it in your sales efforts.

In order to really understand risk, you must first see this issue from your customers’ perspective. Try to put yourself in their shoes, and calculate the amount of risk that you expect your customers to take when you offer them an opportunity to say "yes" to you.

Here’s an illustration to help you understand this concept. Imagine that you are under orders by your spouse to pick up a package of disposable cups on the way home from work today because you’re having friends over for a casual evening of dessert and drinks tonight. You stop at the local grocery store, and make a selection between brand A and brand B. You pick brand A.

What happens to you in this instant in time? What is the consequence of your decision? I don’t know about you, but I would be the recipient of some negative emotion. My spouse would be upset with me. That may be the most painful cost of your decision. But there are other costs.

You’re going to have to fix the problem. If there’s time, you’ll have to run back to the store and replace the cups. So, in addition to the emotional cost, you must also pay in terms of extra time and additional money. All because of your bad decision. Those costs — negative emotions, time wasted, extra money spent – all combine to form the risk you accepted when you made your decision.

Here’s a simple exercise to help you understand this concept. Draw a short vertical line. At the top of the line, write the number 25. At the bottom, write the number zero. Now on a scale of 0 to 25, with 0 being low, and 25 high, where would you put the risk of buying a package of disposable cups? You’d probably say it is close to zero. So, put an X on the line from 0 to 25 where you think the risk of buying those cups would be.

Let’s look at an illustration at the other end of the scale. I once had an adoption agency as a client. When a young lady is in a crisis pregnancy, and she’s making a decision as to whether or not to release her unborn child for adoption, how big a risk is that for her? Put your X on the line that represents your assessment of that risk.

Most people put their mark around 25. The risk in this situation is a lifetime of consequences for at least four people – the mother, child and adoptive parents. That’s a very high risk. Compare the X’s for the two different decisions, and you’ll conclude that different decisions carry with them differing degrees of risk.

Now, let’s apply this concept to your customers. Remember that every time you ask your prospects to say yes to you, they are accepting some risk. And each of those decisions you ask of them carries with it a different degree of risk.

Imagine your typical customer. Then think of the typical offer or decision you ask of that person. For example, take one of your newer products. Imagine you are presenting it to your customer for the first time. Now, put yourself in his shoes, and see the situation through his eyes. On the 0 – 25 scale, how much risk does your customer accept when he says “yes” to you?

For an easy way of calculating it, just ask yourself what happens to that individual if you, or your company, or your product, doesn’t do what you promise?

If your customer buys that product and it doesn’t do what you claim it will, what trouble will that make for your customer? What consequences will he/she pay? What is the risk?

And don’t say that there is no risk because you’ll take care of any problem that might develop. You may think that, but your customer doesn’t know that. And remember, you’re trying to see this from your customer’s point of view, not yours. The amount of risk is what your customer perceives it to be.

I had a great example of the role of risk in sales several years ago. A young man approached me to help his company with their sales efforts. They were selling a product that was, at the time, a real state-of-the-art breakthrough. The company designed computerized controls that were retrofitted on food processing equipment. As a result of the use of these controls, the savings in energy consumption would pay for the cost of the equipment in less than a year.

It looked like a great product. But he couldn’t sell them as rapidly as the company wanted.

"Tell me how you go about selling them" I asked.

"We qualify our prospects to the point where we know we have someone who could use the equipment. Then I call the production engineer or the plant manager on the phone, and gather some information about the type of equipment they use. Then I create a written proposal showing the economic payback, and mail it to him. Next I call and try to close the sale."

"Let me see if I understand correctly," I said. "You’re calling a plant manager on the phone. I would guess that most plant managers are men in their 50’s, probably with advanced degrees, and who have been in the plant for a number of years, is that right?"

"That’s right."

"OK," I said. "So, you’re calling someone twice your age, asking him to spend $30,000 – $40,000 on equipment he’s never seen, from a company he’s never heard of, and from a sales person half his age who he’s never met. Is that right?"

My client became a little defensive. "If you put it that way, I suppose its right."

"Well put it that way," I replied, "because that’s the way he sees it."

The problem was simple – risk. On that scale of 0 – 25, how much risk would you think the plant manager would be accepting if he said “Yes” to the over-the-phone offer?

Put yourself in his shoes. Suppose the equipment didn’t work the way it was supposed to? He could shut down production lines, spend weeks trying to make things right, cause all sorts of havoc in the plant, and potentially even lose his job. Now that’s risk.

If you were that plant manager, how much more than the original $30,000 quote would you spend to reduce the risk? It wouldn’t be hard to justify a price double that.

That should give you a clue as to how to fight the “low price” issue. Worry less about low price, and more about lowering the risk.

Here are four strategies to do so.

1. Build solid, deep relationships with the key decision-makers. Relationships mitigate risk. The greater the relationship, the lower the perceived risk. That’s why the salesman with the longer relationship almost always has the benefit of the doubt in a competitive situation. It is not the price – it is the risk.

2. Make ample use of third party recommendations, customer lists, case studies and testimonials. All of these say to the customer that someone else, or lots of other people, have used the product or service. That means it is less risk for your customer to buy it.

3. Try to get your customer as physically involved with the product as possible. For example, if you’re selling a piece of equipment, try to get the customer to trial the equipment, or at least visit somewhere its being used. The more your customer can see and feel the actual thing, the less risk is it to them.

4. Finally, work with your company to create offers that reduce the risk. Trial periods, money-back guarantees, delayed billing, warranties, service desks – all of these reduce your customer’s perception of risk.

The winners in the competitive selling arena of our difficult economy are those who are the low risk providers, not the low price people.

About the Author Dave Kahle has trained tens of thousands of B2B salespeople and sales managers to be more effective in the 21st Century economy. He’s authored seven books, and presented in 47 states and seven countries. Visit his website or sign up for his Ezine .