Mandala Capital’s Sector Specialist, Hiten Varia, breaks down the Art and Science of Sales – in terms of business-to-business (B2B) transactions.
The purpose of this article is to share my views on what the key elements are for making the Sales process more scientific – first by demystifying the Sales process itself, then discussing which essential tools you need to get a more scientific process for improved Sales in your company.
Mandala Capital’s portfolio company, EFRAC, has successfully deployed the scientific process of Sales during the last couple of years, helping the Sales team increase their effectiveness. Therefore, the learning distilled in this article is to move the Sales function from the traditional process to a more scientific process (which is based on the practical experience that elevated EFRAC).
Sales – or the process of selling – is often perceived as a matter of building and managing relationships. Most Sales professionals treated the transaction as an art form, and the approach worked for many decades.
However, in recent years, intensive focus on making Sales a measurable process, combined with an improved consumer understanding (as a result of real-time availability of information about your company and its products), has led to a shift in perception. Increasingly, there is a realization that Sales is a process that necessarily blends both Art and Science, but to focus more on the latter.
The need for making the entire Sales process more predictable, timely, and outcome-based at every stage is leading to an increased application of a more scientific approach. The most successful companies are those with a well-trained Sales and Marketing team in today’s science-based principles. In fact, following these principles have become imperative for success in the current disruption-driven, fast changing, highly competitive business landscape.
Demystifying the Sales Process
There are myriads of issues with the traditional “relationship” approach to selling which can result in a lower success rate.
For instance, it can take a considerable amount of time to develop qualified leads. Even though leads are generated, your resulting pipeline may also be inadequate. On top of that, your team may be tempted to close an inappropriate deal simply because they are “easier”. These issues can actually be prevented by deploying the following (more-scientific) elements of an effective Sales process:
• Adopting and implementing a consistent Sales Methodology
• Better articulation of your differentiating Value Proposition
• Standardized methods for managing and reporting on pipeline activity
• Trained Support services
Using a more “scientific” process such as this can benefit your business in many ways like enhancing your chances for success, increasing the breadth and depth of customer engagement, finding it much easier to make internal support resources available, and ultimately achieving much stronger customer validation.
The core process of Sales engagement methodology involves three stages:
1. Market Analysis and demand generation to get an improved customer target list;
2. A rigorous Account Planning (or Prospect Planning) process to distil the opportunities; and,
3. Opportunity Planning to ensure faster realization of your desired outcomes.
1. Market Analysis
Market Analysis requires structured segmenting of the market(s) you are targeting based on measurable criteria. This also involves mapping the overview of the opportunities based on business size, growth, share, and profitability. This would be followed by an analysis of potential competition to get the leads. You’ll find that your lead-generation process will become very predictable if you take a systematic three-step approach of prospecting, nurturing and pipelining.
A robust prospecting process will help in opening new doors and leads. Lead nurturing will help in strengthening the rate of success. In the pipeline stage, one aims to close the deal with clearly defined terms and timelines.
2. Account Planning
Account planning involves gaining a deeper understanding of the issues involved with customers and finalizing the Value Proposition for that opportunity. One needs to define the power base of the organization to understand its decision makers, strategic influencers, and the account’s buying motion. Furthermore, one needs to identify the selling strategy, and develop a time-bound opportunity map with clear milestones.
Customer interaction during account planning should be focused on deeply understanding their problems. Every chance you get to obtain information needs to yield clear answers to key questions like:
• What are the major issues faced by the industry and the company?
• What resources are needed to resolve the issues in terms of people, product, processes, and performance?
• What will be the impact of bringing an effective solution to the issue?
• What’s the core Value Proposition?
• What’s the opportunity engagement plan?
• How can you show them the best way forward?
Account planning is the stage that involves careful thinking and deep insight. This stage is analogous to setting up a battle plan prior to execution. Failing to set this up accurately and precisely, will lead to multiple aborted and unsuccessful sales cycles.
3. Opportunity Planning
Opportunity Planning requires four deliberate actions. Firstly, identifying the individual selling steps to closing the deal will be on each of your opportunities. Secondly, developing a plan to create a sense of urgency for deploying the solution in the customer’s mind. Thirdly, comprehending the competitors faced and developing action points to counter them. Finally, closing the deal which involves confirmation on a mutually agreed-upon engagement plan, finalizing a contract including terms and rules of engagement, and building the utmost trust in your ability to deliver the solution.
Essential Tools of the Scientific Sales Process
The overall effectiveness of your Sales process will be significantly enhanced once you institute and use the appropriate Sales tools for making your process more scientific. This includes Value Proposition, Competitive Strategy, Engagement Plan, and Effective Negotiation. The appropriate use of such Sales tool requires continuous and intensive training for the Sales team as we have practised with EFRAC.
A great Value Proposition has specific, quantifiable benefits. It is uniquely differentiated from competing solutions. It also provides a rational and compelling reason, to ultimately lead the customer to purchase. The Value Proposition is built with the customer in mind by devoting time towards surfacing their implicit needs into explicit ones.
A customer will only buy a solution when the need for it is articulated or realised by himself. That’s why it is critically important to make the customer internalize the problem – the problem as you have presented to him – before he buys in to the solution. Lead him there by asking the right questions – striving to elicit useful responses by the implications of allowing his current problem to persist; and showing him the payoff from the solution which you are offering.
Critically, differentiating your Value Proposition from those of others competing for the business requires granular comparison across all competition on the various factors of the proposed solution.
Building your competitive positioning strategy is another tool to winning opportunities. The first principle of competitive positioning is by “getting there first.” If you cannot be there first (which can and will happen), refer to the following key questions in order to move the opportunity forward:
• Is the customer going to buy?
• How far along is this opportunity?
• Is our offering attractive to the customer?
• Can we win?
• Is it worth winning?
Some useful tactics that can be used for competitive positioning include:
Pre-emptive → Use this when you are “first.” Make the implicit problem explicit for the customer and work jointly with the customer to provide the solution while helping the customer realize the business impact of the solution.
Frontal → This is a head-to-head confrontation approach, and hence to be used only when one has very clear advantage over the competition.
Flanking → Flanking is the tactic used when one is behind the competition, and the approach involves changing the rules of the game.
Divide and Conquer → This is a fall back strategy to contain the competition. Your best approach involves making the deal subdivided to get a foothold to beat the competition.
Delay → This is also a fall back strategy when one is losing (to stall the competition).
Developing a solid Engagement Plan involves defining specific activities with clear responsibilities and timelines. A great Sales team wins when the leader effectively guides the customer throughout the buying process but allows his Sales team to be perceived as the facilitator. Showing such “bench depth” through a successful Engagement Plan results in order materialization, and increased life of the sales cycle (i.e., more follow-on business opportunities), because deeper trust has been attained.
Effective Negotiation is another critical tool for any great Sales process. Negotiation involves dialogue between two or more sets of people who are intending to reach a win-win situation. To improve your negotiating capabilities, keep these principles in mind:
• Ensure your negotiation is driven by value(s), and that all the opportunities for the customer are identified.
• Hold strong to both flexibility and reasonableness; do not let emotions get in the way.
• Establish trust between the negotiating parties and deepen it as you go along by being honest and forthright.
• Always be prepared. Solid preparation is paramount in all successful negotiations. That means setting the goals and objectives, being clear about what each side wants, and understanding both the implicit and explicit needs that are being discussed.
Beyond these principles, as we have learnt through our experience at EFRAC, it is also important to think through – in advance – about the various options that could come into play if the desired outcome is not reached. Be able to discern when it makes sense to walk away, when it makes sense to agree, and the possible relationship value that can be created through a little bit of give-and-take.
This article is a high-level overview of the essential elements to focus on for making your Sales process more “scientific.” Institutionalizing such behaviour benefits from the continuous deployment of the widely adopted PDCA (Plan. Do. Check. Act.) approach which processes improvement.
Fortunately, software programs like Salesforce enable the PDCA process natively, and are now widely adopted by large and small enterprises, so getting started is relatively easy.
To make all this happen, you just need to start, then continuously improve. For help getting started on applying the above principles to make your Sales process more scientific and effective, just remember the famous quote by Zig Ziglar:
“Outstanding people have one thing in common. That is, an absolute sense of mission!”
The process suggested above is applicable to many companies. At Mandala Capital, we are relentlessly focused on adding insightful support to improve the efficiency of various processes in our portfolio companies. We are happy to roll up our sleeves and support our portfolio companies.