Notes for Professional Selling - MKT 315
Book Notes: Selling the Wheel
Part I: The Wheel Revolution
Max, the inventor of the wheel in this story lives in the days of Pharaohs. He need to know how to sell it to the right people, so he visited the Oracle who told him to think about six questions:
- Who are your customers?
- Who are your competitors?
- Why do customers want what you are selling?
- What would make them prefer to buy from you?
- Why might they prefer to buy from your competitors?
- What added values does your salesperson have to offer to make a sale?
Max thinks to himself:
- Our customers are those who need to move big heavy stuff faster, easier, and cheaper.
- Our competitors are those with an established method of moving heavy loads, e.g. elephants, camel dealers, and sledge makers.
- Our customers want what we’re selling because they’re looking for the performance gain and the opportunity to do things that could not be done before that the wheel offers.
- Our customers want to buy from us because we are the only Wheel providers.
- People will prefer our competitors for their proven, affordable methods. Our technology will not be understood by others.
- What added values does our salesperson have to offer to make a sale? Max was stumped. After learning more in Part I, Max learns the added values their salesperson must offer to make a sale:
- The closer has to demonstrate the power and practicality of the technology.
- Build the vision of the Wheel’s potential for the customer.
- Provide the emotional energy to close the sale.
They hired different salespeople, but they were all poised to sell products in later stages of selling. Ben the Builder, a long-term customer relationship builder, and Toby the Wizard, a technology expert, failed to sell the wheel. After an unsuccessful attempt at launching a store, Max finally found Cassius the Closer.
Common Closer characteristics:
- Can complete a transaction with one or two contacts with the customer. Their transactions do not require an extended relationship with the customer.
- Often start their own companies.
- Have experience selling since their teen-age years
- Are highly motivated by a passion for what they are selling
- He doesn’t bother selling to subordinates; the Closer seeks out the key decision-maker.
- Are ethical but also highly manipulative.
- A closer’s sales presentations often have a dramatic flair.
- Has an eye for the “next wave”
- A strong track record of selling new concepts.
- Focuses on selling breakthrough products that do not require a lot of personal attention from the closer after the sale.
- Has an instinct for sales, knows how to qualify a prospect, make presentations, resolve objections, and closes the transaction.
- Looks successful and has a high-energy level.
- Uses personal assistants to manage the nitty-gritty.
- Develop salesmanship with the help of a mentor
- Liability: operates without feeling responsible for what happens to the customer after the sale.
The first buyers of a new technology or product are called Gate Swingers These are the prime market for closers. These customers: Are wealthy enough to buy the product
- Have the authority to make a risky decision
- Have the ego to want to be different from everyone else
- Are secure enough to think about the future
- Are sufficiently resourceful they do not require “handholding” from the closer before or after the sale.
The closer process for handling objections and doubts:
- Repeat back to make sure they understood
- Ask “And what else?” To have the prospect reveal the true nature of their reservations about the product.
- Guide the prospect to answer their own questions.
- Ask a closing question and then say nothing.
Part Two: The Wheel Advances
Cassius the Closer collected his commission on a million shekel deal, and left Max to deal with the details of an agreement with the new client: The Great Pyramid project. This project called for a different type of salesperson: Toby the Wizard.
A wizard is a professional expert – engineer, accountant, doctor, architect, etc. – who use their sophisticated technical expertise and knowledge to help customers make the right decisions. Compensation is often a salary, as opposed to the Closer’s commission-based income. Perks for advancement include stock options in the company.
The Nine Steps of Selling:
- Marketing Communications: Build an image that will induce the right kind of attention and make people interested in you.
- Generate Leads: Encourage contact with specific people who might become customers.
- Qualifying Prospects: Separate people unlikely to be interested or able to buy from those who have the means to buy from you.
- Sales Presentation: The pitch. This is where the salesperson tailors the capabilities offered to the specific needs and desires of the customer.
- Resolve Objections: The prospect hems and haws and tries to say “I’ll think about it.” The salesperson must remove these barriers to making the sale.
- Close the Sale: The act and art of persuading the customer to say “Yes”.
- Execution and Service: Manage the fulfillment of the terms of the sale in such a way the customer is satisfied, both now and later.
- Build Relationships: Personal contacts take place after the first sale between the customer and salesperson.
- Repeat Business: The reason for taking all the trouble to deliver great service and build relationships.
In a Wizard Seller Market, the answers to the six bedrock questions are:
- Our customers are new users who need expert assistance from the seller–often both before and after the sale, on an extended basis to deal with the complexities of technology and the purchase transaction. Specific customers include not only the financial decision-maker but also the managers and users who have influence over the sale.
- Our customers want what we are selling because they seek a performance gain, and the technology from a seller who delivers on their promise of results and personal attention to solve any problems associated with the performance of the product.
- People want to buy from us over our competitors because we offer the best solution and back it with the best support and service.
- People want to buy from our competitors over us because established competitors offer proven, low-tech solutions, while new competitors claim to offer superior results.
- The added values our salesperson has to offer to make a sale is a special blend of technical savvy so the wizard can provide an expert solution customized to the buyer’s individual needs, and the capacity to be a team player and manage a number of different relationships.
The best way to generate leads in a wizard market is to offer free information – via publicity, brochures, speaking engagements, and other means. A big part of the wizard’s job is to educate the customer.
Common characteristics of Sales Wizards:
- Team players and leaders that implement a complete solution.
- Work around the bureaucracy of the customer’s organization to get things done.
- Hold a strong sense of responsibility for the consequences of the sale.
- Possess an in-depth personal understanding of the technical issues involved in the sale.
- Professional, affluent, but not flashy in appearance or lifestyle.
- Fast learners who assimilate intricacies of the product and the complex requirements of each new customer.
- Document performance to prove the benefit of the solution and gain add-on sales.
- Sell total systems–not pieces or parts.
- Liabilities: Arrogance, tendency to overpromise benefits and underestimate the resources required for the solution.
Part Three: Everybody wants wheels
Building a strong working relationship over an extended period of time became the job of Ben the Builder, who came up with Wheel Safety Week: a free service to customers of wagon-fixing shops, where Max’s Wheel Co. would provide promotional material, a trained technician, and special tools to test for wheel warp, axle wear, alignment, cracking, and squeaking. The promotion unburdened wagon-fixers of their worries, and was a true service.
In a Builder Sales Market, the answers to the six bedrock questions are:
- Our customers are experienced B2B buyers and secondary customers who have influence over the sale–they can say no, but can’t authoritatively say yes.
- Our competitors are companies selling the same product or service, companies selling new technology or radical, nonstandard improvements to current technology.
- Our customers want what we’re selling because we sell a standard product or solution to a customers problem and know the customer well to adapt features, options, delivery, and support to each individual customer.
- People prefer us over our competitors because we have intimate knowledge of the customers business and individual needs and have developed trust.
- People prefer our competitors over us because of lower prices.
- The added values our salesperson has to offer to make a sale is the capacity to build a trusting relationship, manage complexity.
Common characteristics of the Builder Sales Force:
- Justify higher prices by looking out for the customers best interests.
- Document cost savings and revenue gains for the buyer.
- Have detailed knowledge of customers business.
- “Do whatever it takes” attitude and a quick response to customer needs.
- Focus on the account, not the project.
- Rely on a management willing to invest time and resources in building relationships with customers. They invest in the customers who are most likely to spend the most.
- Identify with the customer; a sense of being the customer advocate inside the seller’s organization.
- Disrupt internal routines and policies for to benefit the customer.
- Keep pace with technology, they know where and how to get technical expertise.
- Lets customers and markets go when it becomes impossible to service them profitably and competitively.
- Liabilities: Too much identification with the customer; advocacy of the customer at the expense of the seller’s financial health; too conservative in the face of technological change.
Part Four: Billions and billions of wheels
When markets mature, product improvements are incremental rather than revolutionary. Once a technology matures and products based on it achieve parity with one another, it becomes difficult to make radical advances, because customers expect standards to be observed, and because commodity prices do not allow margins to justify big development expenses.
As Max began facing new competition he visited the Oracle again, who gave him two choices:
- Seek a market niche in special types of wheels
- Seek to dominate the wheel mass market
Max made the decision to delegate specialty wheels to the Builder Sales Force and retain only the very best performers. An entire new organization and sales team would have to be recruited and trained to deal with the new mass market for wheels.
Max’s Wheel Co. now focused on building brand–getting the company named as official supplier of wheels to the championship chariot races, hiring an ad agency to formulate an ad campaign with billboards and posters plastered all over the city.
To resolve Barries to sales:
- “The price is too high”: Resolve with easy credit, installment payments, and discounts
- “The distance is too far”: Offer convenient locations, free delivery, and catalogue ordering
- “It’s not fast enough”: Offer faster service, efficient store layout, streamlined checkout, broad inventory, one- stop shopping
- “I don’t want a bad experience”: Give customer interaction with sympathetic employees, no-hassle exchanges
In a Captain-and-Sales Crew market, the answers to the six bedrock questions are:
- Our customers are experienced B2B buyers with no major customization, an administrator or purchasing agent in a retail market.
- Our competitors are those selling the exact same thing.
- Our customers want what we’re selling because it’s the standard, established solution.
- People buy from us over our competitors because of our low price, convenience, and habit.
- People buy from our competitors over us because of a lower price, better service, and greater convince.
- The added values our salespeople have to offer to make a sale is differentiation from the competition through superior service and efficiency.
Common characteristics of the World-Class Sales Crew:
- Repeatedly drives home the need to make the customer happy.
- Maintains a highly efficient system to service customers and bends rules when warranted to keep individual customers happy.
- Compensation based in part on some measure of customer satisfaction.
- Undergoes training programs to develop skills and keep the crew up-to-date on systems and products.
- A management effort to make the company a great place to work. Lots of cheerleading and recognition that crew salespeople are not self-starters and require strong leadership.
- Liabilities: Shallow technical understanding–an inability to deal with anything for which a corporate system is not devised.
Maxim: No company can be all things to all customers. Therefore, choose the customers for whom you can deliver the most value.