Ever heard of the Pareto principle?
Named after the economist Vilfredo Pareto, this principle registers an unequal relationship between investment effort and inherent revenues by stating that the market average shows 20% of the invested effort to be responsible for 80% of the achieved revenues.
Sales wards, the fact of the matter is that the top 20% sales people earn 80% of the revenue, both in deals as well as in sales commissions.
Sales are one of the hardest areas to excel in and it just gets worst if the following criteria are met:
- you do not know the suspect – a suspect is someone who fits the profile of a potential prospect, that is someone who can become a client, easy no?
Well, when you have, let’s say a “Cheap Baby Walker” as your sales portfolio, all families of newborns or about to be born children with low income are “suspects”.
The process of buying is an emotional one, therefore, one that deeply depends on established trust. If you are a stranger there is no trust rapport in place and that is the initial barrier that you must overcome prior to an attempt selling anything.
- the suspect is not aware of the Brand you represent – one key factor for a suspect to be turned into a prospect pertains his/ her awareness about the Brand you are representing.
In the modern market, people get their sense of quality and reliability via the Brand and not the product, so an unknown Brand represents a major barrier.
- there is no pain – if someone is in pain he/ she will buy whatever will stop the pain.
The pain may be a problem in need of being solved (e.g. like something that is preventing a company from getting more revenue or producing more units), a mandatory need (e.g. someone who will start a job far from home and is in urgent need of buying a car), or envy (getting something they perceive being entitled to have, because someone they envy got one).
If the suspect is not aware of any compelling reason to buy, then you first need to demonstrate that there is one hidden pain or need, and that is hard.
- the brand you represent has no track record – even when people trust you, that may not be enough to turn a suspect into a prospect since most people are prone to rely on the existing benchmark.
Let me clarify; if you (as a client) have the need to buy a new smartphone and someone in whom you trust tells you that there is this new Brand which is great, this, by itself, may not turn you into a prospect towards becoming a client of that Brand’s devices. Most people will require 3rd party positive testimonials about the product to gain some trust in that Brand’s potential to meet their expectations.
Some Brands, like Apple, outsell their products on market release because such a positive testimonials momentum has been raised around them, leading people to feel compelled to buy.
The main tool of any sales activity is the establishment of a Pipeline Process.
Think of it exactly an oil pipeline; in one end, someone will pour a given amount of oil and at the other end (many thousands of miles after) some oil will arrive (minus the volume that was lost to leaks and evaporation).
Any Sales Process in a competitive marketplace if successful will still be representative of the Pareto law 80% will be losses and 20% deals.
In a Sales Pipeline process, you need to:
- qualify the suspect – you need to look for individuals within target companies that fit the “suspect” profile (remember that even when dealing with companies, you are dealing with humans!). There is no point in trying to sell a baby walker to a single 50-year-old man, now is it?
At this stage, you also need to identify if that person has decision power or owns the required budget for a potential deal.
You need not to exclusively address the budget owner or even the decision maker. You may be just as successful if you gain the trust and manage to gain the buy in of a stakeholder who is an influencer, yet you need to clearly identify with whom are you speaking.
- choose the timing wisely – what happens to those cold call sales people who make the 1st phone call on Monday morning or Friday afternoon?
Yes, … zero sales.
Monday morning is the time of the week when all that should have been done or has happened, falls into the lap of people; and Friday afternoon, well, the individual may be there, but the mind has already left for the weekend.
Choosing the timing, nevertheless, goes far beyond this; you need to study your suspect and understand what is the time window when he/ she will be ready to actively listen to your sales pitch. It can be after his/ her football team has won a game or having achieved some personal goal, etc.
- sell the Brand and sell yourself – the suspect needs to gain trust in both the Brand as well as in you, much prior to getting to like the product. Once you get that, you have a prospect.
- qualify the pain – now that you got yourself a prospect you need to assertively qualify how much his that prospect mature towards a sale.
Again, if someone is in pain, that means he/ she is ready to buy (even if not from you), but if there is no pain or need, you must invest time in raising that sense of need. So, you need to articulate a sales strategic approach taking into consideration the personality and readiness of each given prospect.
- identify the leverages – what can you say and how can you convey the message, using which support data/ material to create both awareness and trust in the suspect’s mind towards your portfolio potential to solve an existing pain?
- go for the kill – now, the first thing you need to always have present in your mind is that you should do to others as you would like to be done to you. Meaning you would like a sales person to explain how and when their product or solution is able to solve your problem right? So, there are for points (the 4 Ps) that a sales person needs go through in order to achieve a successful sale:
- the Promise – your key initial message line, when you start your sales pitch, it must be a short, assertive and direct sentence which clearly and unequivocally conveys to your prospect WHAT are you selling, WHY is it going to represent added value to him/ her while solving a pending “problem to be solved”.
- the Picture – your next message needs to be one that reinforces the previous clarification statement.
Meaning you need to make your prospect picture HOW in his/ her daily life will he/ she effectively benefit from having bought what you are selling.
Mike Row, the host of “Dirty Jobs” once explained how he got the job, someone asked him the traditional “sell me this pen” question and instead of going after tech specs or the looks, Mike conveyed an overwhelming picture that could impact the prospect; he said “imagine you have closed that deal you had been after for months and when the time comes to sign the papers, you reach for your pocket and there is this old, chewed up pen. What image would that convey about yourself when compared to this high quality, beautiful pen?”.
Attack the emotional side, … again, we are all just humans.
- the Proof – now it’s the time to show the 3rd party testimonials that state how great the Brand and product you are selling is.
Do not mention it, do not speak about it, let other people do it instead.
- The Pitch – unfortunately most sales people go over the other Ps and move straight towards this one.
This is the stage when you move to close the deal.
This is it. So, what do you want out of this stage? Yes, … you want one, and only one action taken by the client; buying what you are there to sell!
So, take care not to ruin everything by allowing multiple choices or prices according to options, etc… No! go for the kill; one sale at a time.
- maintain your client base – ever the heard the expression “getting a client is hard, yet keeping it is harder”.
It’s truth, and … no, it does not concern competition.
Once you close a deal, you need to deliver as promised. And once you have made that 1st-time client happy, you need to uphold the standards that you have set.
No lowering the bar allowed, just upwards. The client will not expect to get a poorer job the next time, only a better one. And that is how you get great testimonials, which will pave the way towards new clients … told you … not easy.
Now, doing all of this on the fly is just not possible.
No matter how intuitive and a natural born sales person you are, things escalate in volume, diversity, and complexity. Remember that each client must be addressed and the individual he/ she is and you buyers, stakeholders and influencers to deal with, so, layers of complexity in each potential deal.
You need to follow a Sales Methodology, which sets processes in place that allow you to not forget vital steps and ending up losing deals by omission.
This article focuses on the MEDDIC Sales Methodology, nevertheless, the best way to better understand what sets it apart from the other existing main stream ones is to start by shortly introducing them.
The Sandler methodology
The Sandler Sales Methodology was developed in the 1980s. It is usually applied in short sales cycles business environments, therefore focusing on 1o1 sales and consists of basically 7 components:
- Establishing rapport – understanding how the client interprets the world and fine tune the message and attitude towards fitting the buyer’s key communication rules, guidelines and perspectives. Now, this doesn’t mean to fake you are someone you are not, yet to fine tune your approach towards the suspect’ comfort zone.
- Establishing an upfront contract – clearly define ahead with the suspect which are the expected outcomes of each interaction and the required time frame. So, if you are going to meet or call the prospect be sure to set the mutual expectations in advance; the likes of “in this first meeting, I would like to present you, over the course of 5 minutes, the brand that I represent and gather some information about your company and business. We should not need more than half an hour”.
- Uncover the main existing pain points – as mentioned, people buy upon compelling reasons for, and having a pain is the most compelling of all.
To be assertive and straight to the point you should use the greater portion of your initial meeting with the suspect not to speak of your portfolio or try to sell but to actively listen.
That is why you should not take more than 10 minutes to introduce the context and then spend the remaining 20 minutes listening to client’s existing pains, problems, and aspirations. What is the problem to be solved?
- Budget – you will find that most pains have not been quantified by your counterpart, so, unless the suspect tells you there is a budget, do not ask how much money is there to spend on a solution to the identified problem.
You need, instead, to ask the suspect how much does he/ she perceive that each specific pain is costing the company? What is being lost or not accomplished due to that pain and which is the economic impact?
- Map the decision-making process – who owns the necessary budget, who can influence the decision process both positively as well as negatively, who will benefit the most from having the pain solved and why?
- Fulfillment (suitable portfolio elements presentation) – after having undisclosed where does it hurt you are now in the position of tailoring your presentation towards the raised pain points.
If someone has a toothache what good is there is telling them you know this great plastic surgeon?
You only do a presentation after having qualified what is the pain, the budget, and the decision process.
In some cases, you may even find out that the person you are speaking to is not even a facilitator, much less a decision maker and therefore it is pointless to do a presentation, so what you need to accomplish here is to convince that person to facilitate a meeting with a stakeholder.
- Reinforce the pitch with after sales arguments – reassure the now prospect, that he will not witness the vanishing salesman phenomena once he buys from you. Meaning like in some cases once the deal is closed the client never ears from the sales people until they have something new to sell him/ her, your company supports clients, and you will be around to actively support him/ her even if that does not mean new business.
And, of course, live up to it.
SPIN Selling Methodology
Neil Rackham (a behavior psychologist) developed a sale methodology which focuses on consultative selling, meaning the sales person needs to do proper research, by posing relevant questions to the suspect and prospect which enable him/ her to start visualizing the solution, hence becoming prone to the sale.
The main guidelines of the SPIN selling methodology are:
- Obey by the Pareto Law – meaning speak for 20% of the time and let the suspect speak for the remaining 80%.
- Profiling – start by identifying the personality trades and profile of the person in front of you, the suspect. In a similar way, as in the Sandler methodology, the best way to establish rapport with someone is to tune one’s speech with the counterpart’s attitude and expectations/ convictions in a supportive manner.
- Uncover the main existing pain points – As previously mentioned, one major milestone that any sales person needs to reach is to clearly map what hurts the suspect.
- Always ask open ended questions – do not ever ask questions that may have a yes or no as an answer; when you address a suspect, a prospect or a client you want to entice a conversational flow that allows moving and evolving from one topic and stage to the next. If you get to a yes or no, you have to rebuild momentum, and that causes demotivation in you counterpart.
Now SPIN stands for:
- Situation – identify the current environment where your suspect currently operates. Ask questions about market potential, competition, industry challenges legal taxes driven issues, other
- Problem – given the existing situation what are the main problems (pains) that the suspect or his/ her company is experiencing. If there are no problems, then there must be some aspirations, right?
- Implication – how are the identified problems or aspirations impacting the company?
- Need Payoff – ask permission to introduce a potential solution for one or more of the existing problems to be solved and move to your portfolio offering.
Miller Heiman (Strategic Selling) Methodology
The Miller Heiman methodology focuses on creating opportunities within the CRM scope (not the tool but the relationship management with suspects, prospects, and clients), and the three main areas are:
- Creating new opportunities – communication skills are the core of human interaction and since a sale is a highly emotional and therefore human dependent process, it is vital to master and plan each interaction that you have with a suspect, prospect or client. Your goal, as a sales person, while undergoing each interaction is to raise new opportunities.
Sales are less about products or solutions but about what your counterpart aims to accomplish being it an aspiration or the need to solve a problem.
This is why it is vital to elaborate the right questions and to apply the Pareto law while at it, listening to 80% of the time and not taking more than 20% for posing open questions.
- Managing opportunities – at this stage you need to analyze your position within each opportunity, meaning who is your competition, how do they position themselves, to whom do you want to sell and for how much money, how does the client perceive you and the Brand you represent versus the competition, who is who from the suspect’s side in the buying process (influencers, decision makers, stake holders) and so on …
This stage represents a decision gate in the pipeline where you decide which are the opportunities to follow and the ones to drop since the time and effort along with the success potential are too low. There is a clear notion that you do not have to, and in fact, is must not/ cannot follow through all the sales opportunities that you come across with.
- Managing relationships – the main focus of any sales process is the establishment of fruitful relationships between the parties. But from a “Key Account Manager” perspective the relationship must be based on a strategic approach that takes into account each specific characteristic of the herein mentioned factors towards each individual and target company.
The Miller Heiman methodology is based on strictly compartmentalized stages, supported by mandatory template documents that register and allow a workflow between the above mentioned three main components.
So, making a combined summary, Sandler started by laying out the salesman/ women process in a structured way; then Neil Rackham (a psychologist) structured it according to human emotional status and reactions and the Germans, under the Miller Heiman methodology created a structured workflow (don’t they always?).
Now, the MEDDIC Sales Methodology, how does it differ from what was previously mentioned? Is it better, worst or merely representing a different angle?
You will be the judge of that.
Jack Napoli (as 40-year IT B2B backlog bearer sales representative) developed the methodology which comprehends the following 6 qualification areas:
- Metrics – do not undergo a “wild goose chase”, meaning identify and focus on opportunities that bear a positive economic impact towards your suspect, and qualify according to ROI rate, meaning focus on the opportunities that have a shorter return cycle.
- Economic Buyer – This is the person within the organization that has the power approval to approve the required investment, so the one who will give either the go or no-go to a given project.
You must discover not only who this person is but also how does it perceive the pain and the urgency of solving it. Your primarily focus must be on meeting this person and checking for his/ her sponsorship, criteria and next steps.
Make sure to properly prepare yourself for this meeting, for it can be a make or break milestone in your sales process. Once you enter the meeting clearly assess if the person in front of you really is the Economic Buyer, if not you will not only be wasting your time as well as maybe jeopardizing your sale.
- Decision Criteria – there is always some decision criteria to account for. They may be legal compliance issues, or proven track record or international scale or pricing range, other, but every buying process has decision criteria that must be met. Usually, from an organization stand point the criteria are published or informed, yet you need to find out the main stakeholders, influencers’ and the Economic Buyer personal criteria, for those are usually not disclosed and can render your entire effort pointless.
- Decision Process – How do decisions take place in this target company; which action takes place by when and performed by who? Accurately mapping this workflow enables you to timely get in touch with some of the participants to “register your presence” and influence the decision.
- Identify Pain – alongside with a clear identification of the champions for each area in the target organization the most important thing to be identified pertains the most severe and critical pain points that represent problems in need of urgent solutions.
These are things that represent a severe negative impact on the target company in terms of time, cost, risk and/ or revenue if not solved within a certain time frame.
- Champion – this is the person within the target organization who will benefit the most from having the pain point addressed and a proper solution in place.
It is not necessarily the Economic Buyer, but the one who will defend a solution internally until it gets implemented.
In most large companies, every system within the IT Landscape has its inherent budget allocated to the CIO, so, as an example if the accounting area is not able to assure timely payments to suppliers’ due to some issue with IT Systems, although the head of this area is the Champion, the Economic Buyer is the CIO.
The MEDDIC methodology addresses the same points as the other herein mentioned methodologies, yet there is a main differentiator factor which is also its main leverage in terms of positioning the provider towards business potential with the target company; CRM mapping (now I am speaking of the System).
MEDDIC focuses on detailing the target organization prior to identifying concrete pain points and attempting sales approaches.
That bears the advantage of creating a clear picture of where are the “easy gateways” as well as where lay the potential “roadblocks” as well as it presents the downside, of requiring a large initial investment in “drawing” such a wide and accurate map.
Nevertheless, if done according to assertive priorities and focal market niches, the effort is certain to provide an unparalleled edge over the competition, allowing a prompt, assertive and focused response once a concrete business opportunity arises.