New Business Revolution

A blog by Peter Stinckens

Creating ever lasting sales

puzzle sales marketingThere are essentially two ways every company needs to use, to obtain a healthy financial situation. First there’s the basic investment capital that needs to be acquired and then there’s the structural financing of the organization, the cash flow we can realize to keep our organization afloat.

The first one is – more or less – easy. You can find the basic investment capital by using your own savings, talk to friends, banks, investors, the large public, crowd funding, the government or the stock market. It’s a relatively stable environment that knows no fundamental changes over short periods of time.

The second one is harder. It’s all about sales. And the environment we have to sell in has changed – and is changing – drastically in relatively short periods of time. At least, the modalities of selling are changing very fast. They seem to be changing as we speak. However, the basic motivations are stable. By looking at the superficial changes of the environment we can be misled to think that the basic rules are changing as swell. And that, that’s one of the deadly mistakes many companies make.

It’s all about sales

Generating sales, organizing the customer flow and maintaining and expanding the day-to-day income of an organization is the first and most important challenge any organization faces. It doesn’t matter if you have to sell products, services, memberships or ideas. It does not matter if your sales consist of getting money (business) or memberships and government support or donations (non-profit or social profit). It all boils down to sales.

Every time I hear someone tell that they ‘do not sale’, I have to smile. Some consultant firms say they do not sale and get customers to line-up to start working with them just by the quality of their work, I know it’s a lie. Whenever an NGO says that they are not into commercial sales, it’s a lie. Whenever an artist says that he does not care about selling his work, it’s a lie.

Without selling, all these people would be out of a job. They sill loose the structural income they need to keep on working. Even Vincent Van Gogh, who sold just one of his paintings in his lifetime, had to sell the idea of his art to his brother to keep on working.

How does sales work

Whenever I ask this question, many people look at me ass if I just beamed down from Venus. It’s self-evident. Sales is; and then there are a huge lot of definitions that differ depending on who is talking. And if definitions differ so much, it can’t be self-evident what it is. So it’s a valid question to ask. How does sales work?

To find the answer to that question, we have to compare many different situation and look for the common elements. So lets take a look at salespeople that work in different situation and, not to forget, at their clients and the people they sell to.

For instance, take a showroom salesman, an account manager in a B2B environment, a door-to-door sales rep, a fundraiser for an NGO and an investment banker. You could be tempted to think they have very different jobs. And in some practical aspects they do. But the core of their jobs is the same. They offer products or services or peace of mind to other people who in return give them a certain amount of money for it.

It all comes down to one person wanting something and another person claiming to be able to fulfill that desire. To complete the transaction, something of value – usually money – changes hands. In general you can use the rule that the higher the perceived value of what you have to offer, the more value changes hands.

And finally, in almost all sales situations, it’s the goal of the customer to pay as little as possible for what he or she wants, and the goal of the seller is to get the maximum value for what he has to offer. So now we know how sales works.

Complexities in selling

Keeping all this in mind, we will now ad the complexity of day-to-day life that gets us confused about what selling is en how to do it the right way. A sales situation never seems that clean cut to us, does it? Well the main reason for that is that we ad a lot of complexity to the situation.

Marketing is the first guilty party. Marketing rules dictate that we have to differentiate. We have to create the perception (true or false) that what we have to offer is fundamentally different (and therefor better) then what our competitors have to offer. So we use additional services, different packaging, strange features and special possibilities and whatever we can think of to differentiate our offer. We often use this tactic so much that the original use or customer need for the product is Harley recognizable.

Marketing does two things. It creates some magic to hide the original offer and creates a perception for that offer to support the value customers perceive. Do it right, and you’ll be able to sell your products at a much higher margin (and the larger part of that extra profit goes to your marketing efforts). It comes down to hiding the real value and purpose of an offer and confusing that with the created perception of the value.

The second confusion begins with the way we communicate about or offerings. Even the simplest detail can become quite confusing this way. Just take a look at the rates of large telecom operators. It’s almost impossible to compare them. A simple thing, like the price of a service, requires you to calculate, compare, look at the value of free or bonus packs and investigate your own use of the telephone. Our brains do not like to do that (and marketers know that) so we don’t. We make our choice based on other factors like the likability of one company compared to another, or the image they project… And so we come back to marketing.

The third confusion begins when general communication sends us diffuse messages, often contradicting each other. Using scientific studies, expert testimonials and any other tool the can find, companies and their PR specialist try to convince us of their truth and try to steer our buying preferences towards their offer.

Why does this matter?

We all know about marketing. It doesn’t work on us, right? (Wrong, but you already knew that). However, if you understand the principle at work, another question comes to mind. If this approach works (and it does) and every large company does it (and they do) how can we, as organizations with not that much money to spent, survive in that environment? Well, you can’t.

There was some hope with the arrival of the Internet that companies large and small could compete with the same weapons, but – just take a look at the budgets involved – that was just a brief moment of a few years. Like with everything else that’s used by everyone, you have to spend a huge amount of money, just to be noticed. And an even larger sum to get real results in terms of additional sales.

Understanding how these things work is the first step to finding an affordable way to make a difference. Creativity is the first asset we look at whenever we start our own campaigns. But creativity can only make a difference when you truly understand the environment you have to work in.

Just imagine you want to make music without knowing or understanding anything about music or any instrument. You’ll be able to produce some noise (and perhaps even some nice noise), but you won’t concur the world this way (and probably you’ll have a hard time just surviving).

The right way – for you!

A second idea many of us have is to hire a specialist. That makes sense if you are trying to do exactly the same as anyone else does. A specialist is always specialized in the mainstream actions or a niche therein. There are no specialists in ‘new approaches’, because they haven’t been tried yet. So you’ll never find someone who specializes in things that do not exist.

And – believe it or not – that’s good news. That’s news that saves you a ton of money. You are just as much a specialist in new things as anyone else. You might need some support on the management of that project if you do not have that experience. And even some operational support, if you’re not used to deal with different media and other partners. But you would need that support also (or you are at least paying for it) when you work with a ‘specialist’.

So here’s the message. Scrape all the rust of your 3 pound grey matter, get informed about how sales really works (this article is a nice start) and start using your own creativity and that of all the other brains in your organization.

We often forget that. Suppose you have 9 people working for you. Including you, that makes ten units of the most powerful computer in the world. Haven them work together as one, and you’ll be able to achieve the most unbelievable results.

This is where you might want to hire a specialist; someone who could facilitate that working together, and interface that helps you all communicate.

All the knowledge you need

Everything you need to make a difference and boost your sales beyond your wildest dreams, is at hand in every company large or small that I know of, even if they do not realize it themselves. There are some misconceptions we hold on to, that prevent us from using all that knowledge. Here are the most import ones. Misconceptions you will have to eradicate before you can start.

  • Operational people have no significant strategic skills we can use. If they had them, they would be in management. I can experience time after time how wrong this conception is. Just take the time to involve everyone in your company in your efforts. Listen to their input. Use it – even if you do not agree with it – in a test and surprise yourself. You’ll be confronted with the simple fact that the way you see things is not the only way, and most certainly not the only way to achieve results.
  • You need a helicopter view to be able to develop a strategy that works. A curious misconception, since buying something is an individual act. Lots of those acts put together make up the total result. So the individual view, the narrow mindedness and very specific opinions matter just as well. You have that helicopter view, and yes, that’s important. But why not bring it together with a lot of individual viewpoint? IN my experience this is always a very rewarding strategic exercise.
  • You need to understand the workings of a company and a market. Only an experienced manager or MBA has that. This is the biggest load of BS that goes around in the business world. Find me one MBA or manager who truly understands the working of a market. You can’t. You’ll find people who have their opinions and ideas, but no one with an objective and correct understanding of how it works. We all take part in that market, and input from a single point of view can be just as important then a large theory. By the way, in several interviews we did with people at all levels of different organizations, we found that a decent understanding of how a company works and how the market it operates in, we fount that there’s no fundamental difference in knowledge and understanding that could be attributed to the position someone held in a company. With this difference, managers usually know the acronyms and names better then operational workers. Other then that, there’s hardly any difference in understanding how it all works.
  • This kind of thinking and organizing is exactly why you need managers. We can’t ask other people to do our jobs for us. Well, if that’s what you think a manager should do, I think you urgently need a reality check. A manager needs to organize these things. Yes. But to get the best possible approach, it’s always rewarding to get as much input, from every possible angle, as you can.

So now you’re ready

With all this, you should be able to find a new way of promoting your offer and getting people to buy it. Do not waste time doing what everyone else does. You will not have the budgets to outcompete the rest of the world. Use every brain in your company and find a way that works. You can! Absolutely!

When we start a business, we take a lot of time and effort to convince bans, investors and others to give us the startup capital we need. We seldom consider customers as investors. But they are. Every sale you make contributes to the structural investment of your company.

Imitating other companies is almost always a bad idea. Find your own approach, use new tactics, find new ways of communicating with your target audience and realize sales that you didn’t think where possible.

In a next article we’ll discuss a few of these new ideas. So keep an eye on this blog if you’re interested.

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This entry was posted on 25 August 2014 by in Management, Sales and tagged , , , , .
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