A blog by Peter Stinckens
There 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.
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.
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.
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.
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).
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.
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.
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.