What stops you successfully selling using Value?

Google

By Peter Browne

The price of greatness is responsibility.

Sir Winston Churchill.

How can you engage a customer in a value discussion? Todd Snelgrove from SKF Global is a world leader in value and total cost of ownership (TCO). We  asked him what common mistakes companies make and what are the critical success factors when selling on value. He explains the need to be clear on the value you can create for your customers.

http://youtu.be/3P2vf7R6xSc

From this video you can see how important it is that a company is fully committed, from the CEO down, before they can successfully sell using a value proposition.  For help to improve your profits and reduce your costs over the long term take a look at our workshop http://www.gordianbusiness.com.au/strategic-account-management/ or contact us on +61 (2) 9450 1040 or email peter@gordianbusiness.com.au.

We would love to hear your views so please comment below and subscribe at the top right of the page.

How to pick a winner?

Google

By Gary Peacock

As the excitement mounts for the Melbourne Cup, the horse race that stops Australia, many people are trying to pick winners. In horse racing you win, not by listening to what the owners say, you win by looking at form: what the horses have done.

“The spirited horse, which will try to win the race of its own accord, will run even faster if encouraged.” Ovid.

In business, with your customers, how do you pick winners? By winners we mean profitable and loyal customers. Similar to horse racing don’t listen to what customers say, you win by watching what customers do. In some markets when a customer says they want to partner with you, what they mean is they just want to reduce your prices to take some of your margin. If they really wanted to partner you would see some specific actions to show they were serious about building a stronger and deeper business relationship. Later we will explain what you should see if your customer is serious about being a partner.

Our first tip about picking winners is a technical one: segment your customers.  By segmenting we don’t mean what the marketing department means— segmenting using customer demographics and customer needs. We mean segment customers by their relationship with you.

We use a simple method: how important is the relationship with you to them; how much value do you deliver to them, as they see it. This gives us four possible segments:

Relationship (to them)	Value (To them)	Segment
Low	Low	Transactional
Low	High	Technical
High	Low	Relationship
High	High	Partner

To pick winners, once you segment your customers you must treat them how they want to be treated. Some people think winners can only come from the Partner segment. In our experience, winners can come from any of the four segments.

For the sake of brevity, we will discuss just two segments. Transactional customers are the toughest. They want your lowest price and fastest delivery. Nothing else. Spending time on relationships or spending time sharing technical information is wasting time and wasting money.

If you want to pick a winner with a Transactional account: make it as easy as possible for the customer to do business with you. Find ways to automate transactions and take all possible costs out of the relationship. Spend less time and money with them. Automate the transactions in ways which build barriers to your Transactional customer swopping to another supplier. Can you create unique connections to their systems and processes?  

Some of your people will resist automating transactions and talk of moving this account to another segment. In our experience, it is tough to move a Transactional account to another segment. If you are going to assign time, money and people to moving an account from one segment to another, then try to move a Technical account to a Partner account. It’s easier and more likely to succeed.

So, how about customers in the Partner segment? Typically, your staff want to put more of your customers in the Partner segment than belong there. The killer question is: how much of their time, money and people are they investing in the relationship, compared to your company? If you have been investing far more in the relationship for more than two years, then this customer does not belong in the Partner segment.

If your customer is serious about being a Partner, then what should you see? Over two years you should see more of their people, more senior of their people attending more meetings to discuss more strategic issues in their business.  If you see this, you have picked a winner.

For more insights into segmenting customers look at: http://www.gordianbusiness.com.au/strategic-account-management/ or contact us on +61 2 9450 1040 or email gary@gordianbusiness.com.au. Please share your comments below and subscribe at the top right of the page.

Chaotic changes requires agile responses

Google

by Stephen Kozicki 

The competitive market that we all operate within is changing fast; past successes are not predictors of future success. Your competition is changing and changing fast. The question is are you?

When we work on live negotiations we work hard with our clients to develop a strong value proposition; to know who the key decision makers across the table are and to find the best way to frame the value of the deal. A competitive advantage is now temporary; it is almost deal by deal.

Becoming more complex and chaotic is not just unique to business; it applies to cities and countries. Recently after a long period of economic decline, the city of Detroit filed for bankruptcy protection.  My American friends said that we all knew it was coming, but no one was agile enough or courageous enough to take a tough decision.

http://www.huffingtonpost.com/news/detroit-bankruptcy/

When you read some of the comments from the Huffington Post the changes to the car industry did not happen overnight; the changes occurred over a period of time. Too often in business, we hope that the trends we see are not permanent or will not impact our business. Today they often do impact our business with disastrous results.

The purpose of this blog is not to unpack the demise of Detroit, but to ask you these questions:

• Are you seeing chaotic behaviours in your markets by top accounts or erratic competitors?
• Are you making decisions quickly enough?
• Are you agile like a small mountain goat or rigid as a big rock?

In your new operating environment to gain a new competitive approach you need to use your extensive knowledge of: your key decision makers and how you can frame value for them.

Our experience is that great global negotiators spend more time preparing for the negotiation than the average performer. I would assert that there was enough information 15 years ago to allow Detroit to prepare for the chaos ahead and start negotiating for a different outcome. For a long time competition in the car industry had been chaotic. In Detroit their response to tough global competition was to continually drop the price of the cars produced, which meant value suffered.

Your market and competitors will change quickly and often use price as a weapon. Be agile in your response. Don’t drop your prices to match your competitors, leverage value based on your total solution. To find out how to leverage your value in negotiations click here: http://www.gordianbusiness.com.au/negotiating-with-style/.

For unbiased, practical advice when planning for your next negotiation, contact us on +61 (02) 9450 1040 or Stephen@gordianbusiness.com.au. Please share any comments you have and subscribe to our blog at the top right of the page.

How can you add value for your customers?

Google

By Peter Browne

Post-Election 2013 – are you match-fit for the opportunities ahead?

 "The key here is to understand that a value proposition is not merely a product or service; it includes the entire customer experience."

Fred Reichheld

Heading into the election, the economy was by far the most important issue for voters.

In the New Year we described 2013 as a year for “Focus, Persistence and Discipline”. It has certainly lived up to those expectations. Even before the election was announced, Australian business leaders had expected weaker business conditions in 2013. Pre-election uncertainty feed a reluctance to commit to longer-term business plans and a lack of investment worsened an already stagnant environment.

The vote over the weekend to install the Liberal Party signals the end of an intense period of politicking that has been an unwelcome distraction. Much of the uncertainty has plagued decision making across industries. The election outcome should help remove much of this uncertainty and allow companies to focus on the year ahead with greater confidence.

The new government needs to urgently get on with business to lead Australia through a raft of challenges: structural change across industries, a weak domestic outlook, declining global competitiveness and a patchy global economy.

For business leaders, this lull has forced companies to re-focus: to review their business models, their markets, customers and costs.  Now is the time to re-position for growth. We have adjusted to do less with less, now we must prepare to do more with less until sustained growth is certain, and ask two questions:

“How can we sell more of our current products and services to our current customers, with the same resources?”

“How can I grow my customer base without adding resources?”

One proven way to achieve these outcomes is to offer more value. Offering more value is seen in the following short video from John Fahey, CEO of National Geographic. John discusses the changing face of value and the need to understand customers more deeply than ever before.

 http://bit.ly/15oNHRP

We would love to hear your views so please add your comments below and subscribe to our blog at the top right of the page.

If you are struggling to identify ways to offer greater value to current and prospective customers please contact us to discuss how we can help on +61 (0)2 9450 1040 or email peter@gordianbusiness.com.au

Is your sales development investment targeting the right problem?

Google

By Peter Browne

Are you serious about creating an account team that can think and act strategically? Or are you doing the same things as your competitors each year, and making no meaningful progress?

Based on a recent survey by Executive Conversation it seems the latter is the case for most companies.

The June 2103 survey found “understanding customers’ business needs” was the most important issue for companies. It also found that training on financial acumen and selling to customer executives were also of high importance.

Yet when you look where companies are investing their development dollar, there is little reason to be confident much progress will be made in any of these areas.

Currently almost 90% of companies include training on products and services in their sales development programs. And despite the fact that respondents rated their team’s product and service knowledge as excellent or above average, they plan to continue to dedicate the highest percentage of their sales development investment to more product training.

This illogical situation does not surprise us.

In our work across many companies and industries time and time again we see the same problems. The account team are so focused on selling products and hitting their targets that they spend no time trying to understand the customer’s business needs; they have poor financial acumen so lack confidence when conversing with senior executives. So, it is blatantly obvious why account managers struggle to sell to customers executives.

Today’s fast paced and resource constrained business environment has changed the game for account managers. Senior executives expect key suppliers to understand their business and they expect you to do your own homework. So when you are given the chance to meet with or present to them, they expect you to understand their business, your business and engage in language they understand – financial language. If you fail on any of these points good luck getting in to meet with them again.

Companies that are serious about changing the way they work with their key customers, and build more strategic relationships must get off the “product training drug”. They must equip their account team with the skills and processes to understand their accounts more deeply, and understand and convey value in business language.

So if you want to stop banging your head against the wall, do something different this year with your team to change the way you work with your key accounts. Based on the evidence you will be one of the few.

For help in changing the way you work with your key accounts call us on +61 2 9450 1040. Please share any thoughts you have on this below and subscribe to our blog using the RSS feed at the top right of the page.