Hard lessons about planning the sale
(MoneyWatch) The giant thud over at J.C. Penney is a cautionary tale for all sales folk in the pre-approach phase of planning the sale. Even those who sell in the business-to-business (B-to-B) world.
Former Apple store chief Ron Johnson, the new J.C. Penney CEO who was behind the "cheap chic" strategy at Target stores, is learning a hard lesson about his sales planning. A new anti-sales pricing strategy that offers everyday low prices lost $163 million in the first three months of 2012 for the $3 billion department store chain.
Johnson thought his shoppers would embrace lower "fair and square prices." But he now admits that his customers are hooked on coupons and sales. Macy's had tried the same approach strategy in 2005. Sales fell, stock prices dropped and the plan was abandoned.
In any pre-approach phase, you have to understand your prospect to succeed. It's as easy and as difficult as that.
Unlike retail, in B-to-B selling, landing a big key account sale requires the following:
1. Identifying your prospect or prospects
2. Knowing your prospect's biggest problems
3. Pitching to the highest-ranked people in your prospect's company
4. Developing a solution for your prospect's biggest problems
Think of your last big sale. Would you like your next one to be twice the size of that one? Or perhaps three times? Or 10? Maybe 100 times?
You want this number to be large enough to keep you focused and motivated during the hunt. If you set it too low, you may give up in frustration at some point, thinking it's just not worth it. On the other hand, it has to be within the realm of reality. Just make certain that your current reality is not limited to the concept of selling more of your product or service.
It's natural to think in terms of landing your next big deal through selling more and more of your products or services. But the truth is that's almost never an effective pre-approach strategy. Thinking in terms of a broad solution for all of your prospect's needs will help you form a solution-based relationship with your buyers rather than a product or immediate need-based relationship.
Currently, what you solve when you sell to a buyer is an immediate problem. Your buyer needs something now. It's a finite number with a quick timetable. It can be as small as light bulbs or as large as pre-fabricated homes. It can be a workshop or a series of presentations on life insurance. They need it; you provide it. That's the extent of your deal, and you go on to the next one.
Of course, that's a huge generalization, but the point is you have very little control over when this sale will take place or what size the order will be - two issues that are the essence of any deal. Both are controlled by the economy, the success of the buyers' business, customers' demands and lifestyles, or other factors. Neither is controlled or driven by you.
That makes it extremely difficult to sell more and more to any one buyer. How can you plan to make any buyer need more of your product or service at any given time? In truth, you can't. You may be able to find more buyers and sell to them, but they will be individual small deals, not a really big deal. You have to think and speak in terms of an overall solution to all your prospects' needs over time.
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