The Three Components of a Successful Sale
A successful sale is the result of a range of factors, and it’s difficult to definitively list the actions that will guarantee a sale every time regardless of the situation. However, just because it is difficult to do, that doesn’t mean we shouldn’t try!
Indeed the rewards for success are high. Over the coming months, I plan to share some of my experiences in sales, sales management and building an effective sales force for the healthcare industry. I plan to offer a framework for analysing your own particular situation, prioritising your areas of action and some elements that are essential to ensure implementation.
After 25 years in pharmaceutical sales (with the occasional detour into devices and marketing), I have come to the conclusion that being successful in sales requires the salesperson to be aware of some fundamentals that may not immediately be apparent to everyone, have some basic capacity for understanding and the motivation to succeed.
The fundamentals of consultative selling have been extensively studied both as an academic discipline by psychologists and more practically by business and commercial gurus for, if you have any doubts, I refer you to a book written and published in 1922 “The psychology of selling life insurance by Edward K Strong”
Other than some of the obvious mannerisms and particularities of US culture in 1920s, not a great deal has changed, this book could be a handbook for every professional salesperson today. So what happened? Why are sales people missing the fundamentals? Where is the complication? In my experience, there are two root causes for our failings:
#1 – A Lack of Clarity
I would like to paraphrase Lewis Carroll:
“If you don't know where you are going, any road will take you there.”
This would seem obvious; however, it has been my experience that a poor understanding of what is required to get the sale is the most frequent reason given for the failure of all elements of the sales process. This is true as much for sales targeting and process management as it is for the implementation and selling skills on display in front of the customer.
#2 – Lack of Confidence in the Process
The blind belief that “innovation” is needed and required! Frequently, innovation simply means doing it a different way. In fact change is not only considered good but is considered as an absolute requirement! Different is NOT always better! This cause also has its roots in cause #1! A lack of understanding of the sales process.
To illustrate this point, I often refer to the video, The ministry of silly walks by Monty Python.
The video definitely demonstrates innovative and different walks, but let’s be honest, they’re hardly effective! So what is this sales process that I speak of?
I will not bore you with the mechanics of selling (targeting, prospecting, preposition generation, presentation, negotiation, closing, servicing etc) which can be found in many books. Should the reader require such a book, I recommend Building a Winning sales force by A.A.Zoltners, P. Sinha and S.E.Lorimer.
I would like to offer you my crystalized observation that there are only 3 components of a sale of any product or service anywhere in any field. I find this framework useful because it quickly help me to define the key drivers of the sales process and what can be done to improve the result, the sale (which is all that we care about in the end!!!)
The 3 components
1. The Product: How different or valuable is your product to the customer? What is the USP?
2. The Person: Who and how the sale happens, this includes the sales process/experience (convenience, ease of transaction, enjoyment, hurdles etc.)
3. The Deal: The financials (price, terms, commitment etc.)
This may seem overly simple; however, I would argue that even the most sophisticated component can be put into one of the 3 categories. Indeed it is this very function that is the value of this framework. I you are able to understand which component makes the difference to you sale you can then make the efforts to develop and improve it! I will attempt to illustrate what I mean: Below is a graphical illustration of a mythical product where each component has equal merit.
1. If the product is unique, highly desirable and differentiated it offers a solution to a problem that the customer has and this solution is superior to that of the competition. In this situation the customer will be prepared to pay a premium on price and will not care too much about the sales process/experience. The most important component is the product. The focus of the sales team will ensure understanding and appreciation of the differentiated benefits of the product.
2. The product is not differentiated but highly complex! This is often the situation of consulting services (Legal, financial, medical, and business) where essentially the same service is offered by the different suppliers and it is simply a question of the credibility of the provider which determines the sale. This is probably the single most important situation where the person and the sales process are key to the sale. The salesperson must focus on building trust.
3. The product is not differentiated! (Commodities e.g. petrol, milk, bread, generic pharmaceuticals). In this situation, the customer believes that there are many sources for the product offering and the key driver will be the best deal that he/she can get. In this situation the key focus of the sales team must be to demonstrate the superior value (financially) of the product offered.
I have used some extreme examples to illustrate the framework and the relative merits of the 3 components. In reality each component has a role and it is important to understand that this role has a direct impact on the other components. Efforts to differentiate the product and/or to build trust will reduce the pressure on price and the deal.
A deep understanding of these 3 components and how they relate to you product and market situation will help you to decide how much emphasis to put on each and your subsequent development programs.
In the coming weeks I will address each of these three key areas individually, explaining to you how to maximise your leverage on each, how to assess and fix those parts of your process which may be broken and ultimately how you can make more of your money!
For more information on the ideas discussed in this colum, contact Ifti Ahmed on Ifti.Ahmed@titanium-partners.net