SELLING IS JUST ABOUT TO SELL… RIGHT?

I often hear people referring to others as “they are a natural salesperson”, which means, that person is capable to sell anything to anybody. While I agree that some of us have more skills than others to perform some activities, like selling, this statement undermines the importance and the complexity around the sales process, and the impact it has in your organisation. In previous blogs, I have touched base on the importance of having the right range of products and services. I believe, it is also important defining the role that sales has in your organisation and the level of engagement you have with your customers.

In this opportunity, I would like to go through three areas I consider important when dealing with your clients. Some might be obvious, but in my experience, they could get overlooked by the day to day responsibilities and short-term goals.

These areas are even more relevant if you are an SME. They are:

• Sales Objective
• Actual Offer
• Compliance

 

1. Sales Objectives

How many times have you challenged yourself about a deal you just did or the deal your organisation did? Could you do it better? What is the benefit of this deal for the organisation? How is the deal contributing in reaching the company’s objectives? Did it go as initially planned?

In my experience, I have seen multiple proposals that are focused on just selling –and don’t get me wrong, everybody wants to close a deal – but as the famous George Clooney’s Nespresso campaign says: “What else?”. Well, a lot!

The objective to sell is not limited just to the action, but it must be aligned with the strategy and objectives of your organisation. Either it is to promote a new service, to block a new competitor, to increase engagement with customers, to maintain inventory levels, etc… it is extremely important to maintain clarity on your objective and keep working towards it.

Remember the initial objective and focus on it:

As part of defining your objectives, you should consider the dependency your business has on a specific customer. It is quite common for the small and medium sized business to heavily rely on a few customers, mainly, because of the limited number of key customers they might have. Customer concentration is one of many indicators to assess the level of risk your business might have. While there is no rule, as a guidance, we could say that you have a high customer concentration when one of your clients represents more than 20{02294a49cb707d39fba7c35800b3ba014374aa1ef1f8a15aff36d8ebebbd29a3} of your revenue. Obviously, this percentage will depend on many factors, however, the essence of this “index” is to highlight the importance to manage the risk your business could have by depending too much on a few customers:

2. Actual Offer

Once you set your objectives, you should be able to define your offer. There are various aspects that need to consider, but as a minimum, it should include variables such as:

Products and solutions – range of products or services you will offer. Based on your objectives, you might focus on products that are impacting your inventory levels, or solutions that are easy to implement, or new products or services you might be launching in the market.

Pricing – this is about setting the right pricing policy and guidelines for the products you are offering. Are you offering a unique and fixed price? or the price would vary based on volume, payment terms, promotions, range of products to be purchased? Pricing is an extremely sensitive factor, and the impact on any pricing decision could last well beyond your current agreement. It’s “easy” to surrender to the temptation of offering a price reduction, but this could lead to a new benchmark price…once you sell an item at a price (ie. Promotional price) the consumer or your client will assume that’s the right and fair price, and it will be difficult to sell it at full price ever again.

Payment Terms – being an entrepreneur in the finance industry, I am passionate about trading terms. Within this section, I include not only the credit days you offer to your client to pay for services, but also, incentives for paying in advance, or discounts for accessing preferential conditions, or simply offering your customers the possibility to extend the credit days via a third party financial supplier. A well thought payment terms, could be the difference between “making it or breaking it”. Focus at minimising the amount of time between delivering your services and collecting your money and agree favourably terms for your supplier’s payments. Your objective here is to maximise your cash flow position.

3. Compliance

Once you agree on the offer and, conditions with your customer, you should make sure their expectations (deliverables) and yours (ie. Payments) are fulfilled. The first step to this is to have a legal contract. Be sure the documentation covers all commercial conditions discussed, as well as legal clauses. Chances are you will never need to action any legal procedure, however, in case this happens, you will be protected and have legal rights based on the contract. Remember to review your contracts and commercial conditions with a legal team.

While the contract is a must for every commercial transaction, compliance doesn’t end there. Compliance is more than the contract, it is about making the delivery of your product and services to your client a priority for the whole organisation. It is about having each department delivering on their commitments, focusing in reaching their goals.

But compliance is a two-sided coin, your responsibility is not limited to deliver the agreed products or services but also to make sure – or in some cases demand – your client complies as well. I have seen organisations that once they close a deal, they limit themselves to deliver the goods and services and collect the payment without taking much attention on customer compliance, impacting in the contribution the agreement brings to the objective of the organisation.

At the end, like with any initiative or action we take, it should be part of the strategy aimed to contribute to the overall objectives of the organisation.