Wednesday, March 08, 2006

Sales Philosophy

Sales is the process of creating value for your customer in order to capture a piece of that value for your company and yourself.  

A few years back I heard a non-sales executive say that sales is the process of overcoming objections.  This seemed wrong to me, but at the time I could not exactly say why.  Now that I have formulated my own definition I know exactly why that executive was wrong.

The sales process actually consists of two separate but interrelated processes: creating value and capturing value.  Because creating and capturing value is what business is all about this clearly makes sense, but lets look at how these two processes influence sales.

When people talk about creating value, often they mean creating value for their company’s shareholder, but in sales creating value means creating value for your customer and your customer’s shareholders.  Creating value can take a number of different forms.  Maybe the product is so fantastic that its value is obvious to the customer.  In that case sales just got a lot easier!  

More often, creating value takes the form of explaining the product and more importantly how the customer can utilize the product to improve some business metric.  When the underlying products are nearly identical, creating value may take the form of improved delivery, better terms, or easier business process interactions.  Alternatively the salesperson could have such a pleasant personality that the customer just loves to do business her; that’s also creating value.  

Notice that in the discussion about creating value, I did not mention price.  As the sales process progresses, your customer will place a certain value on your total sales offering.  The price that the customer pays for that value is the mechanism that your firms use to capture a portion of the value that the customer sees.  If your sales offering can deliver much greater value to your customer than your competition then you will have the ability to command a higher price.  

It is really that simple.  Unfortunately many people do not seem to understand that sales is a two way street.  If the customer does not see the value, you either have not done a good enough job of articulating the value or you are deluding yourself about the value that your company can provide to your customers.  Likewise, just because one customer thinks that a particular product is the best thing in the world does not mean that another customer will recognize that the product brings the same value to them.  Value is customer specific, so creating value is a separate, often personal process with every customer.  

So that is my sales philosophy.  I try to make sure that it permeates every aspect of my sales engagements.  If you like it, make it the framework for your sales engagements too.  That is of course unless you are calling on my customers!

1 comment:

Sales Call Reluctance Coach said...

Thank you for your thoughtful post. Am helping a client with interview questions for salespeople. What do you think of the interview question: What is your sales philosophy? All my years as a sales call reluctance trainer and sales coach no one has ever asked about my sales philosophy. I like your's. Am training a pharma group soon and will pass your blog along.
Connie Kadansky