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CustomerCentric Selling® Sales Training Blog

Sales Tips: Is There a Worse Way To Ask for the Business?

Posted by Jill Perez on Jun 29, 2016 8:00:00 AM

Sales Tips: A Poor Way to Close

By John Holland, Chief Content Officer, CustomerCentric Selling®

Proposal ContractMany sales organizations place an extraordinarily high emphasis on closing. To ensure we’re on the same page let’s define closing as asking for the business. While exceptions (end of month, quarter, year) are common, my belief is that sellers are closing prematurely if buyers don’t have everything they need to make decisions. Closing too early pressures buyers. The best case is that concessions or discounting are necessary. The worst case is a loss to another vendor or to no decision.

When you think about it, issuing a proposal is a closing technique, as it should contain all the information needed to make buying decisions. In my experience, most proposals (especially those issued in multiple copies) are presented too soon. I’m especially concerned if an executive’s first exposure to a vendor is a proposal. I hope you’d agree in many cases the document isn’t fully read and an executive is likely to go toward the end to see the pricing. Absent any idea of value or a vendor’s capabilities they are likely to have sticker shock.

Ultimately proposals don’t sell, salespeople do. My suggestions:

  • Ask for the order only AFTER the buyer has everything they need
  • Try to provide proposals ONLY to Key Players that you’ve spoken to
  • Don’t expect anyone but your “coach” to read the proposal “cover-to-cover”
  • Proposals should document and confirm what has already been discussed and there should be no surprises in proposals
  • State an expiration date and enforce it. Many proposals linger in pipelines for months until they are finally acknowledges as losses. Proposals, like radioactivity, have half-lives.

I hope you agree proposals are a poor way to close. Consider trying to orchestrate a way to meet with buyers toward the end of buying cycles and review a draft of the proposal with Key Players. Certainly, getting it front of a buying committee just before they are scheduled to make decisions is a strong indicator that you are the preferred vendor.

Sales Training Workshop

Need some help to increase sales? Take a look at the sales training workshops available to get started and improve sales performance. Your Roadmap to Revenue Growth® awaits!

Topics: sales tips, selling tips, sales process, improve sales performance, sales approach, selling process, crm, sales technique, sales tip, selling technique, sales performance, closing, selling approach

Sales Tips: How to Go from the Underdog to the Favorite

Posted by Jill Perez on Jun 28, 2016 8:00:00 AM

Sales Tips: Winning Sales - How to Go from Underdog to the Favorite

By Mike Brose, Primary Intelligence

A client who has a 75% plus market share in one of the healthcare device markets had been reviewing their loss engagements over the course of a few months with their program team and me. Through a series of Discovery sessions, we identified a trend unbeknownst to the sales reps that was causing them to lose sales. At first glance, you would think price is the reason, but as we dove into the responses from the buyers, the real issue became very clear.

Initially the client thought the competition was out-pricing them. Their product was priced 15% to 30% higher than the competition, according to buyers. However, their product wasn’t really priced too high. The sales teams were too complacent with the product they sold.

The sales reps, accustomed to winning, approached their buyers with the “best and newest offering” that had features and functions the buyer didn’t need at the time.

So what was the competition offering?

UnderdogUnderdogs vs. Favorites

The competition has been looking for a way to get in the door at the hospital chains and find a way to break the dominance our client has in many healthcare systems. Knowing they are the underdog when competing against our client, the competition paid attention to what the buyer was asking for.

Buyers Have More Choices

Now our client’s competition is starting to get some traction by listening closely and understanding the specific needs of the client. If ignored, this could be a hefty loss to our client as substantial market share—including their utmost loyal clients—will soon have multiple vendors at their sites. Their competition is configuring or offering a solution that best fits the buyer’s needs even if it isn’t the “latest and the greatest” product.

Understanding Buyer Needs is Job #1

Don’t get me wrong. Innovation is important. But listening to the buyer and tailoring your product for each buyer is paramount. You need to make sure your intent is to help them get the best solution for their needs regardless if you are used to winning 75% to 80% of the time. In those deals you lose to the competition where they can get a foothold.

If the sales teams were listening and offering the best solution they could—even if it is a basic offering—they will continue to benefit from the blue ocean. Where often in the losses we are seeing there is now blood in the water. Watch out for the sharks.

Click the image below to download Sales Rehab's Episode 26 with Primary Intelligence CEO, Ken Allred as he talks with CCS® President/COO Frank Visgatis about buyer needs and what companies are doing wrong in attempting to understand losses.

Sales Rehab Podcast with Frank Visgatis

Need some help to increase sales? Take a look at the sales training workshops available to get started and improve sales performance. Your Roadmap to Revenue Growth® awaits!

Read more sales training articles for helpful sales tips and techniques from CustomerCentric Selling® - The Sales Training Company.

Topics: sales tips, selling tips, sales process, sales approach, selling process, crm, sales technique, sales tip, selling technique, selling approach, win loss, win loss reports, competitive intelligence

Sales Tips: "Trust but Verify" Opportunities

Posted by Jill Perez on Jun 22, 2016 8:00:00 AM

Sales Tips: "Trust but Verify" Opportunities

By John Holland, Chief Content Officer, CustomerCentric Selling®

sales tips for qualifying sales opportunitiesLet’s lay the cards out on the table. Sellers that are underperforming aren’t much interested in accurately forecasting what will close in the next few months. Their primary concern is keeping sales managers off their backs by showing they have adequate activity to get at or near YTD against quota. There is an inherent conflict of agendas.

Rightfully, a great deal has been made about hearing “the voice of the customer.” Within CCS® this means achieving milestones based upon buyer actions rather than seller opinions. As an example, we define a Champion as a person within an organization that will provide access to the titles a seller must call on to sell, fund and implement an offering. We show a way to request access via an email. If and when the seller indicates the buyer has agreed to provide access, the manager can then grade the opportunity at the “Champion” milestone.

While sellers can misunderstand or lie about whether or not champions have agreed to provide access, this is NOT a one-time qualification. Over the coming weeks the seller should be able to debrief the calls made on the titles that were requested. By doing so the opportunity remains at the milestone. If after a reasonable period of time no access has been granted, the opportunity either slides to the previous milestone or is removed from the pipeline.

Ronald Reagan is given credit for coining the phrase: “Trust but verify.” Taking this approach with sellers in grading pipelines can allow much better visibility into qualifying opportunities.

Social Selling podcast

Need some help to increase sales? Take a look at the sales training workshops available to get started and improve sales performance. Your Roadmap to Revenue Growth® awaits!

Topics: sales tips, selling tips, sales process, improve sales performance, sales approach, selling process, sales qualification, qualifying opportunities, sales technique, sales tip, selling technique, sales performance, selling approach, opportunity qualification

Sales Tips: Set Aside Time to Perfect Your Skills

Posted by Jill Perez on Jun 21, 2016 1:19:35 PM

Sales Tips: Make Time to Perfect Your Skills

By Gary Walker, EVP of Channel Sales & Operations, CustomerCentric Selling®

practice skillsHow many hours have you set aside this week to perfect your sales skills?

Flying home the other day, I picked up a copy of the USA Today and was reading about the NFL workouts that are currently underway. I’m talking about the rookie camps and the veteran practices that precede the start of pre-season training for the 2017 NFL season. I thought, these players are the best at what they do, professionals, experts at their positions, yet here they are, early summer, practicing! Most are recruited out of college and are paid handsomely for playing a game that most have played all of their lives. However, what dawned on me is that they don’t just sit around all ‘off-season’ doing nothing. Even during off-season they practice and stay in shape. Even before the pre-season begins, the best of the best in the NFL practice daily.  And once the season begins, they practice twice a day, for four or five days before game day. That’s right, they don’t sit around and play video games and wait for someone to yell, “Who wants to play on Sunday?” They are on it! They are continually practicing to improve their skills to be the professionals they are paid to be.

Now let me ask you a few questions:

  • How many times since attending sales training have you actually set aside the time to practice and attempt to improve your ability to execute what you learned?
  • When was the last time, in anticipation of an impending meeting with a prospect, that you sat down with your manager or a co-worker and actually practiced the conversation you wanted to have?
  • When was the last time you took the time prior to a sales call, to attempt to anticipate the questions or requests that you might receive and practice how you will respond?
  • What is the likelihood that you will be outsold by a better-prepared salesperson, a salesperson who takes the time to practice their profession?
  • How many times can you afford to be outsold by a better-prepared professional salesperson before you have to start looking for new work?
  • Is sales call preparation for you simply doing what you did the last time?
  • How many times following a loss have you looked introspectively at your skills and actions, to determine what you personally need to do better to prepare to win?

You are responsible for your own sales success. If you want to truly be a successful, professional salesperson, it is going to take practice, practice - and more practice.

mobile sales app

Need some help to increase sales? Take a look at the sales training workshops available to get started and improve sales performance. Your Roadmap to Revenue Growth® awaits!

Topics: sales tips, selling tips, sales process, improve sales performance, sales approach, sales skills, sales skills improvement, improve sales skills, selling process, sales technique, sales tip, selling technique, sales performance, selling approach

Sales Tips: Why Phone Interviews Are Effective in Collecting Customer Insights

Posted by Jill Perez on Jun 16, 2016 8:00:00 AM

Sales Tips: Why Phone Interviews Are My Favorite Method for Collecting Customer Insights

By Jessica Bledsoe, Primary Intelligence

I lead Primary Intelligence’s new Research & Development division. I was tasked with developing new solutions that allow our clients to understand and act on the insights we gather through our Win Loss and Customer Experience programs. Plus, anything else I think sounds interesting. (It’s a pretty awesome job.)

To succeed, my lifeblood is customer insights. I want to hear how they spend their days, their problems, what they like most about our services, where they want us to improve, and everything in between. I also talk to plenty of non-customers (or, to use the marketing euphemism, “potential customers”) to identify new problems we might solve.

I’ve led marketing and have worked with plenty of sales leaders, and their need for customer insights was just as urgent. In fact, there are probably few jobs in an organization that wouldn’t benefit from customer insights. We all want to understand our customer better. So, how do you do it?

I’d like to argue in favor of phone interviews, but first let me share some thoughts on two popular methods: on-site interviews and Net Promoter Score (NPS).

On-Site Interviews – The Holy Grail?On-Site Interviews – The Holy Grail?

I am pretty confident a poll of product, marketing, and sales leaders would reveal the majority of those people believe on-site interviews is the “best” method for customer insights. We instinctively understand sitting in the same room as another human is helpful to capture body language, focus, and build rapport.

I too love meeting with customers face-to-face. It breeds trust quickly. But, I’m also aware of three potential limitations with on-site interviews.

Time

Let’s get real: Who has the time to continually travel the country speaking to customers while still doing your day job? I know the popular thought is there is nothing more important than meeting with customers. It’s true.

But, I’ve also learned that everything is about balance. If 90% of my time is spent speaking with customers or traveling to and from speaking with customers, that means only 10% of my time is spent taking action on those insights. That doesn’t seem right.

Let’s say I bring it down to 50% / 50%. In a typical 50-hour work week, that leaves only 25 hours for customer insights. Most trips take 5 to 10 hours of travel time, all in all, and require staying overnight at least on one leg. In reality, I could get to maybe 2 customers a week if I really planned well. That’s a hard schedule.

Money

Besides the time cost, the actual expense of travel has to be considered. This is a balancing act as well. With virtual meetings becoming the norm and budgets under scrutiny, you have to make a strong case for a large travel budget to meet with customers. The benefits of being on-site have to significantly outweigh the cost. Which brings me to my next point…

Candor

If you’ve spent time on social media, you know distance often breeds candor. Many people are willing to be more honest in an anonymous forum than an email, and more honest in an email than a phone call, and more honest in a phone call than a face-to-face meeting. Because candor is what you need for customer insights, be wary of this potential limitation of meeting on-site: people will have a harder time being candid when they’re sitting across the table from you.

Primary Intelligence once worked with a client who really wanted on-site win loss interviews. Our consultant traveled the country to conduct video-recorded interviews. It took a month and cost the client four times more than phone interviews, but it also delivered rich insights. However, when I asked the consultant about the experience, she said it was surprising how “polite” people were when talking to her. As a third-party, we are used to blunt feedback in our phone interviews because participants have no relationship with us and know they won’t hurt our feelings. The consultant expected the same candor for the in-person meetings, but said there was something about her sitting across the table that caused some people to clam up.

B2B Vendor Success SurveyNPS Surveys – Easy, but not Actionable?

I once created a dashboard with one score on it. When I spoke to users, they told me how valuable a single score was because it would be easy for them to explain to their bosses. I asked how they would use it to take action and mostly heard silence. I worried they were favoring ease of explanation over value. I worry Net Promoter Score (NPS) does the same.

NPS emerged in the past decades as the simplest way to get the insight you needed from customers by performing a one-question survey on your website, via email, or even over the phone. The survey asks if the customer would recommend you to others. NPS is reported as an aggregate score, which means you have a single number acting as a leading indicator for customer spend and growth.

I think NPS is good. It’s easy for customers to participate, easy to implement, and easy to understand. However, as a product leader, as a marketing leader, and as a friend of many sales leaders, I can’t understand what action to take when I see an NPS score.

Customer Experience Analysis is largely about the individual customer, though you will definitely make systemic improvements to help all customers. You can’t afford to generalize your accounts, especially not your top revenue clients. I want to know if this one customer will renew or not, so a single aggregate score is not helpful.

But even if I take that one customer’s NPS rating alone, it doesn’t even point me in a direction. There is no understanding of needs, benefits, effort, or any of the areas I want to understand to know my customer better. The one benefit I see is NPS can point me to customers who are detractors so I can interview them first to understand what’s going wrong.

Tips for a quality for interviewWhy Phone Interviews are My Favorite Method

I know I’m biased – phone interviews are the core of Primary Intelligence’s data collection process – but there is a reason.

A client recently described a year-long project her company completed where their customer insights team went on-site to more than 100 customers and sat with them for multiple days to understand how they work, what their day is like, and where the client’s product was helping or hurting their process.  From those learnings, the company designed a new corporate strategy that was genuinely focused on their customers.

Our client shared the story because we had just completed a series of customer phone interviews and our findings aligned well with the major insights from the year-long project. I took some pride in knowing we had done it in a quarter of the time and likely a tenth of the cost. Clearly their on-site research was still vital, but it reaffirmed to me the quality of phone discussions.

In my experience, phone interviews often do the trick, especially when I include a web survey with quantitative questions prior to the call. Phone interviews provide the balancing act between depth of insights and effort required.

Phone calls are relatively low effort for the customer. It takes about 30 minutes of their time with little, if any, prep time needed. During the conversation, customers have the opportunity to explain their opinions and experience in depth, without the effort of writing it all out.

Phone interviews are pretty low effort on my part too. It takes a bit of time to coordinate schedules and prepare the questions I want to cover, but once I’m on the call, I just need to focus on having a good conversation. Active listening is honestly the hardest part, along with resisting the urge to offer solutions to their issues or counteract a shared opinion, but it’s a skill set you can learn.

Most importantly, a well-planned phone discussion offers a high level of detail. I can ask clarifying questions and refocus the conversation in a way that an in-depth survey wouldn’t be able to, with the added benefit of hearing voice inflection and tone.

CX Analysis Spectrum

Tips for a Quality Phone Interview

I’ll end with a few recommendations for conducting a phone discussion, based on our experience in doing more than 25,000 such interviews.

A good phone interview is:

  1. Scheduled – Set up a formal time to speak with your customers, rather than on-the-fly discussions. It ensures the discussion is not rushed and gives the customer a chance to prepare, if needed.
  2. Planned – Don’t wing it or the moment you hang up you’ll think of 10 questions you forgot to ask. Take the time to think through a set of discussion questions you can use for all customers, knowing you can add more if the conversation shifts course.
  3. Conversational – You should stay somewhat neutral to avoid leading the responses, but that doesn’t mean you have to sound like a pollster reading from a script. The more the discussion sounds like a conversation, the more candid the feedback.
  4. Both Quantitative and Qualitative – You really need both question types. A qualitative question describes the situation while a quantitative question can pinpoint exactly what the description means. (Check out this article for a closer look at qualitative versus quantitative data.)
  5. Recorded – Trust me: it’s very hard to be an active listener when you’re scribbling notes. A recorded call allows you to listen better, catch nuance, and share the recording with others so they can hear the true voice of the customer.
  6. Analyzed – Don’t leave the feedback raw; put some structure around it through analysis. What are the major themes? What will likely drive a future purchase decision? Create concise, focused insights that can be shared throughout your organization so everyone can benefit from the discussion.

Click the image below to download Sales Rehab's Episode 26 with Primary Intelligence CEO, Ken Allred as he talks with CCS® President/COO Frank Visgatis about buyer needs and what companies are doing wrong in attempting to understand losses.

Sales Rehab Podcast with Frank Visgatis

Need some help to increase sales? Take a look at the sales training workshops available to get started and improve sales performance. Your Roadmap to Revenue Growth® awaits!

Read more sales training articles for helpful sales tips and techniques from CustomerCentric Selling® - The Sales Training Company.

Topics: sales tips, selling tips, sales process, sales approach, selling process, crm, sales technique, sales tip, selling technique, selling approach, win loss, win loss reports, competitive intelligence

Sales Tips: Don't Scare Buyers into Making "No Decision"

Posted by Jill Perez on Jun 15, 2016 8:30:00 AM

Sales Tips: Don't Scare Buyers into Making "No Decision"

By John Holland, Chief Content Officer, CustomerCentric Selling®

sales tips for when to close buyersIn my B2C buying experiences, timeshare salespeople are by far the most aggressive closers. First they lure you in and make you feel beholding to them by giving what are theoretically free trips, meals, airline tickets, etc. Next come attempts to sell you on beautiful spots and then you start to think you should go on vacations more often. Finally they have private meetings with each couple and the threat that if you leave the premises they won’t honor the “special pricing” that has been offered. Ultimately they pressure you until you buy or leave.

With this as a backdrop, I ask you to realize that closing often makes people uncomfortable. There will always be risk associated with spending money in wondering if it is a good decision. Realize that when you close has a great deal to do with how much perceived risk there will be in making buying decisions.

In my mind, before a seller has earned the right to close, he/she should know that the buyer has the authority to commit. It is demeaning to ask a buyer to do something he or she isn’t empowered to do.

When in front of decision makers, there are several things buyers should know before sellers close them: 

  • The desired business outcome(s) they want to achieve
  • The reasons outcomes can’t be achieved in the buyer’s current situation
  • The specific capabilities that address the reasons
  • The potential value or payback of the offering
  • The price of the offering
  • The cost of delay (the projected monthly savings)

If buyers know all of these things, the close should be far less stressful for both parties than it otherwise would be. Some sellers may discover that if all the items above are known by decision makers, some will actually volunteer to buy.

I know there will be months or quarters where sellers have to ask for the business before buyers are fully ready to buy. Be aware you may scare some buyers into making “no decision.” The best case may be that you get the business but have to incent the buyer with a discount or concession, which means leaving money on the table.

Sales Training Workshop

Need some help to increase sales? Take a look at the sales training workshops available to get started and improve sales performance. Your Roadmap to Revenue Growth® awaits!

Topics: sales tips, selling tips, sales process, improve sales performance, sales approach, selling process, crm, sales technique, sales tip, selling technique, sales performance, selling approach

Sales Tips: Practice with a Purpose

Posted by Jill Perez on Jun 9, 2016 3:10:59 PM

Sales Tips: Practice with a Purpose

By Frank Visgatis, President & Chief Operating Officer, CustomerCentric Selling®

sales tips for practicing selling skillsAs an avid golfer, I have always believed that the key to improving is going to the range and practicing. However, until recently, I could never correlate measurable results to the significant time investment that I was making.

One day while banging balls on the range, my club pro happened by. After watching me for several minutes, he stepped in and interrupted me.

“What are you doing?” was his question.

“Golf?” I answered.

“No, what I mean is ‘why’ are you doing what you’re doing?” he clarified.

“Practicing,” I replied.

“Practicing what?” he asked.

“Nothing in particular,” I responded.

“Then you are wasting your time and probably doing more harm than good,” he informed me.

When I inquired as to what he meant, he explained to me that without a clear goal as to what I was hoping to accomplish in the practice session and a clear plan of how I was going to go about it, I was simply “going through the motions”, and if things were already wrong, I was merely making them worse.

It occurred to me that, as salespeople, we often are guilty of the same lack of discipline in our “practice” (if we practice at all).

Although we recommend at the end of every training workshop we conduct that the role-playing should continue after the training is over, my experience is that it rarely does. Salespeople tend to “practice” on live prospects rather than take the time to role-play with a manager or a peer. If they do role-play, I find it is often in a loosely structured, haphazard fashion. Both manager and salesperson are effectively “checking a box” at someone else’s direction.

The challenge I will give to all of you, salespeople and sales managers alike, is to come up with a meaningful plan of not only when you are going to practice, but HOW. And then, just do it.

Sales Training Workshop

Need some help to increase sales? Take a look at the sales training workshops available to get started and improve sales performance. Your Roadmap to Revenue Growth® awaits!

Topics: Sales Training, sales tips, selling tips, sales process, sales methodology, improve sales performance, sales training methodology, sales approach, sales training approach, sales training methodology approach, selling process, crm, sales technique, sales tip, selling technique, sales performance, selling approach

Sales Tips: Selling by Titles and Perspective

Posted by Jill Perez on Jun 8, 2016 8:00:00 AM

Sales Tips: Selling by Titles and Perspectives

By John Holland, Chief Content Officer, CustomerCentric Selling®

I encourage salespeople to gain access to all members of buying committees whenever possible. The major reason is that unless sellers get everyone’s perspective, it’s likely they haven’t identified all the potential benefit that can be realized. Each title may have different priorities and therefore different views of a seller’s offering.

sales tips for selling by titleA few years ago I worked with a company that sold temporary housing as an alternative to extended stays in hotels. They offered a monthly rate on furnished condos and one of the features they felt was important was that units had working kitchens complete with pots, pans, utensils, plates, etc. I asked why that was important and they looked mostly from the standpoint of the user (i.e. a consultant with an extended engagement that commuted to his/her home for the weekend). When asked what advantage a functioning kitchen provided they said that the consultant had:

  • An alternative to eating at a restaurant
  • Restaurant meals take a long time
  • Some people feel awkward eating alone in restaurants
  • Consultant could prepare healthier/lighter meals themselves

I then asked them to consider the advantages a functioning kitchen could provide to other titles. Ultimately they identified other benefits:

The consultant’s manager

  • Could have lower meal expenses and stay under budget
  • Higher productivity by freeing up time by not eating out
  • Less burnout as employees get tired of restaurant meals

The VP of HR

  • A potential tie breaker when recruiting new consultants
  • Lower turnover as a result of lower instances of burn out
  • Improved morale

The CFO

  • Lower expenses
    • Lower cost of meals
    • Lower attrition rates

When selling what could be perceived as a commodity, getting more perspectives can allow sellers to establish greater value and differentiate themselves from competitors.

sales training workshop

Need some help to increase sales? Take a look at the sales training workshops available to get started and improve sales performance. Your Roadmap to Revenue Growth® awaits!

Topics: Sales Training, sales tips, selling tips, sales process, sales methodology, improve sales performance, sales training methodology, sales approach, sales training approach, sales training methodology approach, selling process, crm, sales technique, sales tip, selling technique, sales performance, selling approach

Sales Tips: Is Your CX Program Driving Metrics or Revenue?

Posted by Jill Perez on Jun 6, 2016 8:00:00 AM

Sales Tips: Is Your Customer Experience Program Driving Metrics or Revenue?

By Jessica Bledsoe, Primary Intelligence

sales tips for customer experience programsSeveral years ago I had the opportunity to visit the Great Wall outside of Beijing. I was with a large group and we all climbed the first segment of the wall up to a lookout point, about 400 meters up. The steps were very narrow and steep, so most people, including me, turned around after that segment. There were a few ambitious people in the group who decided to keep going and trekked an impressive distance. Apparently, there was a lookout point further up that was breathtaking.

The group I descended with decided we needed something to commemorate the visit. My friend Troy came across a plastic medal in one of the souvenir stands. He wore it proudly and posed for a picture as we laughed about how superficial the award was. He said he was going to take it home proudly and tell everyone about the great feat he accomplished in China, leaving out the small detail about only climbing 400 meters.

Troy didn’t really care about reaching the summit, but if he had, the medal would have been exactly what it was: a plastic, meaningless metric used to approximate success while not actually representing success.

I thought about this story when recently speaking with a client about Customer Experience Analysis. The client was trying todefine key performance indicators (KPIs) for the program, but hadn’t quite defined their end goal. I’ve seen plenty of Customer Experience programs suffer from the same fate; there wasn’t a clear idea of the purpose of the program, which made success ambiguous. To quote Stephen Covey, “Management is doing things right; leadership is doing the right things.” You may receive the medal, but fail to actually drive success for your organization with the program because you’re not focused on the “right things.”

The Purpose of Customer Experience Analysis is Revenue

Customer Experience Analysis Deliver Revenue - CX 4 Pillars Revenue

Customer Experience Analysis should deliver a very clear outcome: more revenue. This happens when you help customers realize specific benefits from your solution.

I’d like to suggest the goal of a Customer Experience program is not to improve metrics like NPS, CSAT, and Customer Retention. Certainly you need to improve those as a means to the end, but those are predictive indicators of how likely you are to reach your end goal of increased revenue.

Having this bigger picture – driving toward more revenue – shapes a Customer Experience program in a very unique way. It focuses your company on understanding how your current experience is helping or hurting the top line. It resonates with executive management and gives urgency to the need to act. And it truly drives an experience that benefits customers because you are able to drive change that impacts how they are actually feeling, which they are expressing through their wallets.

A successful Customer Experience program delivers gains in four core pillars: Customer Retention, Revenue Realized, Revenue Retention, and Revenue Growth.

Customer Retention

This outcome from Customer Experience answers the question, Will we survive a contract renewal with this customer? (Even if you don’t operate with contracts or “renewals,” you still want to understand if the customer will do business with you in the future.) In addition to a simple Yes or No, your analysis should tell you why or why not.

Sample Calculation

Calculating this for a single customer is dead easy. Are they still your customer? If yes, your retention rate is 100%. If no, it’s 0%.

To determine it for a larger group of customers or accounts, the calculation is still relatively simple:

(Number of customers at the end of the year – Number of new customers acquired) / Number of customers at the beginning of the year

For example, if you start the year with 60 accounts, acquire 35 more accounts during the year, and end the year with 75 accounts, your retention rate is: (75 – 35) / 60 = 67% customer retention

customer experienceWhy does Customer Retention matter?

This is a fairly obvious answer: because customers give you money. It costs more to acquire a new customer than retain a customer and loyal customers spend more.

But here are a few surprising stats we just determined at Primary Intelligence. When we asked more than 10,000 B2B buyers how likely they would be to recommend each of the vendors they considered, 70% of the time they were more willing to recommend the winning vendor. That’s not a very surprising finding – it’s pretty intuitive that people would be more willing to recommend the product they just purchased over the products they didn’t.

What is surprising is when we asked those buyers how likely they would be to consider each vendor for future business. The winning vendors were only more likely to be considered 45% of the time. Winners and losers were both equally likely to be considered 46% of the time. (You can see more findings from this study here.)

What does this mean? In a nutshell: your product might have won the day, but the customer may walk tomorrow. You need to make the experience of being your customer rewarding or risk competition.

Revenue Realized

Revenue Realized answers the question, Are customers spending less than anticipated? For example, if Sales books a $1M contract, but you only bill/collect on $900k, that extra $100k is planned revenue you did not realize, or yield.

The cause could be the implementation, which is a fixed fee, took longer than expected so the account didn’t hit the anticipated monthly billing until, say, three months after initial projections. Or perhaps customers over anticipated their actual usage needs, so hourly billings are well under what the sales rep booked.

Sample Calculation

This calculation, again, is fairly simple.

Actual Revenue Realized in a time period / Sales Booking for the same time period

For example, if Sales booked $5M in revenue to be delivered in Quarter 1 of this year and at the end of the quarter you had only delivered $4M, the calculation is: $4M / $5M = 80% revenue realized

Why does Revenue Realized matter?

Low Revenue Realized is the silent killer of your revenue goals. For example, if Sales books a $1M deal over three months but it takes Operations six months to deliver, you still earned $1M from the customer, but your yield is only 50% because this calculation is based on time. The notion is you could have earned another $1M during that second three-month period, but were unable because you were still delivering on the first contract. If you’re a services organization, your margin is also likely hurt by the increased expenses of taking twice as long to deliver.

In fact, the real reason Revenue Realized is a killer is because it throws off other internal planning and metrics. What if you were only ever able to bill $500k in the scenario above? Now you’ve paid sales commission and allocated resources based on a much larger amount AND you have to book another deal to reach your revenue goals. Ouch.

Revenue Realized is, in my experience, often not tracked as closely as it should be because it happens in the transition from Sales (who books the revenue) and Delivery/Operations (who realizes the revenue by performing the services). There is a slip in communication, or the original booking was not realistic, or the risk was never fully accounted for.

sales revenueRevenue Retention

Revenue Retention answers the question, Are customers spending the same this year as last? Because it is tied to revenue, it is a more sophisticated version of the Customer Retention number. This is the number most investors and analysts will ask about because it reflects the actual value you were able to gain from customers in the form of revenue.

Sample Calculation

This calculation should be done on both an individual customer basis and across a group of customers. For example, you might look at the Revenue Retention of your top 100 accounts or accounts acquired in a given sales period.

(Spend from a group of customers this year) / (Spend from those same customers last year)

For example, if 15 customers collectively spent $40M in 2015 and those same customers collectively spent $38M in 2016, the calculation is: $38M / $40M = 95% revenue retention

Why does Revenue Retention matter?

If your account is slowly (or quickly) reducing how much they spend with your company each year (or any given time frame), you’ll need to replace that revenue with another customer or growth in another account, both of which are expensive activities.

Low numbers in this area point to potential larger issues with your product or customer experience. Companies will always spend money on products and services that deliver value. So, even if the customer assures you the experience has been great, if they are spending less, they are telling you about the true value of the experience with their wallets.

Revenue Expansion

Revenue Expansion answers the question, Are we identifying upsell opportunities with clients? It is a simple measurement of growth which, it probably goes without saying, all companies need to do to survive. Additionally, to bring an account in the door, companies often bring them in through low-barrier entry products. Those products often do not have high margins or sustainability. This number often represents your ability not only to drive up revenue, but also to drive up profitability in the account.

Sample Calculation

You’ll want to track this for individual accounts as well as groups of accounts. A simple calculation for an individual account is:

(Spend in current year from a customer – Spend in previous year from a customer) /  Spend in previous year from a customer

For example, if a customer spends $1M in 2015 and $1.5M in 2016, the calculation is: ($1.5M – $1M) / $1M = 50% revenue expansion

Why does Revenue Expansion matter?

When you track Revenue Expansion, you’re tracking the effectiveness of business development efforts, but additionally tracking how well your solution portfolio matches the needs of customers. If customers saw value in the first solution but are unwilling to expand into your other products, there may be a misalignment with customer needs.

Increasing this number will also increase the stickiness of your customers. The more products and services they use, the more likely you are to become embedded into their organization.

Want to read more about the latest research from Primary Intelligence? Visit https://www.primary-intel.com/industry-insights/

Click the image below to download Sales Rehab's Episode 26 with Primary Intelligence CEO, Ken Allred as he talks with CCS® President/COO Frank Visgatis about buyer needs and what companies are doing wrong in attempting to understand losses.

Sales Rehab Podcast with Frank Visgatis

Need some help to increase sales? Take a look at the sales training workshops available to get started and improve sales performance. Your Roadmap to Revenue Growth® awaits!

Read more sales training articles for helpful sales tips and techniques from CustomerCentric Selling® - The Sales Training Company.

Topics: sales tips, selling tips, sales process, sales approach, selling process, crm, sales technique, sales tip, selling technique, selling approach, customer experience, win loss, win loss reports, cx

Sales Tips: What Salespeople Can Learn from Trump

Posted by Jill Perez on Jun 2, 2016 3:26:02 PM

Sales Tips: What Salespeople Can Learn from Trump

By Marie Warner, Certified Business Partner, CustomerCentric Selling®

sales tips to be learned from The DonaldCore Sales Concepts from 'The Donald'

No matter what your political persuasion (and mine has nothing to do with this post!) there are sales lessons to be learned from ‘The Donald’ as well as from the field of candidates who have suspended their quest for the 2016 nomination. These lessons echo several “Core Concepts” integral to the CustomerCentric Selling® sales training methodology.

  1. Make yourself equal, then make yourself different – otherwise you’ll just be different. The other 16 Republican contenders for the candidacy (and many in the Republican “establishment”) spent millions of dollars and hours of air-time defining how they were "Anybody but Trump." In doing so, they not only failed to articulate their own capabilities, but also alienated the growing number of voters supporting Trump.  

    This relates to the common sales error of highlighting only how your offering is different - nothing like the competition.  If the competitor's features are part of your buyer's vision of the solution needed, you have just taken yourself out of the running - and quite likely have offended your buyer.

  2. You get delegated to the people you sound like. Trump spoke contemporaneously throughout the primaries – without the aid of teleprompters. His unpolished style and message echoed the voice of the voting public, and this billionaire businessman became “one of the people.”  

    When you are selling to the CEO, you must be able to engage in a C-level dialogue to diagnose C-level issues, and to position your capabilities to address those issues. This "solution development" conversation takes place at all levels when selling to a company, each conversation tailored to the appropriate challenges of these different buying influences.  

  3. Emotional decisions are justified by value and logic. This primary season highlights our nation’s extreme unhappiness with “business as usual” in both political parties. Votes for Beltway “outsiders” - whether Trump or Sanders - reflect this emotional decision, although voters may cite 'logic' in their decision to support either outsider candidate. 

This is certainly the most interesting presidential primary in my memory. Who knows what other lessons we'll learn through November?

Marie Warner, President of Warner Professional Sales, is a certified Objective Management Group® Consultant and a licensed Certified Business Partner for CustomerCentric Selling®. 

Sales Training Workshop

Need some help to increase sales? Take a look at the sales training workshops available to get started and improve sales performance. Your Roadmap to Revenue Growth® awaits!

Topics: Sales Training, sales tips, selling tips, sales process, sales methodology, improve sales performance, sales training methodology, sales approach, sales training approach, sales training methodology approach, selling process, crm, sales technique, sales tip, selling technique, sales performance, selling approach

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