Sales Intelligentsia

The 5 Whys

Toyota has a reputation for constant innovation that is almost unbelievable. Their employees generate millions of incremental improvements because everyone is encouraged to constantly fine-tune their own work processes.

One mantra that comes out of this culture of innovation is something called 5 Whys. Essentially it says that when you are faced with a problem you ask a why, wait for a response, ask another, etc., until you’ve asked at least 5 whys. In other words keep digging until you get to a root problem you can solve that cascades a solution upwards to the original problem.

There is a strong corollary in the sales process that this applies to: Qualification. When you are qualifying a prospect you aren’t just trying to determine if they are a viable customer (can approve purchase, can approve payment), you are qualifying to uncover every objection imaginable so you can address them in your presentation. So you qualify by asking questions (whys) until you run out of questions. Then you take each response (objection, challenge, problem, etc.) and address them, working your cascade back to the original issue and answering it.

The nice thing about this approach is that it takes the mystery out of closing. As you’ll discover from this blog as it evolves I hate the term ‘closers’, as in ‘closers wanted’. Closing is easy and a natural next step if you do your qualifying. Suppose you identify three issues the customer has concerns about:

• Price
• Quality
• Speed

You explain the value you offer in terms that mean something to them, i.e. what’s in it for me; you explain how your quality standards mean they will save money through less downtime and you explain how you’re going to deliver and install in X days using your proprietary process. Then you shut up…

A few minutes pass and someone, hopefully not you, breaks the silence. If it’s them, you just uncovered another issue (objection) or they say yes (closed!). If it’s you, you say ‘If I can get it for the price you want, guarantee the quality and have it installed in X days, are you ready to go ahead with this?’

This is the Trial Close question. Its sole purpose is to uncover any hidden objections. If they say no, move to wrap it up (close). If they say, ‘I have to run it by my boss’, then you blew it in the qualification process- you didn’t ask whys until you discovered that the buck doesn’t stop with your guy. Back to the drawing board, this time with the boss.

Ask the whys until it feels like you’re ready to present. You can’t close until you do it right.

How Online Lead Generation Works and How To Optimize It

The union of sales and marketing is sometimes a tumultuous one. Marketing works to build brand awareness which, in turn, should make it easier to get in the door for the sales team. Marketing also does the first step in the sales cycle when they build an effective lead generation process, one that generates qualified, motivated leads. Unfortunately, all too often the hand-off of those leads from marketing to sales is bungled and the cost of that bungling is very high.

When we plan an online lead gen program for a client, it’s our preference to be compensated on a per lead basis. The typical situation has the client paying an initial upfront set-up fee which is reimbursed in the form of a number of leads that offset that cost. After the set-up fee is recouped, each lead is purchased by the client and that purchase price is their only financial exposure going forward. For this to work for both parties there are a number of issues to consider:

• Both parties must agree on exactly what constitutes a ‘qualified lead’. This is critical because you cannot in hindsight devalue a lead because of closing ratio, etc. There is a hard hand-off from the marketing group to the sales group and the criteria you agree on determines when that hand-off takes place. If we mutually determine that a lead is a fully-completed online form requesting literature (for example) then the client agrees to pay for that lead, regardless of their future success in closing it. That’s step one.
• The reason for step one is that I, as the marketer, have no control over what the sales group does with that lead. So step two is an understanding that before we start a lead gen program, the sales group is prepared to act upon those leads while they are fresh. This means a good functional CRM system for tracking the lead, a timing system that ensures it is acted upon ASAP because leads are perishable fruit, many declining in value by the minute, and real time feedback to the marketing team regarding which leads are good and which are not so they can fine-tune their processes.

Even if all of your marketing is done in-house, I’d recommend considering building a relationship between marketing and sales that works like the one described above. Sales should have a budget for ‘buying’ leads from marketing and marketing should set their ‘price’ for those leads based on what it costs them to generate the lead and how much a highly qualified lead is worth to sales. i.e., a market value. Why?

Let’s look at an example. A reverse mortgage company hires an ad agency to develop an advertising program designed to generate leads. They produce a video that is offered for free both online and on TV for anyone who completes a form or calls a number to request the video. A completed form or phone request is a lead. The agency, being traditionalists, don’t want to be comped per lead, they want their hourly production rate. This is bad because no one is forced to justify their costs on a per lead basis.

In this scenario, I come in and ask the client how much they are paying for the lead vs. what it is actually worth to them. The inefficiencies of the agency model mean the leads are costing $100/each (these are round numbers) because of very high production and media costs. The target price, based on ROI, should be closer to $40/each. If the marketers are being compensated based on performance they will have to choose the most efficient medium rather than that which they are comfortable with. In fairness to both sides, the true price of a good lead may be higher- testing is needed to determine that.

No matter how much you pay for a lead, if sales doesn’t have a very strong process for responding to that lead it quickly becomes worthless. My brother, when he owned a high-end kitchen business, told me that the number one reason he beat others in a competitive bidding situation was the speed of his response, not his price. Knowing this he made certain that every inquiry got addressed ASAP.

These days, customers expect a fast response, often in minutes. There is no excuse in a real time online world to not have someone in sales, even an admin, not make a call or send an email as soon as a lead appears. Very often this will mean an appointment on the spot, greatly enhancing the value of that lead.

If you’re interested in an analysis of your lead generation program or the creation of one, we can be reached via the Supernatural Agency corporate site.

Welcome to Sales Intelligentsia, everything successful in sales management

We’ve been involved in selling in one form or another for over twenty years, including everything from car sales to major technology sales, sales management and even writing sales books and training materials. We designed comp plans, recruited sales teams, made those cold calls and closed the deal over and over again. Sales Intelligentsia is about intelligent selling- no hammering, no pushing, no dirty tricks; just successful selling that builds your career, grows your business and improves the lives of your customers.

This blog is for business owners (you have to be a superlative seller to succeed in your own business, no exceptions), beginning salespeople, sales managers, experienced old hands looking for a little edge sharpening and even marketing people- because if you don’t generate leads, your sales team can’t bring in the business.

We’re going to review books, sales systems, sites and training programs (if you have one Contact us for a review), we’re going to tell stories, offer tips and shortcuts, help with elevator speeches and scripts, deal out some motivation and talk about money and comp planning. In short, everything related to sales of all kinds.

Stay tuned, we’re going to be giving you something new every day.