With the uncertainty that lies ahead, I’m sure many of you have been feeling what I’ve been feeling — a desire to re-evaluate your spending habits. Pants? Who needs ‘em. People can only see the top half of me on Zoom calls anyway! New sneakers? Nope, I’ll just stick to house slippers. Better to invest in an ergonomic chair for my in-home office space (i.e. my kitchen).
As businesses are forced to make difficult decisions and CFOs become increasingly involved in budget conversations, managers are reviewing line items and asking themselves, “Do I really need that? What’s the cost-benefit of this service for my business?” The implication is that sales reps are having to work much harder to secure new business or to renew previously dependable ones who brought in recurring revenue.
One way to keep sales and revenue steady is sheer force; you can incentivize your sales reps to increase their top-of-the-funnel efforts. Or, you can equip them with new ways to be more effective later in the funnel. Even if sales reps think they are at the top of their game, we feel that it’s always helpful to do a refresher on how reps can be more effective in their craft. Here are a few tips that you and your sales reps may be able to leverage as we kick off the last quarter of what has been a very dramatic year.
The first tip that we have is from a psychology study that was published in 2005:
Two professors from Northwestern University, Victoria Husted Medvec and Adam D. Galinsky, found that when a software company leveraged Multiple Equivalent Simultaneous Offers (MESOs) when negotiating contracts, profits rose. What does that mean in plain English?
Multiple Equivalent Simultaneous Offers simply means that when you present a customer with multiple equivalent offers, they are more likely to sign at least one. In the Northwestern study, a software company presented three equivalent software packages to its clients: for example, a $1 million package with payment in 30 days, the same software for $1.5 million with payment in 120 days, or an enhanced package for $1.35 million with a 30-day payment. The study showed that profits rose as a result of this tactic because MESOs the sales rep and the customer flexibility to craft a solution that works for everyone.
If you’re a SaaS company or a company where marginal costs are negligible, you may want to consider giving your reps the flexibility to craft multiple offerings such that customers are able to consider custom pricing options.
Are your sales reps actively listening to the customers and industries that they are covering? What are their customers tweeting about, blogging about, podcasting about? What product pivots have they made for themselves? Encourage your sales reps to practice active listening with their clients to piece together clues about what challenges might be plaguing their team lately. What aspects of your product worked well for your client this past year? What didn’t work as expected? How can the new contract improve the status quo? Remind your team that active listening consumes time and energy, but will allow them to craft more suitable solutions for customers.
It can be extremely challenging for an ambitious sales rep to temper their desire to seize the reins during a sales pitch. However, your customers may be much more honest about their needs and their ability to retain your services if you simply ask: “How would you like to proceed with us? How do you think we can continue this partnership?”
Let the buyer lead you to the close; be their partner in finding a collaborative solution.
According to McKinsey & Co. about 50% of B2B buyers are holding off on purchases because of the pandemic. Sales teams are faced with a seemingly insurmountable challenge, so it is more important than ever to equip our sales teams with tools for success.