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The Challenge of Selling to a Buying Center

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To effectively manage a sales cycle, the salesperson must understand and mirror the buying process. This process can be broken down into the three phases: recognition of need, evaluation of solutions, and negotiation. A well-managed sales cycle will follow these phases by uncovering customer’s needs (Probing), demonstrating superior solution (Proving), and removing barriers to getting the order (Closing).

But what does this mean to the sales person? Uncover who´s need to? Convince whom? Who actually is the customer –  the company, an individual or a group? What does this mean for the sales cycle?

Industrial buying decisions, in contrast to consumer purchases, are generally taken by several individuals, the so called buying center. The sales person is faced with two challenges: The composition of the buying center and the dynamics of the decision making process within it.

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Full-Service CRM: Completing the CRM Cycle

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While many companies still struggle with implementing even the most basic CRM solutions, others have moved a big step forward by including their service organization and letting it share customer information with marketing and sales. Service contributes to a company’s success in many ways, and understanding this contribution makes the performance impact of an integrated CRM solution obvious and significant.

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Your CRM Solution – Great Dashboard and Poor Results

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Imagine someone is buying a car simply based on the quality of the dashboard instrumentation. The speedometer is more accurate than an average car, there is a wonderful navigation system that provides the driver with details of their journey, and a number of additional instruments displaying the engine condition. All of this is nicely presented with an attractive design and interface. Now this person takes out the new car for their first ride and it turns out that the car performs poorly. The acceleration is too low to keep up with the traffic. The fuel economy, combined with a small fuel tank, forces the driver to make frequent stops costing valuable time. The exclusive focus on the dashboard led to the purchase of a car with low performance superbly displayed on a fancy dashboard.

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Why CRM Fails: Inflation!

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The introduction of a customer relationship management system has the potential to highly improve the productivity of the sales and marketing teams through better access to information and streamlined processes. Nevertheless, according to various studies, between 50% and 70% of CRM system introductions fail to fulfill these expectations. This may partially be attributed to the systems themselves, but to a greater extent, the problem lies in the implementation process.

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Sell On Value, But Which Value?

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Selling on price seems like the easy way out in sales. If you have no other arguments, just drop the price until you get the order. But unless the ability to produce at lower cost than anybody else is the company’s primary strength, this behavior doesn’t lead to long-term success. Instead, it will cause unnecessary price wars and probably economical failure sooner or later. This is why more and more companies tell their sales people to sell on value and not on price.

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How Margins Go Over the Price Waterfall

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Price Waterfall

The complexity and length of sales cycles in the B2B business carry a big risk — the uncontrolled erosion of profit margins. Between the list price and the final pocket price, a large gap can develop leading to a significantly reduced margin. The problem is that the loss of margin is not only the result of the final negotiation in the closing phase, it is composed of various, often minor, concessions made over a longer period of time. This is why it is generally called the “price waterfall.” The actual price waterfall models vary with industries and reflect the different effects contributing to the loss of margin, but their principle is the same.

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Sales Are UP! Why Don’t I Feel Better?

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Technical Difficulties

Ed. Technical difficulties! OMG, we’ve had technical difficulties! Fortunately we have enough interesting and compelling content here at The HUB that we can dig into our archive and still offer up something that you should find, well, interesting and compelling. I’ve gone back to the early days, our 3rd week of publication, in fact, to pull up an article that you may have missed from then. Enjoy it. Meanwhile, I’ll get back to whipping those tech types to solve our difficulties.

Sales are picking up. Wonderful! We really feel good.

But is it because our sales team is doing an excellent job, or is it because the market is booming? The same applies to the other way round. Sales are down, is it us or them? Although it is so vital to our success we often do not know the real truth, and if we find out, it is very late – too late for taking the right actions early enough for meeting our targets.

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The Impact of the Sales Team On Pricing

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Dollar People

Sales volume is a prerequisite for making profit, but it is not a guarantee of it. Of course there can be no profit without sales, but there can be sales without profit. Without the right price, a company may be very successful in terms of sales volume, but may actually lose money – or at least not get the money it deserves. Price has the most direct effect on profit. Every percentage point of a price change will directly end up in the bottom line. It is therefore worthwhile taking a closer look at this aspect of sales.

Pricing involves a lot more than creating price lists and defining discounting policies. Eventually pricing decisions must be implemented, and this, in most of the B2B companies, falls under the responsibility of the sales force. The sales people have an impact on the actually realized prices in several ways:

  • First of all, it is on them to discover the customer’s needs in order to be able to offer the right product or service (probe skills).
  • Secondly they have to convince the customer about the value of the offered solution (prove skills).
  • And last but not least, it depends on their closing skills to negotiate and defend the price.

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Inside Sales – A Productivity Engine

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The field sales force is an extremely valuable resource for every company in the B2B business. It has a strong effect on sales success, it is usually a scarce resource, and it is cost intensive.  No question that everything must be done to maximize the effectiveness and the efficiency of this resource.

One contributor to the effectiveness and efficiency of the field sales force is the internal sales force. Its role is becoming increasingly important. This is to a great extent attributable to the availability of modern IT technology, which strongly contributes to its effectiveness and efficiency.

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