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Sales Strategy & Management

The Lost Art of ‘Up’Selling

The good news for entrepreneurs is that upselling works.

Steven Viviers

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A recent study in the US concluded that it is 70% easier to get additional sales from existing customers than to get new customers to buy for the same value. In these tough trading conditions with customers becoming increasingly despondent, it’s reassuring to know that good old-fashioned selling can still bring results.

I worked for a major retailer several years ago that had as its main sales driver ‘selling that extra item to every customer’. This wasn’t intended as a hard sell. The retailer, a household name in South Africa, wanted to create an exciting shopping environment on the sales floor. It wanted to encourage its ‘merchants’ to interact with customers in a unique way, so that they would buy an extra product each time they shopped and keep coming back time and time again. The so-called ‘tips’ and ‘techniques’ the merchants used proved the difference between success, staying ahead of the competition, and survival.

Consider for a moment the impact of ‘selling that extra item to every customer’. The example below illustrates the potential. Assume that the average price of an item sold in a shop equals R15 and that the average number of customers in the same shop per month is approximately 2 500. It follows that the net result of selling one extra item to every customer would result in extra turnover of R37 500 per month OR a welcoming R450 000 per annum.

But can this kind of sales growth really be achieved? We think so and here’s how.

What do customers really want when they go shopping?

There are some clear reasons why customers shop at some businesses and not others. Usually it’s because they want value for money. They want to know that for every R1 spent on a product and / or service they are getting the most for their money. As small business owners your goal is to provide customers with a range of prices without necessarily going ‘head-to-head’ with the big majors.

Customers also like choice. Some large supermarkets carry product ranges in excess of 40 000. That doesn’t mean small independents should stock a large range. It does mean asking customers exactly what they want and then giving that to them.

Customers love new things; they love innovation, but if you can’t give them ‘newness’ all the time, then make sure you move what you have around, presenting it in a new light. Constant change is the key.

Nowadays customers want ‘convenience’ most of all. Everyone has heard the retail saying “there are three main things in retail success – location, location, and location.” If customers had their way they’d want your business right outside their front door. But other factors are also important, such as easy access to your business and hassle free shopping. Customers want your business open as late as possible and don’t keep them waiting in queues, in car-parks and at check-outs, and especially don’t disappoint them with empty shelves when they’ve taken the trouble to come to you in the first place.

Service and selling are contact sports

The first thing to remember is that customer service and selling are contact sports and if you don’t want to spend the time interacting with customers get out, NOW. For those who accept the challenge the rewards can be hugely satisfying.

‘Upselling’ to customers should really be a soft sell. The extra sales come through hearing the voice of your customer, knowing the business you’re in and your competitor’s business, by applying some basic shopkeeping & merchandising principles combined with some good old-fashioned selling. None of which is out of reach of small entrepreneurs that have the heart to try something new and “go the extra mile” for customers.

Entrepreneurs and small business owners can learn a lot from the giants. Deregulation in the health care sector for example has meant that independent Pharmacies found themselves competing head-on with some of the larger retail chains. Both New Clicks and PnP have their own Pharmacies in-store and the Dis-Chem Chain offers an impressive ‘one-stop-shop’. Pharmacists specifically trained to dispense medicines and sales people walking the aisles to assist and sell to customers. In response the ‘front-shop’ of the traditional pharmacy has taken on a new life and is a hive of opportunity.

Shopkeeping principles are not well understood by small business owners.

Shopkeeping principles are often not understood by small independents leading to a host of purchasing, pricing and promotion problems – the proliferation of product ranges, over and under stocks, a lack of ‘newness’ and innovation and poor merchandising disciplines.

As we’ve said already customers are demanding more and more convenience. In fact, the convenience format is the fastest growing format in the retail industry worldwide. One has only to look at the growth of garage shops in South Africa. Woolworths’ ‘Foodstops’ into Engen Convenience Centres, PnP ‘Express’ Stores into BP Service Stations are just two examples of this phenomenon in South Africa.

Furthermore independent business owners tend not to leverage their strengths. Unique strengths such as personalized service, narrow targeted ranges, assisted shopping and home deliveries.

There is only one boss: the customer

Service and selling need to exceed customers’ expectations. In the words of the late Sam Walton (the legendary businessman and entrepreneur, founder of the Wal*Mart Chain of Stores in the US), “There is only one boss: the customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.”

It all starts with a vision and selling strategy that helps to align the whole business, especially line managers with frontline staff. Then targeted strategies to address amongst other things the following‘, ‘Developing a True Customer Focus’, ‘Responding to the Market-Place, ‘Optimising the use of Selling Space’ (if you have a physical premises) and ‘Developing Measures & Tools’.

In the next few articles we will cover some of the more important strategies in detail, but what follows is a brief summary of what to expect.

Hearing the voice of your customer is the starting point

The first subject we’ll cover is ‘Developing a True Customer Focus’. One of the more common reasons businesses fail is that entrepreneurs grow complaisant over the years. They stop walking on their sales floor and talking to customers. We’ll cover topics such as identifying your customer, managing customer ‘moments-of-truth’, understanding your value-proposition, engaging with and keeping loyal customers, hiring the ‘right’ sales people and product knowledge training.

The second subject ‘Responding to the Market-Place’ will cover topics such as learning from your competition, identifying trends & benchmarking best practices, knowing your strengths / weaknesses, identifying your unique offering, planning your marketing and promotional effort (including specific promotion strategies).

The third subject ‘Optimising the use of Selling Space’ will covers topics such as the location of physical premises, street & window displays, shop layouts, ‘sweating’ merchandising space (merchandising gondolas, front-ends, shelves, dump-bins, check-outs) and the use of in-store signage and ticketing.

The final subject ‘Developing Measures & Tools’ will cover specific measurement principles / measures and a variety of tools for gathering, analyzing and presenting sales information. A key principle here is ensuring measures are tangible for staff.

Next time you go shopping at your favourite shop ask the owner / manager where their office is located. If it is ‘in the back’ you have a vital clue to their customer service approach. Make sure yours is on or close to the sales floor (preferably the tills) and that your overall approach to customer service is ‘management by walking about’.

Steven B. Viviers is a partner of Customer1st, a change management consultancy operating in Cape Town, Johannesburg and Durban. He has worked in retail most of his life with British Petroleum, Chesebrough-Ponds Co., Edgars Stores and Woolworths Ltd. He has consulted to various governmental and business organisations in South Africa, Namibia & Zimbabwe on the subject of Service Improvement. You can contact him at customer1st@iafrica.com.

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Sales Strategy & Management

Get Those Quotas Moving (Upward!) In 2018! 5 Things Your Salespeople Can Do

Fewer than half of salespeople make quota, on average. Here are some best practices for to help them hit their targets in the new year.

John Holland

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Whether they had a tremendous 2017 or a difficult one, sellers likely hit the re-set button with the start of this new year. And that button push probably was accompanied by more aggressive quotas for those sellers to achieve in 2018.

So, what should sellers do to gear up for the coming year? As 2018 gets under way, here are five things I can share to help sellers get off to a good start.

1. Avoid stale quotes and proposals

Unlike fine red wine, proposals that have been in the sales pipeline more than 45 days old aren’t getting better. Many of them, in fact, are likely to have “no decision” outcomes.

So, if you’re the seller, what’s going on? There may be instances where your prospects have chosen a competitor and not given you the bad news. My suggestion is to send a snail mail letter, “return receipt requested,” to the highest level you’ve called on within the account. State in the letter how long the proposal has been outstanding, noting that you haven’t been updated on its status and that you intend to withdraw if you don’t hear anything back.

Related: 3 Questions To Guide You To Success In 2018

The hope is that your letter will cause the buyer to contact you and say there is still interest. If that’s the case, you can ask to revisit the opportunity (help facilitate a cost vs. benefit analysis) and see if a revised recommendation can be made.

If your letter doesn’t elicit a response, you can safely remove it from your forecast. While that’s not the desired outcome, you’ll have the benefit of a more realistic view of the size and health of your pipeline.

2. Create add-on opportunities

Sellers often believe that if customers have additional needs, they’ll proactively reach out. Certainly, close rates will be higher when there is an existing relationship vs. when sellers are closing new accounts. That’s why sellers should take a look at each client and try to determine potential business needs that might be addressed through the use of their company’s offerings; they should then proactively contact the key players who might be interested.

The key to initiating add-on opportunities is taking executives from latent to active need for a company’s desired business outcomes.

3. Be realistic with nurtured leads

If the cost of your offerings exceeds $50,000, you may want to take a hard look at the entry level that nurtured leads provide. My view is that many of those leads get sellers in touch with people that are doing product evaluations. So, those people may not be working with budgets and have not identified potential areas of value/payback that can be realised through the use of your offerings.

Ask yourself if the contact you’ve been given is a potential champion who can provide you access to the key players you must call on to sell, fund and implement the offering being considered. If not, I suggest you treat the contact as a coach that may be willing to get you an introduction to a higher level that may then serve as your champion. My thought is to gain access to people who will see value in your offerings.

Related: How South Africa’s Small Businesses Plan To Invest Their Money In 2018

4. Ask for referrals

Satisfied customers can be under-used assets, especially if sellers can help them quantify results.

My preference is that sellers break down benefits and values specific to titles and outcomes that have been achieved using those sellers’ offerings.

Once quantified, sellers can ask if their customers know of any other individuals or companies they could be referred to.

5. Plan a sales cycle ahead

When I was in engineering school, I was a “just-in-time” learner in that I studiously avoided professors who assigned homework and also approached midterm and final exams with some last-minute cramming.

Some sellers follow my academic model – and that’s not smart: In terms of their year quota, many sellers who are not YTD against their numbers believe they can close enough business in the last quarter to make up for their previous gaps. But this is a very stressful strategy, and there will be times when sellers run out of runway.

An alternative I’d suggest is for sellers to break their quota into monthly increments and multiply that number by the months in an average sales cycle. They can then estimate their close rates and set pipeline thresholds they should try to exceed.

Once they’re at the stage of interviewing committee members, sellers can then negotiate their activities and time frames via a written document with buyers (I call this pipeline “E”). Here’s an example of how to project ahead:

  • A seller has a $2.4 million quota ($200,000/month).
  • Her average sales cycle is four months and her close rate is 50 percent.
  • Therefore, her “E” target is to close $800,000 or more every four-month period.
  • At any time, if she is YTD or better, her E target will be $1.6 million in her pipeline.
  • In a given month, any shortfall from YTD must be doubled and added to that $1.6 million; business development efforts must be ramped up.

Being aware of YTD performance to date and projecting the sales cycle that’s ahead on a monthly basis can reduce stress levels during Q4.

And reducing stress is good, right? I hope these tips can help make your 2018 a great, and de-stressed, year.

This article was originally posted here on Entrepreneur.com.

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Sales Strategy & Management

(Podcast) Are All Prices Negotiable?

Person, socialisation, product, place – what are the key differentiating factors between those who negotiate price and those who don’t? And who determines the value of a product?

Nicholas Haralambous

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What is up for negotiation? When should you be negotiating prices, and when should you be open to negotiating prices with your customers?

Person, socialisation, product, place – what are the key differentiating factors between those who negotiate price and those who don’t? And who determines the value of a product?

Listening time: 8 minutes

Related: (Podcast) Phone Calls Often Solve Email Problems

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Sales Strategy & Management

Sales Leadership: The New Frontier

The Leadership skill of Influencing people increasingly trumps “hard selling techniques” as people enjoy the feeling that they are forced into buying a certain product less and less.

Dirk Coetsee

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“Once upon a time only certain people were in sales. Every day, these folks sold stuff, the rest of us did stuff, and everyone was happy. One day, the world began to change. More of us started working for ourselves- and because we were entrepreneurs, suddenly we became salespeople, too. At the same time, large operations discovered that segmenting job functions did not work very well during volatile business conditions-and because of that, they began demanding elastic skills that stretched across boundaries and included a sales component.” – Daniel Pink

The transformation of sales persons to Sales Leaders is not only the essence of this article but increasingly becoming a necessity, considering the skills demand required to convince people to buy your product or service within an modern environment wherein the consumer is spoilt for choice.

Related: 3 Strategies For Closing Sales Without Picking Up The Phone

In general staples in the make up of old school sales training was and in some cases still is: Product knowledge, fielding sales calls in a friendly way yet creating urgency, learning the ability to overcome client objections and of course do not forget the all-important methods of upselling.

All those elements of selling are still important in general yet “soft skills” such as active listening, handling conflict, and above all removing the emphasis from selling a product or service to selling an enhanced lifestyle or life experience has become the new frontier for the sales game.

The Leadership skill of Influencing people increasingly trumps “hard selling techniques” as people enjoy the feeling that they are forced into buying a certain product less and less. The “parrot method” of drilling sales scripts into the salesforce of the company is slowly but surely becoming obsolete as people want to feel that they are being cared about and considered within the sales process as individuals. “Caring for the other person is the only leverage in any conversation”, Gary Vaynerchuk says.

The above theory calls for a balance between Sales Leaders whom inspires their sales teams to create a personal, professional, and vibrant environment for their customers wherein which they are highly motivated to buy, and Sales managers whom monitor the key sales metrics and checks that sales procedures are being followed. In the modern world both Sales Leadership and management are needed at each end of the balancing scale.

Still, to this day an unfortunate large proportion of sales people are like lambs put to the slaughter, within some situations, as the only weapon taught to them is product knowledge and wearing a smile and then suddenly a very unhappy customer unleashes their anger upon them, and now the poor sales person has no knowledge in terms of how to deal with conflict, generally speaking. How to cope with and overcome conflict and other negotiation skills has become paramount in sustaining very good client relations.

Ethical Leadership is also strongly put forward as a necessary component of any sales training or course through this article. Sales techniques filtered through the companies Vision, mission statement and value system to test its validity and alignment to the companies’ culture can be increasingly effective as opposed to simply applying generic methods of selling which is not always aligned to the company ethos. A high level of ethics amongst Sales Leaders can ensure that after sales promises are kept and that the product sold is in effect as good as propagated by the sales person.

Related: The 5 Best Actions You Can Take To Improve Sales Calls

When a servant leadership culture is prevalent within your company it goes a long way to ensure that your sales people create a caring and positive experience complimented by an enhanced after sales service. Servant Leadership within a sales context is to put the customers’ and teams’ purpose above the individual team members purpose and that by itself is a potential multiplier of sales performance.

A highly important factor within the context of sales performance is the sales Leaders’ ability to formulate the right questions to be asked of the client in order to create a very pleasant experience. Statements in general can be quite dangerous as it is normally viewed as final and very hard to take back once communicated. Questions on the other hand requires an answer and when posed in a caring way can quickly establish rapport with a client.

Subtle nuances picked up by the Sales Leader through asking the right questions can greatly assist in creating positive client engagement. A practical example would be to refrain from the very obvious question of:  how are you? People are so used to being asked this question that they are not likely to give you a very open and honest answer and will be likely to provide you with very generic answers such as, “Fine thank you, “Well thanks and you”, and so forth.

By very simply changing the question to: “How are you feeling today? “, the very perceptive Sales Leader can relatively easily pick up on the client’s emotional state and adjust the conversation from there in order to create rapport.

In Summary, this writing actually asks one question to all CEOs’ and/or boards that must take their companies forward towards a desired future state: Do you want sales people and managers whom are likely to maintain the status quo, or do you seek Sales Leaders whom will challenge the status quo and will always be willing to ask more of themselves in terms of increased skill levels and performance?

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