Fast-paced SMEs pride themselves on their ability to outwit and outsmart big business but the reality is, corporates continue to dominate many markets in terms of sales. How do they do it and what can you learn from it?
SMEs often believe they can innovate, respond quicker and offer personal service that the bureaucratic and slow-moving corporate can’t match. Whilst this belief has sometimes been valid, the majority of big businesses continue to grow fast, retain key accounts, maintain market shares, and occupy new segments that SMEs have developed, but the majors succeed in dominating.
So how do they do it? What continues to make them successful in the battle to win and keep customers? In a 20-year selling career that has spanned private start-ups to major multinational corporations, I have observed five key reasons why, and how, big business succeeds in selling.
1. Strong sales culture
2. Reward and recognition
3. Thirst for improvement
4. The value of process
5. Systems create value
Strong sales culture
Big businesses which sell well embrace a sales culture. It is evident from the leadership that winning and keeping customers is important. Sales is not a “function” or a department with CARE (Customers Are Really Everything) signs. Leaders in these businesses make it their business to keep in touch with customers, to personally engage on the big deals, and to assist the salespeople with practical insights or support. As a result, big business often have the edge over SMEs by having invested in multi-level relationships with a client over a long time. The value of this can be as simple as a phone call to suggest an account is at risk, or to smooth over a service failure, and even a nudge that a pencil should be sharpened on pricing.
Best practice sales organisations recognise that the role of the organisation is to support the sale. As a result there is a high level of alignment with marketing, and a genuine lack of “us” and “them” between sales and other functions.
Reward and recognition
Yes, big business pays well. In fact they often set out to reward to a specific level against salary benchmarks. But importantly, they are also open to significant incentives. A transaction or period bonus could often propel sales staff earning levels over their bosses, and provided the incentive scheme is skilfully structured and administered, leaders respect rather than begrudge these payments.
Progressive companies are sensitive to creating “superstars,” however they also build significant non-monetary rewards for sales excellence. This could include annual or monthly recognition. In addition, companies may willingly invest in building non-sales skills such as marketing or management training, or providing opportunities for travel, or career extension to enhance retention of key sales talent.
Thirst for best practice
Best practice big businesses never convince themselves that things are going as well as they possibly could; they strive for improvement and change. It starts with recognising the value of training their sales team. Induction and product training are substantial, as is the provision of relevant sales skills training for strategic selling, account management or negotiation.
Sales management in these companies will engage and listen to reputable sales consultants and trainers. Many Fortune 500-size businesses will join the Sales Executive Council providing up-to-date research and best practices which are shared amongst members.
Big business will invest in engaging consultants and/or attending seminars to access latest thinking and sharing best practice. In fact, major global big businesses invest in sales learning centres that deliver front line training for sales professionals and become a focal point for spotting trends and absorbing new thinking.
Value of process
Big business doesn’t rely on luck for a good year, and they minimise the risk of relying on a “rainmaker” sales superstar. Instead they view the selling function as a process, and investigate and determine the best sales methodology that applies to their business.
They invest in planning, developing strategies, tactics and scenarios, prior to committing scarce selling resources. Plans are prepared to either a segment or account level, and when the plan is created, the best practice big businesses work the plan. Effective plans are living plans, not “snap frozen” and placed on a shelf. Plans need to live and adapt and update with changes in the customer, the business, the market and actions of competitors.
Big business can often be ruthless in applying segmentation to their marketing and sales effort because they know their efforts will be rewarded, and that not all customers are created equal. Sophisticated big business will align their sales and customer service efforts not only around the lifetime value of customers, but on their behavioural and buying preferences. A simple example of this is serving some customers by email/phone and allocating field executives where relationships are preferred (and valued!).
Systems create value
Whilst more has been promised in the past many years for CRM (customer relationship management) and ERP (enterprise resource planning) systems, high-performing big businesses utilise systems and turn technology into advantage. It goes beyond “one view of the customer” (a vision still beyond many major companies and SMEs) but includes accurate, transparent and real-time performance reporting and pipeline management.
Mature and affordable technology is available to automate and integrate sales processes. Best practice includes easy fulfilment of collateral, preparation of quotes and proposals and delivery of tailored presentations for both face-to-face and remote delivery. Most importantly, technology providers or partners to successful sales businesses see themselves as enablers and are distinguished by a culture of service and innovation.
So, what can you do about it?
The good news is that each of these ‘secrets’ can be addressed by you. SMEs do not necessarily have to spend more to tap into the secrets that make big business sell so well.
Perhaps the answers became evident to you as you read this article. The first secret is culture, and exceptional cultures can exist in the smallest start-up, and rarely in the multinational. So start with culture. At Sales Positive we say “the bottom line starts at the top” and a strong sales culture is a reflection of strong leadership.
It is not just about how much money you spend. For example, with reward and recognition you can simply take the time to honour the efforts of sales excellence, and consider freeing up some more of the upside in profitable transactions as bonus. For a start, this approach is self-funding, and your margin returns actually increase when you have a well crafted incentive scheme that measures and rewards the correct outcomes.
Infinite resources for best practice knowledge exist on the internet, however the quality and relevance may be limited. A great way to update yourself on best practice and trends is to ask. Take up the offer from a sales consultant to share what is going on in the profession. Speak to the big business sales representatives that call on your business, and ask them what they have learnt from their company that makes them successful in sales.
Processs is about discipline and effort in defining the right process in the first place. Best practice is the courage to challenge a process and find improvements. Again, there are excellent business process re-engineering consultants that can provide advice, and bid to assist you with this process. The investment will require a business case but can be demonstrated to create value.
With technology you should seek simplicity, not complexity in a solution. Best practice reporting can be as simple as transparent daily actual versus budget reporting, at a gross margin level, by rep, area and/or product line from a system that provides a single view of the customer. It does not sound like a lot to ask, yet many organisations, big and small, fail to deliver on such a basic requirement.
The good news is that Web 2.0 technologies are significantly mature and cost-effective, removing the cost barrier that previously restrained SME from using the internet as a source of competitive advantage.
The competitive advantage of SMEs often arises from their ability to innovate, move faster and offer personal service to their clients. And yet big business continues to dominate markets and secure growth. The 5 Secrets of How Big Business Sells Well illustrates common themes for big business best practice. As knowledge is power, you have the ability within your organisation, no matter how small, to learn from the best and to achieve sustainable profitable growth from your investment in the selling function of winning and keeping customers.
-John Huggart is managing director of Sales Positive (www.salespositive.com.au). Founded in 2007, the company has a simple and clear mission: to help companies profit from sales, and achieve growth.