The New Strategic Selling is the single best book on sales I have ever read; it lays out a process that for sales management is intelligent, customer solution focused, and analytical. I have employed these principals personally and have had one of my companies standardize on the methodology. It is highly effective in developing a common language for prospects, resource allocation, marketing investments and growth expectations.
If you are sales oriented and know Miller/Heiman you may find some of my applications below of interest. The real benefit is not sales process but sales management improvement and the ability to get to key decision makers effectively. If you have a non-sales background, this book is critical since it will give you a punch list of questions to ask your sales managers to gauge the quality of a pipeline. It will also help you understand the resources you need to provide to help get to the economic buyers in your customer base. Just like you innovated your product, you need to innovate how to get people to listen and provide solid feedback on their needs, be it through purchases or by vocalizing unaddressed pain points.
Why should you listen to Miller/Heiman? These guys have provided sales consulting for hundreds of top Fortune 500 corporations. The book was first written in 1985 and updated/rewritten in 2005 as The New Strategic Selling, and this stuff works. Sure there are new things to consider in selling and I will cover some of these in upcoming books but the program and principals here are as sound as they were when they were introduced.
The Authors’ Big Ideas:
- Complex Sales = Multiple Constituents:Break down executives at prospect companies into four groups of buying influencers. Each has a different frame work/ agenda to be understood and mapped out: the Economic buyer (the key decision maker), Technical buyer, User buyer and your Coach. The goal of the process is to identify how each one views your proposal on a scale of +5 to -5. Anyone you haven’t spoken with or that is negative gets a red flag. You want to manage down your red flags and find proposal alternatives that yield positive views. Where you can’t you have a risk. Miller/Heiman offers a specific process – “blue sheets” to quantify these points, track progress, assess risks and allocate time.
- Buyer Attitudes: Each buyer influencer falls into 4 modes regarding the problem you are solving. They won’t buy if they don’t see a problem. Do their perceived desired results match the expected results based on their current course? If so, they are not good candidates to buy – they are in ‘Even Keel’ or mode 1. It’s important to note that it doesn’t matter whether they really are on track or not, just that they think they are on track. If there is real problem ahead but they don’t perceive it – ‘Over Confident’ mode 2 – they aren’t going to buy. A lot of sales time (entrepreneurial capital) is wasted in the category. The people worth investing time in are in ‘Growth’ mode 3, – they see an opportunity and know they are not on track to achieve it or ‘Trouble’ mode 4, – they don’t see themselves maintaining current results. Trouble mode prospects tend to be the best since you can potentially help them address a fear of losing what they have versus growth mode prospects where you are addressing their greed for a gain. Fear tends to be a better motivator than greed.
- Concept Selling : One of the most powerful concepts in the book. Your organization should be able to get to the economic buyer. The key is information – specifically providing access to information that solves their organization’s problems/goals. This isn’t feature/benefits; it about addressing their strategic concerns of problems they have and are trying to solve. This concept is similar to Habit 6 in the 7 Habits. This can be developed by your organization, (good idea to really know your customer intimately), by a guru that you bring to the table or by peers – pulling together a community of peers to share/address best practices. If you are committed to success do all three! This is a key tool for entrepreneurs!
- Win Results: In managing a sales process, your executives need to focus on personal wins for each buyer in an account. These are intangible and not quantifiable. Getting your execs to focus on finding these and addressing them starts lining up your company to meeting personal needs versus filling a procurement requirement and changes the game. This is Habit 6 again. Similarly, you need to get a Win deal if your meet their needs. This is often price but also address non -price needs: product feedback/input, length of commitment, time investment for success and reference-ability.
- Ideal Customer (I love this!) Great companies don’t look at every sale the same, they profile the ideal customer for a solution. It’s not just about a product/price fit but whether the organizations share similar values. We can’t always be choosy but doing the right work up front on where to spend time is often the best investment you can make.
- Sales Funnel Management– The key asset in a sales organization is time. Each $100,000 dollars an entrepreneur invests in sales buys them a fixed amount of time based sales capacity, x hours in a year. Sales management is really about managing those hours: where they should be allocated to maximize effectiveness. The funnel is the road map: prospects at the top need light touch and regular tending or you will go from feast to famine. More investment goes to the smaller list in the middle of the funnel while those at the bottom need maximum effort to secure your fair share of wins. The Miller/Heiman approach load balances time across all three areas to assure an even flow of output with predictable results. Their time allocation model is effective though I have some additional suggestions below.
How to Apply This Book:
I have been applying these principles as an entrepreneur in my companies for over 20 years so it’s great to be able to share some of my experiences. Here are some insights on applying the lessons in this book:
1) Concept Sale: The best advice in the book and the most useful exercise in strategic selling. In a prior business, I was successful in helping entrepreneurs sell their companies for very high prices. One of the free services I offered was to create a market map of all the buyers in a narrow market segment (say web based applications) and all the innovative, emerging companies. This was based on extensive face to face interviews. Rather than keep this information to ourselves, we published the confidential information with our market predictions to everyone that mattered. With this we got input to refine our understanding on where everyone’s interests stood. When it came time to help an entrepreneur, we could save them time by connecting them only with those most interested that would pay the best price. Yes many people did deals with this information without our help. No problem – that was our gift – we did great for/with those that hired us.
2) Customer profiling: The second point is that resource allocation on timing is where the art of a successful organization lies. As an entrepreneur who values every dollar, and whose vision success is at stake, it’s difficult to delegate the resource allocation decisions to your vP of sales and even worse, to individual sales execs. So I recommend, after arming with the tool of the concept sell, to develop a well qualified list of your best prospect profile. There is so much information available now this can be done before anyone needs to pick up the phone. Get a data analyst for sales ops, develop deep success profiles and prioritize on prospects for which you are best positioned to solve problems. Imagine the perfect set of data to pinpoint your efforts – it exits, just get it (See SuperCrunchers). If you don’t know who that is then you need to learn, perhaps through trial and error, and this needs to involved direct access by the entrepreneur on key prospects/accounts to gain insight on the solution/problem fit. The best selling is done before calls are made when you have set up your sales executives to succeed.
3) Dynamic To Do Lists– A challenge I have always had is how to prioritize your sales time to optimize results (what do I do next?). One of the tools I have developed an found helpful is the ability to take a pipeline and define a probably of success and expected value for prospects in each stage ( this is standard if you have gone through a rigorous process like Miller/Heiman though there are many others. What I found helpful, and is unique is my dynamic ordering process: calculate the expected value of each prospect given their stage, and subtract it from the expected value if they moved to the next stage. This is my Pipeline Expected Gain or PEG for each of my prospect to dos and now it helps me prioritize my time (FYI – this is not in the book but in line with the thinking). Now you can prioritize your day, week or months to maximize PEG gains. You may need to tweak the values a bit to make sure your reflect likelihood of success at each stage but a good pipeline handicap should be fairly close. The nice thing about this approach is that it is a dynamic pointer to the most productive use of your most scarce and valuable resource: your time. I haven’t employed dynamic lists across an entire sales force but I would expect this to be effective in optimizing team resource allocation as well.
If these techniques seem interesting and you would like to apply them to your organization, you should hire a sales process consultant to develop a structured approach to help you manage sales. Sales management is a science not an art and if it’s not your “thing” you can learn it: sales management acumen is a critical skill and avoidance/delegation is not an option. The key is to develop a framework like the one above and begin iterating on identifying performance gaps/bottlenecks and resolving them.
Authors : Robert B. Miller and Stephen E. Heiman
Who should read it: CEOs, Company Founders, Entrepreneurs, VP Sales, Sales Execs
Javier Rojas is a managing director at Kennet Partners, a private equity firm that invests in growth companies in Europe and North America. He has been reviewing the best business books for awhile, posting summaries of the authors’ big ideas on his blog and also monthly on Entrepreneur Corner at VentureBeat.