Today’s post is by Meghan Steiner, Director of Marketing at Richardson Sales Training. Meghan manages all demand generation and sales enablement efforts within the organization with the goal of creating new business opportunities.
We recently published the Richardson 2016 Selling Challenges Study, based on responses from over 400 sales professionals. Here are three major highlights from the study.
Hurdles to Closing Deals
Survey question: In 2016, which of the following will be your most difficult challenge in closing a deal?
Results: An overwhelming 48% of respondents felt that competing against a low-cost provider was the toughest obstacle.
Analysis: When a prospect is focused solely on the sticker price of your offering, it’s often a sign they view your service as a commodity. One way sales teams can counter this thinking is to know the prospect’s business backwards and forwards. In a Forrester report, it was discovered that 73% of buyers do not believe salespeople are knowledgeable about the buyer’s business. If you are a knowledgeable seller, you become less of a price tag and more of a value-added partner.
Survey question: Which of the following do you believe will be your toughest negotiation challenge?
Results: The leading response (from 29.2% of respondents) was “gaining higher prices.”
Analysis: If some clients are fixated on lowest price, then your selling strategy must use value as the counter argument to preserve pricing structures and margins. While most business partners are reasonable, there are those that will want something for nothing (or close to it). It's these "tough sells" that need to be taught the value of value, and shown how price does not translate to quality.
Survey question: In 2016, which of the following will be the most difficult to deal with in terms of managing an account?
- Finding ways to add relevant value for various stakeholders
- Balancing sales and relationship management
- Addressing problems and complaints
Results: Of the three responses listed above, more than 27% of respondents felt that finding ways to add relevant value for various stakeholders was the most important concern.
Analysis: Based on this and the two preceding survey questions, it’s clear that sales professionals are concerned with combatting low pricing with added value and how to work with clients who only see dollar signs as the primary closing prerequisite.
How to Improve Negotiations and Sales Conversations
What can sales teams do to improve negotiations and sales conversations to overcome these common challenges? Here are two recommendations.
1) Involve Key Stakeholders Early
Richardson has noticed a trend of procurement and financial stakeholders entering the sales conversation in the final stages. These folks tend to look past all the emotion of the sale and stare right at the dollar signs. The sooner your sales team can involve key stakeholders in the sales conversation, the better.
2) Expand Current Client Relationships
A Bain & Company survey found that it costs six-to-seven times more to acquire new clients than to retain an existing one. Richardson has noticed a trend in more sales people migrating from solely a sales role into a hybrid of sales and account management. Positioning your sales people in a role where they can add value to current clients on a recurring basis means better retention and opportunities for cross-selling and up-selling. Start asking yourself, what can provide your team with information on prospects and make them stand out on sales calls and in day to day client management?
Richardson’s study presents important data straight from the sales professional’s perspective on what challenges the coming year holds. Though the solutions will ultimately be your own, it is reassuring to know that obstacles such as low pricing and creating value are not unique to your own market niche, but are endemic to the entire sales industry.
Download the entire report here.