What is meant by this wasn’t crystal clear to me the first time I heard it, so I’ll give you an example.  Let’s say you are shopping for a new car.  If you were buying your new car purely for logical reasons, you would get the car with the best combination of:

• Price
• Gas mileage
• Safety
• Maintenance costs

And maybe a few other factors – all very logical.  If everyone made their decision this way, we’d all be driving a Hyundai.  But we aren’t.  Why not?

The answer is that people don’t buy for logical reasons; they buy for emotional reasons.

You may want a Mercedes because you want to be associated with “the best”, or a BMW because you want to look hip and sexy, or a big truck because “real men drive trucks”.  These are all emotional reasons, and they are the primary drivers of purchasing decisions.

Once you’ve made your decision, you justify it with logical reasons.  “Well, it’s ok for me to pay $25,000 extra for the Mercedes because it’s so safe and has a great resell value.”

I hope the example helps clarify.

What does this have to do with selling managed services?  Everything.

If you want to sell your services as quickly and at the highest prices possible, you need to get your prospect emotionally connected to their problem and your solution.  If you don’t do this, you will miss out on many sales opportunities, and/or miss out on selling at as high of prices as you could have.

To get them connected emotionally, you need to take them down a path of questions that intensify their emotions by making their problems more personal. A conversation may go something like this:

Mr. Prospect, what problem are you hoping to solve by hiring us?

Well, we’ve been having some challenges with X, Y and Z.

I see, and what is the impact of X, Y, and Z on your business?

Answer.

And how much is that costing you?

Answer.

What else is it costing you?  Time, frustration, disgruntled employee, delays hitting your goals?

Answer.

If you don’t solve this problem, what do you think that will mean for your business?

Answer.

And what will that mean to you personally?

Answer.

Is that ok to you?

As you can see, the questions start to get more personal in nature, and force the prospect to really consider the impact of their problem.  Your goal is to get them so worked up about their problem that they can’t stand to go another day without getting a solution – your solution!

As I stated in my last post, asking good questions takes practice!  If you were to try this line of questioning without having practiced it several times, it’s going to come across as forced and invasive.

ROLE PLAY!

Spend time learning how to use this line of questions to uncover and magnify the prospect’s pain, and you’ll win many more deals.

MRC

PS – we cover sales techniques in our membership site, MSP Coach.

Some salespeople always seem to leave their appointments with signed paperwork in hand.   Others seem to always have a reason for not getting signed paperwork.

What’s the difference between these two types of people, and how can you learn from them?

I heard a quote from a representative of Basho, a sales training and software company based out of Boston, that so perfectly answered this question for me that I had to share it with everyone:

A great closer is willing to put the prospect into a situation of temporary discomfort in order to close the deal.

That’s exactly it.  That sums up the great closers from the average ones.  If you are a Sales Manager, put that quote on your list of “keepers” to share with your sales team.  Look for this ability in anyone you interview.

Everyone that has sold anything for a living knows that there comes a point in every sales opportunity where you could apply just a little more pressure and you’ll probably close the deal.  But most people don’t, can’t, or won’t do it.  Why?

Because it makes the salesperson uncomfortable to make the prospect feel uncomfortable.

Everyone has some degree of desire to be liked by other people; some have this desire much more than others.  In the case of sales people, this desire can be incredibly detrimental to being a great closer.  If you are so worried about making the prospect feel uncomfortable that  you won’t “go for the jugular” when the opportunity presents itself, your desire to be liked is taking over your ability to generate a high income as a salesperson.

I can already hear the comments coming from all of you that have been trained by a sales program that has taught you something like “if you sell right, you don’t need to close”, or “if you have to apply pressure at the close, your dealing with someone that shouldn’t really be buying your products or services.”

B.S.

Closing is, and will always be, a critical part of top sales achievers.  Don’t get me wrong – I am in complete agreement with the idea that in a relationship sales process like the one we have in our industry, you shouldn’t be giving a high-pressure sales pitch.

But even in a relationship sales process, there comes a point in 9 out of 10 deals where applying a little bit of pressure will result in a higher percentage of deals coming your way.  If you aren’t willing and able to do it (in a manner that is still professional), somebody else is and is getting more business than you are.

If you or your salespeople aren’t closing the number of deals you think you should, you are probably getting defeated by your desire to be liked.  Take an honest look at this factor for each rep and work on role-playing using strong closing statements and questions – it will pay off.

MRC

PS – we cover sales techniques and strategies in MSP Coach, our membership site for managed services providers looking to get a competitive edge in the marketplace.

This is a question that has been attempted to be answered many times and for many years.  It’s not easy to answer, as much of what makes a great salesperson seems to be intangible.

Most people think a great salesperson is a person born with loads of charisma and a platinum tongue.  I’ve met great salespeople that I would describe that way, but I’ve also met great salespeople that are as far from that description as possible.

So how would you characterize a great salesperson?  I found the following from a study conducted by Harvard Business School in 2002 and thought it was telling.  According to their research, great salespeople share the following characteristics:

1. They are intensely goal oriented
2. They demonstrate 100% acceptance for the results they achieve
3. They have above average ambition, will power, and determination
4. They are impeccably honest with themselves and their customers

I believe they hit the nail on the head with this list.  And maybe what isn’t on this list is just as important:

• They don’t mention that you have to look like a GQ model
• They don’t mention that you have to be able to give an Obama-like presentation
• And they don’t mention anything about being sneaky as a fox to get a deal done

I think that in order to sell managed services effectively, you definitely need all of the characteristics of a great salesperson that were mentioned in the HBS study.  The trick for those of you reading this is:

How do you find a great salesperson?

That’s been the toughest part about growing Everon – finding great salespeople.  The harsh reality is that you have to go through a lot of interviews and a lot of mis-hires before you find the gems you are looking for.  Even the Sales Managers at the leading sales-focused companies that I have met with and questioned about their sales interview process say that only 2.5 out of 10 salespeople are successful at their organizations.

That’s not a good number, especially to someone like me, who believes that when you hire someone you have a responsibility to make them successful.  I’ve created some interview processes that have helped, but it’s still a tough job.

I think the most important part of the interview process, for sales or any role, is to have a series of questions that really uncover the true nature of the person.  Without them, you’re flying blind.

Mike

PS – we cover salesperson interview strategies in our membership site, MSP Coach.

I’ve found that each of the questions below has a “right” answer and a “wrong” answer, and I get punished if I don’t respect this.  The challenge is that salespeople can sell, so they’ll make every answer sound good – don’t fall for it!

Here are the key questions I want to get answers to, in no particular order:

1.  In your previous sales positions, were you responsible for the entire sales cycle (prospecting to closing the deal)?  Correct answer: yes.
2. How did you build your client base?  Correct answer: cold calling, networking, etc.  Anything that shows proactive prospecting versus “our company gave us a lead sheet each day” or similar.
3. What percentage of your income came from commissions? Correct answer: greater than 50%.
4. Have you ever owned your own business before?  Correct answer: no.  You are looking for a salesperson, not an entrepreneur.
5. How much money do you need to make for this to be an attractive opportunity?  Correct answer: six figures.  Any salesperson worth their weight wants to make six figures.  If they say anything less than this they are not hungry enough!

There are obviously manner other questions I ask in the interview, but these five are the five that really determine if a person makes the cut or not after they have passed the culture test.  If you’ve got some other ideas that you use, please let me know!

MRC

One of the things that I’ve found in all great sales organizations is that they have a sense of urgency to achieve their goals every day.  I guess this could be said of any great organization period, but it seems more tangible in sales organizations due to the direct tie to revenue.

But how do you create that urgency?

There are numerous ways, but I heard one today that surprised me.

One of the new members of my sales team just came to Everon from AT&T’s new web services division.  He left them, even though he was making a lot of money quickly, because they ran such a sweat shop that he never saw his family.

I’m not advocating taking such extreme measures to create urgency like AT&T has, but many of their techniques can be applied very effectively when toned-down a bit.

The specific technique I heard from my rep today is that they make every one of their sales reps cold-call all day on Mondays, with the directive of setting 13 in person appointments for the rest of the week.  If they don’t set at least 13 appointments, they have to come back in to the office on Tuesday and continue cold-calling until they do, rearranging any of the appointments they just set on Monday to clear their calendar to make more calls!

That’s extreme – but I can tell you that they are getting results!

As I said before, I’m not advocating being this aggressive.  However, one of the rules of effective selling is that you should have a defined purpose for every call.  AT&T has very clearly defined that purpose, and so they get the result they are looking for.

I guarantee that if you sit down with your sales reps for a day and listen to their calls, very few will have a well-defined purpose for their calls, and therefore they will get less impressive results.

How can you put this lesson to work for you?

You should work with your sales team to define a specific list of possible objectives that will define each and every call.  Then, make sure that every person on your sales team is calling with one of those objectives in mind, and with specific criteria that will determine if they met their objective.

Results will improve, and so will sales.

MRC

His is to try to get fewer accounts, but to get bigger accounts that spend more money with him on average. He is working under the philosophy of growth by “selling more to your current customers”.

My approach on the other hand, is to try to get many smaller customers, each spending a less significant amount of money with us.

At first his strategy would seem to make more sense, but I would like to make the argument that it’s the wrong approach. Why? A few reasons:

1. Any time you have a larger percentage of your revenue coming from a smaller number of clients, your risks of a significant problem increase dramatically. If any one or two of your clients decides to leave, it can have a major financial impact.
2. I assume that most of the people reading this blog are selling to small businesses. If that’s the case, you need to be completely honest with yourself by acknowledging that your customers would rather not be spending their money with you. Nobody wants to pay for IT management and support services, they have to pay for it. Since that is the case, they will always try to get the lowest cost solution over time. Therefore, the bigger check they are cutting to you each month, the more likely they are to start analyzing those expenses and figuring out how they can cut them. It’s a funny paradox.
3. If you ever decide to sell your business, a smart purchaser is going to consider the above and lower your valuation. Think about it: if you were looking to buy a managed services business doing $5 million in sales per year that was made up of 10 clients each doing $500k per year versus a managed services business doing the same $5 million per year but made up of 100 clients each doing $50k per year, which would you consider a more risky purchase? In the first scenario, losing just one customer can completely wipe out your profits.

The net result of all of this? I believe that smart MSP’s will develop sales and marketing processes that allow them to affordably target thousands of small businesses as potential clients, not dozens. I’m not suggesting that it’s a bad thing to sign up larger clients, but I don’t think that should be the basis of your strategy, and I think you should do your best to not allow any one client to become more than 8% or so of your total revenues. I also completely support trying to sell what makes sense to your current clients to bump up their spend with you a bit over time, but again, I don’t think this is the foundation of a growth strategy.

Finding more clients is the foundation of a growth strategy!

MRC