NZ’S E-MAG FOR SALES LEADERS | WWW.NZSALESMANAGER.CO.NZ

NOVEMBER | ISSUE 88

Page 6

Does Using Technology Improve Sales Results?

02 | www.nzsalesmanager.co.nz

From the Editor

I recently had a great time working with a group of enthusiastic 10 year olds on a three day business

experience which ends with them selling products they have made at a market.

One boy reported afterwards ‘that selling is the most fun thing in the whole world.’ With that attitude I

ABOUTShort and sharp, New Zealand Sales Manager is a free e-magazine delivering thought provoking and enlightening articles, and industry news and information to forward-thinking sales managers, business owners and sales professionals.

am sure he will go on to a successful career in whatever he chooses to do. Motivation for anyone in sales!I hope you have fun out there selling today.

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EDITOR Paul Newsom

ART DIRECTOR Jodi Olsson

GROUP EDITOR Nick Harley

ADDRESS NZ Sales Manager, C/- Espire Media, PO Box 99758, Newmarket, Auckland 1151, NZ

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NOVEMBERcontents

THIS MONTH'S MUST READ...............................................................................................................6DOES USING TECHNOLOGY IMPROVE SALES RESULTS?

LEADING AND MANAGING CHANGE................................................................................12

4 TIPS FOR A TOUGH NEGOTIATION.................................................................................................14

TWO MINUTE TOP-UP.......................................................................................................................18RETENTION MARKETING: MORE MONEY FROM LESS WORK

QUICK FIX..........................................................................................................................................22It’s not what you sell, it’s how you sell

BOOK REVIEW...................................................................................................................................23 Building Your Team's Morale, Pride and Spirit by Gene Klann

EVENTS CALENDAR..........................................................................................................................24

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MUSTREAD

Words by Ross Wilson

After years of heavy investment into sales force automation systems (SFA) such as Customer Relationship Management technology (CRM), business leaders are asking challenging questions about whether they are getting the expected returns on their investments.

As sales managers, the way we got our salespeople to engage with this technology was to tell them it would boost their sales results. We may even have believed that

ourselves. But what influence on sales results does technology have, especially SFA/CRM? The Results Are In!

Does Using Technology Improve Sales Results?

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People have been formally studying influential factors in sales performance for a very long time and we have read reports of interesting studies from as far back as 1935. However, researchi into the use of technology in sales was first reported in 1975 when we learned that keeping itemised records has a positive influence on sales performance. It was also found that technology over-use can have a negative effect on performance. (See Figure 1)

Fast forward to 2007, researchersii found that technology can improve performance with administration tasks, but found no evidence of technology use improving sales performance. In 2011 researchersiii began to split sales performance into a customer relationship dimension (the customer interface tasks) and an internal coordination dimension (corporate communication and administrative tasks). They discovered that:

Figure 1

Influence onPerformance

Usage of SFATechnology

1. There is a strong positive relationship between SFA usage and the customer relationship dimension of a salesperson’s performance, but only if the salesperson sees value in the system.

2. That the adoption of SFA systems does not automatically lead to improved sales performance. In other words, gaining improved sales results from any corporate SFA system depends very much on other more influential factors.

There is a strong positive relationship between SFA usage and the customer relationship dimension of a salesperson’s performance, but only if the salesperson sees value in the system.

08 | www.nzsalesmanager.co.nz

In 2012, while completing an MBA degree at the University of Auckland, I conducted research into the use of sales performance monitoring systems by professional salespeople. This international study spanned six countries, including New Zealand, and eight industries. The sample group of professional salespeople was evenly mixed with ages from 21 to 60+ years, with selling experience ranging from two years to 20+ years, and both genders.

This study used 'performance' to refer to the actions taken by a salesperson in the selling process, and 'results' to be the outcomes of those actions, usually measured in number of completed sales or, more often, total sales volume (i.e. in monetary terms). The focus of this study was on how the use of performance monitoring systems (SFA) influences a salesperson’s performance and the results that followed.

THE FINDINGS IN BRIEF:

1. 70% of salespeople currently use SFA of some kind. A further 13% have used SFA previously but no longer do so.

2. Of those who use or have used SFA, 60% said it was a corporate software system, while the other 40% used their own systems such as spreadsheets or paper.

3. 100% of those who use or have used SFA recognise “a little” potential value in their sales success of systematic monitoring their sales performance. Only 16% said this practice is “key” to their success.

4. 74% of all salespeople believe that using “an appropriate” SFA could make them more successful.

5. The majority of salespeople (70%+) reported that they don’t believe the company’s CRM or other SFA system delivers value to them, or helps them improve their sales performance.

6. Over all the findings indicated that corporate SFA systems do little or nothing to inspire or motivate salespeople to learn and develop, primarily because these systems do not deliver perceivable value to salespeople.

www.nzsalesmanager.co.nz | 09

What else do we know?

Technology is heavily relied

upon in business today, even

in the sales function. However,

while technology promises

much, studies show that

technology is less determinant

of sales performance than

either experience or sales

skills training, and sales

management performance

is known to have the greatest influence on salesperson

performance. In other words, SFA is well down the list of positive

influencers in salesperson performance.

While there is strong evidence of scepticism among salespeople

about the value of SFA systems currently in use, studiesiv show

that the more an SFA system is behaviour based, the greater its

influence on salesperson performance can be.

Today’s salespeople typically spend large amounts of time at their

computers using CRM and other SFA systems, time that could be

used interacting with prospects and customers.

010 | www.nzsalesmanager.co.nz

Conclusions So what do you conclude from these findings? Here’s what we think.Today companies spend much money per salesperson on SFA/CRM technology and yet the challenge seems to be to persuade salespeople of their usefulness.

As things stand today, salespeople just don’t get anything good from the SFA systems currently in use by many companies. Unless convinced about its usefulness to them, salespeople remain sceptical about an SFA system and will, therefore, either avoid 'wasting time' on it, fake it, or simply not comply. Today’s SFA systems have their place as management tools. Perhaps systems designed

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i Lucas, (1975)ii Sundaram, Schwarz, Jones and Chin, (2007)

iii Eggert & Serdaroglu, (2011)iv Anderson & Oliver, (1987)

by managers for management do offer value to managers but numerous studies have shown that there are several factors which positively influence sales performance and a SFA system is one of the least influential factors.

However, the majority of today's salespeople are required to make use of some kind of corporate SFA system and maintaining these systems tends to occupy a significant proportion of a salesperson’s day yet offer little more value (to them) than an old school business card holder and a notes file.

Isn’t the best use of a salesperson’s time given to two things: professional development activities to continuously improve sales performance, and selling activities where they consistently apply their growing knowledge and skills in conversations with customers to make sales?

The time that a skilled and motivated salesperson spends using the SFA system could probably be better spent talking to customers, while a skilled and motivated administrator keeps the CRM system informed. Doesn’t it seem logical that a 10% increase in the time and energy exerted on selling activities (by a skilled and motivated sales professional), will result in at least a 10% increase in sales results? How then can you free up your salespeople’s time and energy to give more to effective selling activities? •

Doesn’t it seem logical that a 10% increase in the time and energy exerted on selling activities...will result in at least a 10% increase in sales results? How then can you free up your salespeople’s time and energy to give more to effective selling activities?

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012 | www.nzsalesmanager.co.nz

Leading and Managing Change

Words by Andrew Reimer

How do you have open discussions and even create interest from

people so that they don’t say ‘I don’t want to do this.’ What questioning approach do you use to open their minds to possibilities and get them on board? How do you get everybody involved in the

How do you lead and manage change in your sales team? Sales managers know things are constantly changing in their company, industry, with clients, product range, sales team, and with their systems. A sales manager’s role in leading and managing change is actually huge. Let’s look at how you can succeed in change management.

change? This is often quite a challenge in itself because people can’t opt out − “I’m just going to ignore this.”

Everybody needs to contribute information, feelings, attitudes, opinions; and it’s much better to get these out in the beginning. Anybody who is going to be affected by the change needs to be involved in the planning. I know that sounds awkward, because sometimes people may not like to hear about how the change is going to affect them. But the sooner you get that information out there, the sooner you can start to address issues and problems. One of the reasons change ‘falls off the rails’ is because someone plans and

www.nzsalesmanager.co.nz | 013

announces the change and then starts to sell it rather than involve people in the planning. If you’re trying to move through change, you need enthusiasm; you need people out front. It can’t be just you. You need to build some enthusiasm to ensure that the change has some legs.

You can’t be the only one out there pushing. In managing change, there are five steps that everyone who’s involved needs to understand. If any one of these five steps isn’t understood, then you’re going to have a problem with your change. It’s going to take longer, it’s not going to work, you will experience problems, or it’s going to be frustrating and confusing.

The first step is a clear vision of where you are trying to go. Everyone needs to know!

The second step is the identification of the skills required. Do we have the skills, capacity and ability to actually make these changes or do we need to get some training or support? Do we need to get other people on the team who have these skills?

The third step is ‘what’s in it for us’: the incentives. What’s in it for the team? What’s in it for people individually? If it’s a change that the team is not all that crazy about, then maybe the incentive is ‘just getting through this so we can get back to what we’re doing’. What’s in it for the team to actually make this work?

The fourth step is the identification of the resources required, such as time and staff. People have to have the tools, and the capacity, to make change work.

The fifth step is the action plan. After you’ve identified the vision, the skills needed, the incentives and resources required you need a plan. The action plan defines steps with deadlines. This is so that the team can measure themselves and adapt − let’s do this and try this out, let’s measure it here, then let’s come back and adjust it there. When the change starts to work and there are some ‘runs on the board,’ everybody needs to know that modification is over. The word is ‘concretise’.

You’ve got to lock it down. The change can be adapted, but you have to say ‘that is the way we’re doing it now’, so people know when the trying out period is over. They have to understand that there’s a point at which you’re going to say ‘that’s it’ − we’re going to concretise it; put it down in stone; this is now the foundation; this is what we’re doing. When you have these five steps in place, and if you can concretise the change, you have a pretty good chance of effectively managing change. ●

Andrew Reimer is the Founder and CEO of Sales Management Solved. To find out more visit www.salesmanagmentsolved.com/blog

www.salesmanagmentsolved.com/blog

014 | www.nzsalesmanager.co.nz

One of the questions we often get asked is, “How do I negotiate when the other side are aggressive, rude or just nasty?”. We have four key tips that will help when the going gets tough.

First things first. Do not get sucked in. The basic ruling emotions

of love, hate, fear, lust, and contentment originate in the most

basic part of our brain. We humans have three layers of brain:

the brain stem, limbic and neuro cortex. Over millions of years of

evolution, the core brain stem, often referred to as the ‘reptilian

4 Tips for a Tough Negotiation

brain’ has been superseded, and

layers of more sophisticated

reasoning have been added

upon this foundation to make

us smarter than the rest of the

animal kingdom.The trouble is

that when we are threatened,

frightened, lied to, insulted,

It’s a hard life as a sales person – customers with ever decreasing budgets, sales managers with ever increasing targets. Sellers have always had to deal with difficult people, maybe aggressive buyers, demanding customers, or obstinate internal colleagues, but these days, people seem to be more ‘difficult’ than ever.

Words by Alan Smith

www.nzsalesmanager.co.nz | 015

cheated or treated badly, all this sophistication peels away and the reptilian (or reactionary) brain kicks in.Once this has happened we lose control of our emotions and sense of perspective, we dig in, fight back, raising the temperature even further, and the negotiation spirals out of control. Or even worse we retreat into our shells and run from the problem, simply giving in.

The fundamental fight or flight mechanism. If we give in we reward the bad aggressive behaviour, and by doing so we teach the other side that treating us badly gets results. If it works they will keep doing it. In fact many aggressive and unpleasant negotiators get their way by winning concessions after whipping the other side into submission, by (in corporate speak) taking all the skin in the game. So stay in control. Easier said than done, right! How do we manage the situation when put under this kind of pressure?

1 Recognise the behaviour. First question to ask yourself whether it is a ploy or is it natural behaviour? The answer to this may also depend on whether you are negotiating in

a ‘contract’ or ‘relationship’ situation. If the other side is trying to rile you so you feel uncomfortable and may give in more readily, understand what they are doing. If you react to provocation it is likely to encourage more of the same from your adversary. Stay calm and engage your higher brain systems. Let them go through their rant. Stay quiet and do not engage.

Once they have finished, summarise their key concerns to show you have been listening and making notes and maybe ask them to go through their concerns again. Be professional. It is very difficult for someone to maintain an aggressive stance for long, particularly if you are being calm in response. Resist the temptation to score points.

Fighting back will not in our experience advance your immediate interests and may damage the long term relationship. Moreover if you are dealing with people who use this tactic they may be used to using it and be good at it. Better to reframe the negotiation on terms you find more amenable.

2 Make any movement on your part, conditional. Negotiation is a trading process. Of course you will have to make concessions if you are negotiating, but make

sure that any movement you make is only achieved if they do something for you too. And get the language right.

Put any conditions that you have on making movement clear, specific and up front before making any offers. It is important to make sure that your conditions and offers are realistic. Unrealistic, barking mad proposals that work for you, but not them, will cause even greater aggressive behaviour. Emphasise that the concession offered is because of the logic or content of their argument, not the tone or manner of the delivery. This will help highlight the fact that you have observed, assessed and not been influenced by the adversarial manner.

016 | www.nzsalesmanager.co.nz

3 Buy time to think. In the traffic of a hard and aggressive negotiation it can be incredibly difficult to maintain calm and control. You need to create time to think rationally and

decide whether you can negotiate, where your flexibility can be, and importantly what you can trade in return.

If you are negotiating in a team use the other players in the team to buy time by asking them to summarise the position the negotiation has reached. Plan to take breaks in large and difficult negotiations to consider your strategy and clarify objectives. Time out can help you focus on what you want and need and take some heat out of difficult negotiations.

negotiation is about conflict and often use war terminology (“ready for battle…?”).

Remember the words of Sun Tzu in The Art of War, ‘the supreme art of war is to defeat the enemy without fighting’. Engage your higher level thinking systems and stay in control; keep asking questions and explore ways of coming up with solutions that you can both live with. Losing your control will make you appear unprofessional, giving in will be seen as weak. ●

Alan Smith is an Associate Director with negotiation experts Scotwork. To find out more visit www.scotwork.co.nz

www.scotwork.co.nz

4 Do not, and I mean DO NOT, just give in. Giving in is the worst thing you can do, because guess what will happen next time? Sometimes the pressure will be on you and you will be

made to feel responsible for delaying or deadlocking a deal, so the temptation is to just say “yes”.

Two problems here. Firstly, there will be a very real risk that you then have to live with a deal that you should never have agreed to. Second, the next negotiation will simply be more of the same. So buy time.

Take a break, meet and discuss strategy for dealing with this behaviour with your colleagues. But don’t surrender. Negotiations are a part of our everyday life, we all negotiate pretty much all of the time. Coming across a difficult and aggressive negotiator is not that unusual, they are everywhere. Such people believe that

Engage your higher level thinking systems and stay in control; keep asking questions and explore ways of coming up with solutions that you can both live with.

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018 | www.nzsalesmanager.co.nz

TWOMINUTETOPUP

Retention Marketing: More Money

from Less WorkWords by Tom Emmerson

www.nzsalesmanager.co.nz | 019

In that gap between sales you cannot afford to forget about your customer and there are some simple marketing techniques you can use to keep them on your side. The single biggest way you can keep your customers is by giving.

Key account management, customer relationship management, schmoozing. It comes under different names but the concept of harnessing the work you’ve

already done to pave the way for future sales is developing. Not least because conquest sales from competitors are getting harder and harder to win.

You may be blessed with a product that is far superior to the one your target customer has or you might be lucky enough to have a product that there’s a desperate need for and no competitors at all. In either situation it’s a fight to win those customers over. So why do so many salespeople nail the sale then forget about the customer that they worked so hard to get?

Many businesses are guilty of looking at new client acquisition as their main focus of growth. A recent MYOB report on the state of New Zealand businesses highlighted this, with most companies highlighting new client acquisition as their third highest priority for investment. However the area that many businesses were removing investment was in current client retention. Needless to say − this is bad.

Marketing and advertising are one of the biggest cost centres for any business. You spend a small fortune on making the market aware of your product and then win them over with the sale, only for them to never hear from you again (until it comes to a service interval or a Facebook update once a month).

In that gap between sales you cannot afford to forget about your customer and there are some simple marketing techniques you can use to keep them on your side. The single biggest way you can keep your customers is by giving.

So many businesses are caught up in the idea that a poor business model is based on freebies when the true winners in retention see the value in giving a little, to get a lot.

But how do you give without undermining the products or services you offer? Only you can decide the content; but here are a few channels and suggestions you can use to get in touch with customers and add heaps of value to their relationship with you.

020 | www.nzsalesmanager.co.nz

NEWSLETTERS – they were designed for this. By including videos on product demonstrations, interesting articles from the industry and exclusive access to events you’re supporting your sales function, without killing it. TIP – use MailChimp to send out your newsletters. Not only is it really easy to build a good looking newsletter even with no experience but it tracks open rates and even who opens it the most (maybe they are back in the market and are worth a call?).

LINKEDIN – It’s a great tool and not just for job hunting! If you have a profile, then connect to your customers on there. It’s better than Facebook for B2B relationships as they won’t be seeing pictures of your dogs, or that great dinner you’ve just shared − but as with any social media you have to be sociable! Use Linkedin to answer customer questions and post new ideas on how to use your product, you can even update them on new developments.

CALL – I know it’s old school and some sales people don’t always have time, but calling to make sure the product is going okay and that they have everything they need is really appreciated. If the customer only hears from you when you’re trying to sell them something they begin to resent hearing from you. You never know, you may also hear about a competitor that’s trying to poach them. Calling them also gives them an opportunity to raise any problems they’re having, giving you the opportunity to help fix them before they become irreversible.

www.themarketingcompany.co.nzTom Emmerson is an Expert Facilitator and Marketing Manager at THE Marketing Company. To find out more visit www.themarketingcompany.co.nz

For those of you not convinced about the benefits of giving, then consider the financials. Add up the total cost of new customer acquisition: marketing spend (including advertising and telemarketing), visit costs and the time spent tailoring a pitch or solution (don’t leave out how much of your time is taken answering questions!). Now consider the cost of selling to someone that’s already been sold to before. A study by the UK’s Chartered Institute of Marketing showed it commonly costs anywhere between five and ten times more to acquire a new customer than keep an existing one. As cost of sale is usually a major factor in profit doesn’t it make sense to make more money, by doing less work? ●

Get world leading free whitepapers and research each month by email!

Contact Ross Wilson on 021 152 8400 or email info@growingorganisations.com to discuss how we can help you achieve your sales goals in 2014.

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Global Best Practices For Kiwi Business

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QUICKFIX

Networking:Make Notes as You GoHow many business cards might you collect at a

networking function? Five, ten, twenty or more? You get back to the office a couple of days later and sort through

the cards, deciding how to follow up each one. With many conversations in a short space of time, and a couple of days in between you may well struggle to remember key points of relevance for the follow up.

Most business cards have plenty of blank space. Use it. After each conversation pause for a moment and make a note on the card of where you met the person, the key points of relevance and what follow up is required. ●

www.nzsalesmanager.co.nz | 023

RESOURCECORNER

To build morale, pride and

spirit, a leader needs certain

characteristics and skills.

This book will help you determine

your current level of readiness. It

describes two key factors: time spent

together in shared experiences, and

communication among team members.

The results of building morale,

pride, and spirit include cooperation

and loyalty from team members,

enhanced productivity and efficiency,

and tangible economic and relational

outcomes. The leader is the key to the

success of the process. ●

Building Your Team's Morale, Pride and Spirit

www.mightyape.co.nz $20.99 by Gene Klann

024 | www.nzsalesmanager.co.nz

EVENTSCALENDAR

“Nobody counts the number of ads you run; they just

remember the impression you make.”

DATE NAME PLACE COMPANY17th November Essential Marketing Boot Camp New Plymouth The Marketing

Company

18th-20th November Sales Performer Auckland David Forman

18th November Cold Calling and Prospecting Auckland Top Achievers

18th November Sales Basics Auckland Geewiz

25th November Sales Process Auckland Top Achievers

25th November Sales Basics Christchurch Geewiz

25th-26th November Cutting Edge Sales Skills Auckland NZIM

5th December Sales Process Auckland Top Achievers Sales Training

9th December Sales Basics Auckland Geewiz

10th December Advanced Serious Selling Auckland Geewiz

11th December Sales Training Christchurch Top Achievers Sales Training

16th December How to cold call when you hate cold calling

Auckland Top Achievers Sales Training

www.nzsalesmanager.co.nz | 025

THECLOSE

“Nobody counts the number of ads you run; they just

remember the impression you make.”

William Bernbach