Overcoming the 5 basic obstacles in every sales transaction

As Zig Ziglar said, every sale has 5 basic obstacles that need to be overcome:

  1. No need
  2. No desire
  3. No hurry
  4. No money
  5. No trust
I consider the most important of all the objections is the trust. Everything else will fail if there is no trust established between the sales person and the buyer.

One of the best ways to build trust is to listen to the prospect; understand his business, challenges and competition. Show them that you understand their world. Be honest about what your product/service can or cannot do for them. If required, even introduce someone who can solve their challenges if you can’t do so.

As in any relationship, building trust takes a lot of time and effort. Hence, it is absolutely critical that you do no lose it. If you have to decide to lose trust or an opportunity to make a sale, pls choose to keep the trust intact. This will always get you more business that anything else.

Once the trust is established, all other objections can be handled by following a set process as described in one of my previous blog – “To sell more, stop selling”.

Trust is also a key component in building relationships that last a lifetime of repeat businesses. Learn to build trust and you will never be short of loyal customers offering you repeat business for a long time to come. 

How to increase customer loyalty? First, Stop annoying them !

Everyone in sales knows the importance of customer loyalty and the importance of repeat business. Still, we go out and make it difficult for the customer to do business with us. Worse still, we downright annoy the customers.

I had one such experience with a start-up: myPNRstatus.com. They had a novel idea which they are trying out. You can enter the PNR number of the railway ticket and they claim to send you SMS’s on the status of the PNR (if wait-listed, they claim to send you an update everytime there is a change in the status) and also keep you posted on the status of the journey.

I was travelling by rail and had a wait-listed ticket. I decided to try out their service and so registered by PNR with them. I got a couple of SMS as claimed when the status of my wait-list changed from 24 to 22. Then I did not get any further SMS. I did not bother to check the status online myself as I was under the impression that with every change i will get notified. However, just 2 days before my travel date, I decided to check the status myself and was surprised to find that I now had a confirmed ticket. This change in the PNR status was completely missed by the service. I never got the status update on this. I did not think much of it and boarded my train.

While the train had about 12 hours to reach the destination, I started getting status messages about the current status of the train and its expected time of arrival at my destination. In the beginning i was getting about a message every hour or so. But as i was nearing my destination, I started getting an SMS every 10 minutes. This got really annoying and i felt that my inbox was being spammed. The worst part was the fact that I got a status message about the time of arrival at the destination 30 minutes past my arrival. This was downright annoying.

I would have been happy if I continued to get a status update once a couple of hours or even once an hour at the max. Nothing more than that. And never 30 minutes after my arrival.

I am not sure if they are even aware of this issue. My assumption is that as with any other business, they are definitely not aware of this situation and hence will not be working on it either, which is rather un-fortunate for the start-up. Hope they are listening and sort this out.

One of the most important thing that a business can do to increase customer loyalty is to do the following:
  1. Keep using the product or service to experience it as a customer.
  2. Ensure that you do not annoy your customers.  
  3. Ensure that you do not put in road-blocks for repeat purchase.
Hope the folks at myPNRstatus.com are listening. 

Measuring sales-force effectiveness

One of the key challenges that I have seen in senior leadership is to measure the sales-force effectiveness. This becomes even more important if we are in an environment where revenue growth is difficult to come-by. So how does one measure the effectiveness of their sales-force.

I think there are a few key indicators that show if the sales force is doing a good job or not:

  1. Revenue growth: The easiest and the most measured variable is the revenue growth. If the revenue is growing month-on-month, quarter-on-quarter, year-on-year, the sales-force is considered to be doing a good job. This shows the ability of the company to close sales. But this alone is not a good indicator of the sales force effectiveness. 
  2. Customer acquisition: This is measured by the total net new customers acquired. Ideally this should be measured and should either show a positive trend or at least stay within a specific range. This shows that the company’s product’s and the sales force is also on the lookout for new customers. This will ensure that the sales growth is not just dependent on a specific set of large customers. This also shows that your sales teams are not just milking existing customers but also are out building more relationships. 
  3. Repeat business (as % of total revenue): This is measured as a percentage of revenue from existing customers as against total revenue. This is very important and a steady trend shows that we are consistently getting new business from existing customers as well as new customers. This in a way shows the strength of the existing customer relationships. 
  4. No. of transactions: This is nothing but the number of transactions completed in a particular time period (usually a calendar month). This is an often ignored variable which can give early indicators to the management so that they can check if there is any cause for concern. This ability of the management to be able to check any issue at an early state can provide the management with enough time to course-correct mid-way. This ability is the difference between good companies and great companies.

All these indicators when viewed together can provide with enough information to the management on the effectiveness of their sales force and can also provide them clear direction for improvement. The compensation plan for the sales force should also have weightages for all of the above (albiet differential percentages depending upon the strategic direction.

Relevance of our products/services to customers

I received a comment on my previous blog on sales process that if there is no demand for a product/service, improving the sales process might not have any benefit. 

True. But how do you know if the decline in sales is due to lowering demand for your product/service or is it due to some other reason. 

My belief is that as long as your product/service is able to solve a key challenge for your customer, the demand for your product/service should not decline. If it still declines, the culprit lies in the process. 

A follow-up question is, how, when and how often do we check if our product/service is still relevant for our customers. Do we have a process in place for this ? 

Sales process

Whenever there is a decline in sales, what is our first reaction – we try to figure out what is wrong with the market or the sales team or the product/service being sold. We try to come up with new campaigns, discounts schemes or offers.

The thought that there might be a flaw in the process almost never occurs to us.

And this is exactly what provides us an interesting opportunity to explore. How much improvement in sales can we get by improving the selling process ? Can process efficiency drive sales numbers ?

These are questions that are worth exploring for all of us who manage sales.