The CEO Blues: “Winning Sales”​ vs. “Winning Profitable Sales”​

• June 3, 2019

The “winning more sales” industry is huge, crowded, and noisy; the “winning more profitable sales” industry is, well…disturbingly quiet. There are a few sales performance companies who put terms like “profitable sales” into their advertising. Unfortunately, precious few know how to turn tagline into the profit line.

To a sales leader, the difference between those two may be a secondary concern.  However, there is nothing a corporate leader cares about more. Corporate leaders:  here are the organizational differences between the two.  Sales Leaders:  I want to prepare you to have this conversation with your CEO.

World Class Sales is a Real Achievement.

Building a winning sales organization isn’t easy. According to CSO Insights, “world class” sales organizations make up only about 5-9% of companies each year. Without diving into research methodology (I’ll admit, I’m a bit of a research wonk), suffice it to say that I think this year’s definition of “world class” is as good as any they’ve ever come up with. This year, the world-class label applies to companies who (I’m paraphrasing below. If you want a copy of the report, contact me):

• Add value to every customer interaction, every channel.
• Build persona-specific customer value consistently, through the customer’s journey.
• Align Cross-functionally (although CSO Insights takes a narrower view than I do of which functions they include ) to deliver a consistent experience.
• Continuously learn and improve by building a great coaching infrastructure.
• Enforce rigor around call planning and forecasting.
• Leverage their sales analytics as a sales improvement tool, not just a sales monitoring tool.
• Use a purposeful talent strategy.
• Have built a system of finding, harvesting, and replicating best practices.

Building an organization with all of these characteristics is a challenge. Disappointingly, achieving “world class” might simply be causing the CEOs Blues: winning sales, but not profitable ones. While world class is a huge achievement for many companies, most CEOs want more.

Selling Profitably Isn’t Much Harder. But it’s Very Different.

Selling profitably means selling at a win-win price reflecting customer value. Most sales training companies help sellers build enough value to win a sale, but not to win it at a value-based price. When done correctly, the higher value-based price actually coincides with higher customer preference.

Let’s look at some of the differences between world-class sales, and world-class profitable sales. Comparing/contrasting with the list above:

• “Adding value during every interaction” goes from “figure perspective out for yourself” or “use the persona-based value propositions we give you” to developing a deep organization-wide understanding of customer value and specific tools for salespeople to build it.
• The entire customer experience evolves beyond providing persona-specific value messages. Besides messaging, value-enabled sellers gather customer insights and build customer value from first web click-through customer’s end of product life.
• Cross-functional alignment extends beyond the walls of the sales and marketing silos. In contrast, everyone who touches a customer has a value-building and value-insight-gathering role.
• Great coaching culture is equally valued. What’s coached, plus who all is coached expands.
• Customer value shapes call planning and forecasting more directly. Think about it: if you know clearly just how highly a customer values each offer you will make next month, how much more accurate do you think forecasts will be?
• Sales analytics are even more focused, emphasizing how sellers focus on value.
• The talent strategy is every bit as important.

A few years ago, a VP of sales with a Fortune 500 company described this as “elite level” selling. I can’t argue and maintain that it’s within the reach of most sellers. As your organization begins building a value culture, it takes on these characteristics.

Pricing is Profit. Value Shapes Pricing.

As your company masters elite selling, you have the tools to price with confidence, with your customer’s blessing.

Ask your CEO if he/she’d like more profitable sales. In preparation, do yourself a favor and do a quick exercise: calculate 1% of your company’s revenue, then add that number to your net income line. Next, calculate that increase in profitability as a percentage. You just calculated what your CEO could report to your company’s owners if your sellers simply added just 1% to your company’s pricing. Phrased differently, this is how profits would increase by discounting just one percent less.  Heck, do the same calculation for a 1/10th of 1% reduction discounting.

When your CEO indicates that it seems worth pursuing further, dig a little deeper. Ask:

• Does everyone who touches my customers (aka sellers) regularly conduct commercial/value conversations with their customer contacts?
• Do my sellers know how my customer makes money…and all the ways my offer can help them (hint: most “world class” selling organizations don’t)?
• Do my sellers know how to measure customer value with a customer?

Contact me with your answers, and let’s see if we can have some fun together building your business…profitably.

To your success!