Situation: A company produces a high performance product which is priced modestly higher than competing products. They are finding customers resistant to cost increases, even when they acknowledge the advantages of the higher cost product. The company needs to develop a new way to position their product. How do you introduce a product to new customers?
Advice from the CEOs:
Don’t compete directly with existing technology. Position yourself distinctly, as a new solution to address unmet needs.
Sell your solution “for those times when you need to save time.” Once they start to use your product, they will find it simpler and easier to use than the old product and will convert themselves to your product.
Use the pitch: Book an extra client today because this will save you this much time. This plays to customers’ incremental revenue opportunities to justify the cost.
At conventions, conduct contests among attendees – try our product versus your old product. Those who can use it fastest, or below a set time have their business card placed in a jar for an iPad drawing several times a day.
Sell a lower priced “starter” kit – or provide a free sample with easy to follow directions. Once the customer is sold on the product’s advantages they will be less resistant to the modest cost increase.
Focus on specialty functions within larger target clients – the functions that will benefit the most from your product’s advantages.
Situation: A professional services company has developed a new trial offer to promote their services to prospective clients. The offer includes a discount for an initial evaluation accompanied by a discount on services should the client choose to proceed with recommended solutions. They seek guidance on whether this is an effective approach. How do you craft and effective trial offer?
Advice from the CEOs:
The suggested approach is similar to what others offer to new prospects, but only goes half way. A discounted offer only works if you’ve convinced the prospective client that first, they need your services, and second, that there will be a positive financial impact to their bottom line if they agree to your trail offer. You need to add recommendations that will demonstrate a significant short term financial benefit.
Target your message. Give the prospect a reason to spend scarce dollars now.
Offer to apply all or some of the initial fee to future expenses if they contract you to solve problems that you identify in your initial review.
An example of a more targeted offer would be as follows – we will audit your accounts receivable as well as any debts that you’ve written off last in the last 2-3 years. Based on this audit, our past experience has been that you can boost short-term collectibles from these accounts by 30%. An offer like this demonstrates an immediate impact on cash flow.
Do you feel comfortable offering a guarantee? You will save the client $X over a guaranteed period or the service will be free.
Situation: A company hired a sales person who looked during the interview process like a hunter, but turned out to be a farmer. The company’s product-service mix is new to the market and requires a sales person who excels at landing new accounts. How do you tell hunter from farmer sales candidates?
Advice from the CEOs:
The hunter sales person is naturally more aggressive and loves the thrill of landing new accounts. The farmer excels at follow-up sales and cultivating existing accounts for new purchasing potential. Neither is particularly good at the others’ job, and it is rare to find individuals who excel in both roles.
To differentiate between these two personalities, behavioral interviewing is better than tests.
Screen resumes for past sales success in companies in a similar size range as yours to select a group for further evaluation.
Behavioral interviews are very different from traditional interviews. They the focus on specific skills and requirements associated with the job and require candidates to give concrete examples of when and how they have demonstrated the skills needed for the job. The interviewer then follows up with probing questions to elicit more details. Responses can be verified in follow-up with references provided by the candidate.
During the questioning process, the interviewer may interrupt the candidate with a question like “what are you thinking right now?” These questions provide more insight into the interviewee’s personality and also help to filter out B.S.
You are seeking someone who’s “been there done that” in a company which resembles yours and who can convincingly demonstrate what they’ve done.
Thoroughly check references – not just those provided by the candidate, but dig and talk to others in the same companies.
Strongly align the pay and incentives for a hunter. Hunters prefer a comp package that is heavily commission-based and this will scare away farmers. If they don’t sell, they get paid little.
Offer an extended trial period with burden of proof on performance by the sales person.