Robert Miller and Stephen Heiman’s The New Strategic Selling is a systematic analysis of how to sell to large organizations. The book focuses on positioning yourself for success prior to a sales call by understanding the interests of both the buying organization and each of the individuals who will influence the sale. Sales success comes from demonstrating both individual wins for the buying influences and company wide results for the purchasing organization.
The New Strategic Selling also provides a framework for understanding your current position with each of your sales objectives and thinking through the most effective actions to advance the sales process. Miller and Heiman argue that a closed deal is not primarily the result of tactical closing techniques but rather the natural result of an effective strategy.
Preface: Key Principles
- Win-Win
- Four Buying Influences
- Four Response Modes
- Win-Results
- Red Flags
- Ideal Customer
I. Strategic Selling
1. Successful Selling in a World of Constant Change
- The Complex Sale
- A number of people must give their approval or input before the sale is commenced
- The buying and selling organization have multiple options
- Numerous levels of responsibility are involved in both organizations
- The buying organization’s decision process is not self-evident to an outsider
- Strategic Selling focuses on pre-call selling strategies to position yourself for success
- Position yourself with the real decision-makers
- Spot two buyer attitudes that can make a sale and two that can break it
- Get satisfied buyers, repeat sales, and referrals
- Identify the four buying influences present in every sale
- Recognize signals that a sale is in jeopardy
- Allocate time wisely to four key selling tasks
2. Strategy and Tactics Defined
- Strategy means getting yourself in the right place with the right people at the right time so you can make the right tactical presentation
- Long term strategy means maintaining healthy relationships to win repeat business
- Focus on a single sales objective; a specific piece of business sold at a specific time
- Four steps to realizing a strategy:
- Analyze your current position
- Think through alternate positions
- Decide which alternate position is best and devise an action plan
- Implement your action plan
3. Your Starting Point: Position
- Understanding position
- Who are the key players?
- How do they feel about you?
- How do they feel about your proposal?
- What questions do they want answered?
- What changes are happening for them? Are those threats or opportunities?
4. A Glance at the Strategy Blueprint: The Six Key Elements of Strategic Selling
- Buying Influences (a.k.a. buyers)
- Economic Buying Influence: Gives final approval to buy
- User Buying Influences: Make judgments on your product’s impact on their job performance
- Technical Buying Influences: Screen out sellers based on objective specifications
- Coach: Guides you to the buyers and helps you position yourself with them
- Every sound alternate position eliminates a red flag or leverages a strength
- Response Modes
- Buyer’s whether your product will close a gap between their current state and their desired state
- If a buyer doesn’t recognize such a gap, he won’t be receptive to your product
- Growth: Wants to increase quantity or quality; show you can help them get more or better
- Trouble: Sees that they are not achieving their plan; show you can fix the problem quickly
- Even Keel: Sees no discrepancy between reality and goals; no incentive to change
- Overconfident: Sees reality as better than goals; unreceptive to change
- Win-Results
- Satisfy both buyer’s company and personal objectives
- Result: Objective impact on buyer company’s business process
- Win: Subjective personal gain that satisfies individual buyer’s perceived self-interest
- Sales Funnel
- Helps you allocate your scarce time among the four critical selling activities
II. Building on Bedrock: Laying the Foundation of Strategic Analysis
5. Key Element 1: Buying Influences
- Goal: Identify the four buying influences for your sale ensure that you’ve handled their attitudes toward your proposal
- Economic Buying Influence
- Gives final approval to the sale
- Can release discretionary funds if value is demonstrated
- Finding the economic buyer
- The economic buyer will be higher on the organizational chart if the size of the sale is high, economic conditions are difficult, or the sale has a large impact on the organization
- The economic buyer will be lower on the organizational chart if the company has experience with your company and with your type of product
- User Buying Influences
- Make judgments regarding how your product will affect the job they do
- Focused on reliability, ease of use, downtime, retraining needed, morale impacts
- User buyers deserve attention because they are critical to ensuring successful implementation and repeat business
- Technical Buying Influences
- Screen out proposals based on whether they meet technical specifications
- Aren’t necessarily focused on technology, e.g., in-house counsel is a technical buyer
- Technical buyers may pose as the economic buyer and claim more authority than they have
- Coaches
- Guide you toward a successful sale by giving you information and advice
- You develop someone into a coach by looking for someone with whom you have credibility, who has credibility with the buying influences, and who wants your solution to succeed
- Ask directly for coaching and use the word coaching; people like being a coach
- Always sell to all buying influences
- Buying influences differ in their degree of influence. To spot those with high influence, look for:
- Organizational impact: the part of the buyer’s organization where your solution has the most impact
- Level of expertise: the person who is an expert in your type of solution
- Personal priority: the person to whom your solution matters most
- Creating a buying influences chart
- List each type of buyer for your single sales objective
- List their degree of influence
- Ask if each of them is covered, either by you or someone else
6. Key Element 2: Red Flags/Leverage from Strength
- Red Flags are areas of immediate danger to your sale
- Missing information about any key element, such as the identity of buying influences
- Uncontacted buying influences
- Buyer who is new to the job
- Reorganizations
- Strengths
- An area of differentiation
- Improves your position with a buyer
- Relevant to current sales objective
- Eliminating Red Flags
- Don’t count on persistence or ignoring the problem
- Instead, leverage a strength, e.g., use a user buyer who likes your proposal to get you in to see the economic buyer
7. Buyer Level of Receptivity
- Your proposal will create change
- The individual buyer can view change as an opportunity or as a threat
8. Key Element 3: The Four Response Modes
- People buy when and only when they see a gap between their current reality and their desired state
- Growth
- Individual wants to do more or better; your proposal helps them do more or better
- The fact that the company is growth-oriented doesn’t mean an individual is. An individual may be satisfied or see change as a threat.
- Trouble
- Buyer wants to avoid defeat
- Will choose the proposal that lets them most quickly fix the problem, not necessarily the most advanced solution
- Trouble is a more powerful motivator than growth
- Even Keel
- Buyer sees his current status as matching desired state
- Even keel buyers are very hard to sell because changes can only disrupt this situation. Technical and user buyers often fit into this category.
- Your responses
- Buyer sees growth or trouble in the future
- Use pressure from another buying influence who is in growth or trouble mode. Economic buyers work well here because they are focused on forecasting.
- You demonstrate a discrepancy
- Watch and wait, reengage when the buyer sees growth or trouble
- Overconfident
- Thinks they’re doing better than they are; almost zero chance of selling them
- Caused by setting goals that are too low or misunderstanding their situation
- Usually cycles back to trouble
- Your responses
- They don’t welcome news that things are worse than they think
- Best to wait and reengage when their perception changes
- Don’t ignore buying influences with unfavorable response modes
- Accept their current perception as the starting point
- Use buyers who are in growth or trouble to speak to their even keel or overconfident colleagues
- Creating a response mode chart (put all of these in a section at the end)
- List response mode for each buying influence
9. The Importance of Winning
- Structure deals so that you and all of your buying influences win; if any of them are disappointed it will be harder to get repeat business from that account
- Win-Win
- Mutual dependence, mutual benefits
- Win-Lose
- Examples: Selling an inflated price due to urgent need; unrealistic promises regarding capabilities; excessive upselling of add-ons
- Leads to short term sales and a bad reputation
- Lose-Win
- You take a short term loss to give the customer a win expecting that you’ll get a win later on
- Examples: Extraordinary discounts, extraordinary free add-ons
- Leads to unrealistic customer expectations making it hard to get your win later on
- If you play lose-win, be sure the customer understands that it’s a limited offer and put it in writing
- Lose-Lose
- Default result if you don’t actively create a win-win outcome
- Serving a buyer’s individual self-interest makes them part of your joint venture team
- Show buyers that you are trying to serve their self-interest
10. Key Element 4: Win-Results
- Show each buyer that you will serve their self-interest
- Results
- Measureable impacts on a business process that are objective and corporate
- Improve a process that’s going well or fix a problem
- Results are measurable: a 10% increase in sales
- Results are corporate: they affect many people
- Wins
- Based on the individual’s values
- Subjective, like feeling that you’ve done your best or have a strong family
- Examples: Power/influence/status, reputation (leader, problem solver, change-maker), self-esteem, put in a quality performance
- Personal rather than corporate
- Identify the result each buyer needs, show them how the result leads to a win
- Inferring wins
- Economic : Low cost, ROI, productivity, profitability, flexibility, stability
- User: Reliability, upgrade skills, fulfill performance, better/faster/easier
- Technical: Timely, meets specifications, reliable, low cost
- Coach: Recognition, make contribution, be seen as a problem solver
- Asking about wins
- Ask attitudinal questions: How do you feel about the proposal?
- Creating a Win-Results statement
- List each influence
- List the result they care about
- List the win they care about
- State the connection between the win and the result: Reducing downtime will help Bob appear efficient to his supervisors
III. Common Problems, Uncommon Solutions
11. Getting to the Economic Buying Influence: Strategy and Tactics
- Problems: Can’t identify economic buying influence, can’t get in to see them, uncomfortable talking to them
- Economic buying influence is paid well because of their ability to forecast trends
- Identifying the economic buyer
- The greater the risk of the decision, the higher the level at which the decision is made
- Economic buyers ask organizational questions like profit and ROI
- Get coaching
- Sellers often go one level too low because they’re uncomfortable going higher, so go one level higher than you think you have to
- Overcoming blocks to seeing the economic buyer
- People who block you from seeing the economic buyer are often afraid your proposal will cause them to lose
- Show them how they’ll win, make them look smart by bringing you on board
- Show that you’ll deliver value to the economic buyer in the form of information that helps them forecast
- Going around the blocker creates an enemy
- Going along with the block can be the least bad strategy for the long term
- People who block you from seeing the economic buyer are often afraid your proposal will cause them to lose
- Discomfort in seeing the economic buyer
- Be sure you have a valid business reason in that you’re meeting a need for the economic buyer
- Economic buyer needs information, you know more about your industry than he does
- Information should relate to long-term profitability, not features
- Relate information to the economic buyer’s concept, their objective for the sale, e.g., we want to increase automation. Once they have a specific concept, the rest of their decision is based on technical criteria.
- Additional techniques
- Like-rank selling: Your economic buyer may be a VP, using your VP to meet with him may get you in the door
- The executive briefing: Annual presentation reviewing the wins you’ve provided their company
- Bringing in a guru: Give the economic buyer a chance to meet with an expert
- Keeping in touch: Do so periodically, always have a valid business reason
- Creating a position statement for the economic buyer
- List who the economic buyer is
- Determine if he is well covered
- Determine how receptive he is to the proposal
- Ask if you’re playing win-win with the economic buying influence
- Ask if you have a valid business reason for seeing the economic buyer
- Pre-meeting checklist for economic buyers
- What do you want to find out to determine the right results and personal wins?
- What do you want the economic buyer to know?
- What do you want the economic buyer to do?
- How do you want the economic buyer to feel?
12. The Coach: Developing Your Prime Information Resource
- You nominate/create the coach
- Criteria
- You have credibility with the coach, usually because that person has won with you in the past
- The coach has credibility with the buyers
- The coach feels that he will win if your proposal is accepted
- Asking for coaching
- Ask and literally use the word coaching
- People like the idea of being a coach and asking for coaching reinforces that you’re the player and will carry the ball by doing your own selling
- Beware of false coaches
- Coaches have unique information about that specific sales objective, they’re not friends who generally wish you well
- Develop a network of different information sources to check the info you get
- Testing your coach
- Will your coach win if you make the sale?
- Has the coach helped you find the key players, has the coach helped you determine how receptive buyers are to your proposal, has the coach given you useful information on what win-results you need to deliver for each buyer?
13. What About the Competition?
- Beating the other guy is a consequence not a cause of success
- Competition is tougher because
- Lack of differentiation: Competitors converge on features
- Customers are savvier, less easily directed by experts, more willing to demand customization, readier to say that they see no difference and will therefore compete on price
- New types of competition
- Using internal sources to fix the problem
- Allocating the budget elsewhere
- Doing nothing
- Don’t focus on the competition
- Focus on developing your strengths rather than being distracted by countering theirs
- Selling is a side by side sport like swimming where you’re racing your competitors to the sale rather than a face sport like boxing where you compete with them directly
- Focusing on competitors is a bad idea because it
- Makes the conversations about their strengths
- Invites price competition b/c you’re being compared toe-to-toe
- Stops you from focusing on the customer’s desires
- Instead, focus on restoring differentiation by providing a customized solution
- Understand their concept, the benefits they hope to achieve
- Make a contribution to their business that differentiates you
- If you want to try to change their criteria, do that early in the process
- If you can’t displace an incumbent, let the customer know that you can be a backstop if there’s an issue with the incumbent
- Four tough cases
- Entrenched competition
- Meet many people in the buying organization so you can find out about areas where the competitor isn’t delivering
- You’re firmly entrenched
- Figure out why you’re entrenched
- Cover the bases with new personnel at the buyer
- Review contributions if there are problems
- You’re the higher priced supplier
- Focus on value, don’t race to cut price
- The customer just wants you to submit a blind bid
- If you can’t talk to the buying influences, don’t participate. Send a polite letter saying that you’d love to work with them and have a chance to discuss their needs.
- Entrenched competition
- Competition workshop
- Identify all the alternatives to your proposal, including inaction and internal resources
- Assess the competing firms, their record with the customer, and their allies inside the customer’s organization
- Define your contribution. How is working with you a joint venture?
IV. Strategy and Territory: Focusing on Your Win-Win Customers
14. Key Element 5: Ideal Customer
- If a customer is not win-win, consider turning them away so they don’t become a long term waste of time that prevents you from focusing on better business
- You are seldom constrained by a limited number of accounts to contact
- Restrict yourself to accounts that will be win-win to avoid drowning yourself in dead end sales processes
15. Your Ideal Customer Profile: Demographics and Psychographics
- Ideal customer is a combination of demographics, visible objective characteristics like company size and compatibility of their systems with your product, and psychographics, their values and attitudes like openness to innovation
- Psychographics matter: You can’t sell a higher priced product to a customer that only values price
- To identify your ideal customer profile
- Identify your best customers and your worst
- List the traits of the best customers and the traits of the worst
- Test your current accounts based on these traits
- To the extent that an account lacks the best traits, devise a strategy to get around these
V. Strategy and Territory: Managing Your Selling Time
16. Of Time, Territory, and Money
- Efficient use of selling time is critical
- Selling time is talking to buyers about growth or trouble or asking questions to uncover a growth or trouble discrepancy
- Normally only 10% of your time is true selling time
- Don’t spend it on the wrong accounts
17. Key Element 6: The Sales Funnel
- Their sales funnel has four parts, each of which is associated with only one kind of work
- The funnel helps you do the right kind of work at the right time
- Universe – Prospect
- The universe is the set of all potential selling opportunities
- Prospect by searching for a fit by testing opportunities against your ideal customer profile
- Above the Funnel – Qualify
- Qualify by verifying the data suggesting that they fit your ideal customer profile by contacting buying influences and coaches and seeing if the customer is interested in an initial conversation
- In the Funnel – Cover the Bases
- Identify buying influences, understand their degree of influence, and be sure they’re covered by the person best qualified to cover them
- Understand their response mode, figure out how to eliminate the discrepancies of those in growth or trouble
- Identify the results that each buying influence needs to get a personal win
- Confirm and verify your data on these points
- Best Few – End Tasks
- The best few are those opportunities that you’re 90% sure will close in less than half your normal sales cycle
- Overcome last minute objections, get order signed
18. Priorities and Allocation: Working the Funnel
- Setting priorities means determining which of the four kinds of work to prioritize
- To avoid a roller coaster of variable results, focus on closing your best few first, universe/prospecting second, above the funnel/qualifying third, and funnel/covering the bases fourth
- Maintain a balanced funnel with an even distribution of prospects at each stage
- Focus on sales objectives with high income, focus on accounts with high potential
- Match target company buying cycles
- Funnel analysis
- Time allocation workshop
- Recall the ideal sequence of best few first and in the funnel last
- Identify the distribution of your current opportunities based on funnel stage. This suggests an initial distribution of effort among each of the stages.
- Modify this distribution based on priorities like account potential, opportunity size etc.
- Have you been doing work in the right sequence for each opportunity and have you allocated the right amount of time to each of them?
- Task determination workshop
- Universe: find out if it’s a match to your ICP
- Above the Funnel: verify the data suggesting a match
- In the Funnel: Cover the bases
- Best Few: Determine what end tasks are outstanding
- Funnel analysis should be periodic with the frequency decreasing as your sales cycle increases
- Time allocation workshop
VI. From Analysis to Action
19. Your Action Plan
- Action plan is the actions you perform to set the right strategy before a call
- Actions should capitalize on a strength, reduce the impact of a red flag, or both
- Analytical steps
- Define your sales objective
- Specific, measureable, clearly defined time frame
- Buying influences
- Create a box for each type of buying influence and fill them in with at least one name in each box
- Cover each, find a way around blockers. E.g., have a like-rank executive see the economic buying influence
- The response mode of each buying influence
- Highlight discrepancies between reality and goal that accentuate growth or trouble mindsets
- The win-results of each buying influence
- Create a clear win-results statement for each buying influence
- The level and nature of your competition
- Remember: Competition is any alternative to your proposal, including inaction or using internal resources
- Define your sales objective
20. Strategy When You Have No Time
- A long form action plan takes about an hour; many companies use this procedure for accounts valued at more than $100k
- Short form analysis can take as little as 10 minutes
- Do you know who the buying influences are, or at least the economic buying influence?
- Do you know their win-results?
- Can you deliver their win-results?
- Am I capitalizing on strengths and working to eliminate red flags?
21. Strategic Selling: A Lifetime Approach
- Success comes from following a well-defined method and engaging in constant reassessment
Responding to Our Clients’ Most Challenging Questions
- Start a sales process at the highest organizational level where you have credibility
- To tell if a buying influence really is the economic buyer, don’t ask directly if they give final approval. Ask general questions like what is their sales process, who has to OK the funding, and is there anyone else whose approval is necessary.
- It’s important to cover influences who you believe to have a low level of influence. You may be wrong about their low level of influence, their level of influence may change, and if they feel ignored, they may hold a grudge.
- It’s just as important to sell to constituents inside your company who can make your solutions a success for your external customers. Internal constituents have their own win-results to satisfy.
- If a prospect tells you they want a presentation, not a conversation, your odds are bad. You have little to lose so you might as well push to get feedback from them in the first five minutes.
- Closing deals isn’t a result of closing technique, it’s the natural result of a good sales process
- Persistence is worthless unless you start with credibility and you build credibility by following a win-win philosophy
