Who knows where the next good idea may come from?
Last week I wrote about the rare and valuable intrapreneurial sales professional. One of the defining features of ISPs is their ability to generate insights and capture new value. Just like entrepreneurs, the first quality that most people think of when they describe them is their ability to generate good ideas, maybe because they see things that others don’t.
In the next article of this series, we will see that the ability to think of good ideas may be the least important factor in intrapreneurial success, but you do have to start somewhere; you can’t grow a tree without a seed.
So, how does the would-be intrapreneur find ideas?
Salespeople are in a great strategic position to know what’s going on outside and inside their own companies. On the outside, they spot ideas by being creatively dissatisfied with the status quo, or productively paranoid, if you will; by listening closely to customers without relying entirely on what they say they want and need; by constantly asking questions such as these:
- What else can we do for the customer?
- How can we improve the results they get from doing business with us?
- How can we improve their experience of doing business with us?
- What could cause us to lose this critical account?
- Why are we not doing business with customer X?
- If we lost this customer today, what would we have to change to get them back?
- Why do we do things this way?
- Why don‘t we do things that way?
- If I got a job with our biggest competitor, how would I steal this account?
But of course customers are not the only source of valuable ideas, which is why successful intrapreneurs also stick their noses into areas within their own company where they don’t belong. They find out what’s going on in R&D and Marketing and anywhere else there might be good ideas. They’re the ones who seem to know everyone else in the company and they seem to be the first to know the latest gossip and major news before it’s officially announced.
Finally, since one of the best ways to generate new thinking is to connect ideas from unrelated fields, intrapreneurs are curious about everything else outside their own and customer’s circles. They read widely, talk to a lot of different people, and pay attention to the world around them, to the economy, and to their own industry.
In short, sales intrapreneurs are curious, imaginative, and paranoid. But that’s just a start, as we’ll see in the next article in this series.
Got any new ideas for sale?
I’ve had the privilege of working with many outstanding sales professionals in my years of training, but the ones who stand out are the sales intrapreneurs, those who go above and beyond consultative selling to create and deliver superior value to their customers and their own companies.
We admire the consultative salesperson. Regardless of whether you call it consultative selling or challenger selling or something similar, it’s seen as the pinnacle of sales professionalism and skill: the valuable elite who create value for their customers by going beyond what they want or think they need; who solve problems the customers don’t yet know they have; who bring new ideas and insights to improve their business.
But, as important as consultative selling is, it still carries an important limitation. It implies a one-way flow of information: the seller has superior insight and knowledge and imparts that to the buyer.
But the extensive sales literature seems to overlook the fact that customers may just possibly be as smart as we are, or might have a bit more insight into the problems than we give them credit for. They may actually know about needs that we’re not aware of.
Or sometimes during the creative exchange of ideas between buyer and seller a need emerges that the seller is not prepared to fill. Maybe they don’t offer the right solution, or maybe because it’s a newly discovered need the solution does not even exist.
What happens in that case? Does the salesperson wish the customer good luck with their problem and just walk away? That would be the prudent thing to do; why spend time chasing something that doesn’t exist?
But while it may be prudent in the short term, there are two problems with walking away. First, once a need is known somebody will eventually figure out how to fill it and steal your customer. Second, there is a lot of value that is being left on the table.
Enter the intrepreneurial salesperson, the rare individual who refuses to accept the risk and cost of walking away from the customer’s needs. The intrapreneurial salesperson turns his or her consultative skills internally, brings fresh and challenging insights to management, acquaints them with undiscovered problems or opportunities, develops internal champions, and agitates for change. The intrapreneurial salesperson thinks and creates.
They work just like an entrepreneur, the person who sees a need and finds a way to fill it by creating the right solution. Intrapreneurs do the same thing, but do it within their own company. Entrepreneurs work for themselves, but intrapreneurs work for their employers. They work internally to develop new products, services, processes, offerings, and capabilities, which remain the property of the company they work for.
Keep in mind that a sales intrapreneur is not just resourceful. There are salespeople who know how to get things done internally for their customers, such as pushing up delivery dates or securing sale engineering resources. That’s a great talent to have, but it does not make one an intrapreneur. Intrepreneurs create something new.
When they succeed, they may simply win a difficult deal, which is a good thing. Or, as in several cases I’ve seen, they may even create a whole new product category or market, which is a great thing.
Every intrepreneur, regardless of their function within a company, is a salesperson—they have to be, to get their idea accepted—but remarkably few salespeople are intrapreneurs. We’ll look at why that is in the next article in this series.
Let me tell you how great I am.
If I had seriously begun this article with that line, would you have kept reading?
Hearing people speak about their core competence is like listening to the boring high school friend who can only talk about how great he was back in the day. No one listens, no one cares, because it is totally irrelevant to their lives in any way.
So, you’re very good at something; so what?
People don’t care what you do; they care what you do for them. The only reason your company even exists to be in position to develop a core competence is to make a contribution to customers in some way. No one cares how good your mousetrap is if they don’t have mice, or if the one they have works well enough.
Remember the old saying that an expert is someone who learns more and more about less and less until finally he knows everything about nothing? Although not as extreme, that’s the risk you run into when you focus exclusively on your competences and not your contributions. Focusing on core competence keeps you looking internally, but needs exist externally.
You have to keep looking externally to stay you grounded in economic reality. For example, Sony still puts out excellent products, but it is a shell of its former self because it has not kept up with what consumers want and how they buy. Contributions keep you relevant, so that people want to hear what you do. If you can talk about that first, they will want to know more about your core competence.
So why not start with that—instead of talking about how great you are, why not talk about how great you can make your customer? Core competence focuses on how you do things, but the why always has to come first. The most important question, as Niraj Dawar reminds us in his book, Tilt: Shifting Your Strategy from Products to Customers
What do you contribute to your customer’s business or personal bottom line? What do you contribute to improve their personal experience? Do you make them more profitable, do you make them look good, protect them from harm or risk, make their lives easier?
When people ask you what you do, they are just following social conventions, but that’s not really what they want to know. The urge to be polite prevents them from asking what they really want to know: “What can you do for me?”
So, next time someone asks you what you do, save them the trouble and answer the question they wanted to ask.
I had to learn that message myself. For years, when people ask me what I do, I would answer that I am a corporate trainer. Now, I tell them that I make people more persuasive. It definitely makes for longer conversations!
While it may seem obvious enough that you should always strive to realize the highest possible price for your products, a closer look at the problem quickly shows why it’s absolutely critical to your company and to you as a salesperson.
Economics: In many industries, price discounts of 15-20% are common in order to win business, so a difference in just 1% of the selling price does not seem to be that important. However, let’s take a look at the effect this trivial difference can have on the company’s bottom line. As an example, suppose a company has a net profit before tax of 5% of sales. A 1% difference in the selling price will have a 20% impact on profits!
Let’s apply this analysis to your own company.
1. What is your net profit before tax, as a percentage of revenues?
______________________
2. Divide that number into 100:
______________________
3. That is the multiplier impact that a discount of 1% has on your firm’s profits.
In case you don’t like doing simple math, net profits of 10% means that every percentage of price discount is multiplied ten times. Net profits of 20% means that every percentage is multiplied five times, and so on.
If you follow the logic, then it would seem that companies that regularly discount 15-20% would never make money. The reason that’s not the case is that those discounts are already factored into their profit structure. In that case, you can use the calculations above to see what the positive effect is of getting a premium.
The good news is that in that case, being able to justify a 1% price premium will make a 20% impact to the bottom line.
Besides this immediate, leveraged impact that a price cut has on profitability, proper pricing is also essential for any salesperson looking beyond just this quarter’s quota. A price cut may help close business today, but it only makes future sales even harder, because of the effect it has on your buyer’s behavior:
Reinforcement: It is human nature that behavior which is rewarded is reinforced and repeated. When your buyers ask for price discounts and you oblige, you are reinforcing an escalating series of future discount requests in the future.
Signaling: Secondly, think carefully about the signal that price sends to your customers. In products that are difficult to evaluate before purchasing, prince is one of the most significant cues to the quality. When you lower your prices, what signals are you sending about the quality you offer and your confidence in it?
Trust: Backing off your price demanded at the late stages of the sales cycle may contradict everything you had previously said to the buyer during the sales process. They will not trust your words in future sales.
Relationship: Customers who switch to you because of price will leave because of price. The length of the relationship will be taken out of your control.
In a previous article, If It Was Easy, Anyone Could Do It, we focused on how doing the hard work to justify a higher price can actually make your customer better off. As you can see from following the math, it has a huge impact on your own company as well.
