Sales Strategy From the Inside Out: How Complex Selling Really Works
My Kingdom for Some Clarity – Victor Herstad, Vice President-Business Development, Amstand Companies
Needless to say, Ron Jensen impressed me with his first phone call, when it turned out that he knew more about Amstand than I did. At least, he knew more about the underlying problem that explains why I got this job: the little matter of our lagging organic growth rate, which my CEO, bless his heart, had chosen not to share with me.
But I was even more impressed when I met with Ron. He reminded me of someone. So did his GoTeam sales rep, Carrie Overton, actually. I finally figured out who it was.
About 10 years ago, when I worked for another company, I attended a professional conference that featured a workshop by a highly respected management consultant. The audience was packed with corporate vice presidents and some CEOs from mid-sized firms. I might have been the most junior person in the room. We were at round tables in a big auditorium, eight strangers to a table.
The consultant asked a number of audience members to call out the most pressing “people” issues facing their companies. The responses were predictable: “leadership,” “teamwork,” “communication,” and so on. Then he gave us an exercise: Name your company’s most important problem, then explain to the others at your table how you would know an improvement if you saw it.
The way he actually put it was, “What behaviors would you accept as evidence that leadership (or communication, etc.) had improved?”
There were easily 100 people in the room, but I don’t think more than five of them succeeded. Nobody at my table did. Even those who had been perfectly confident when naming something like “teamwork” as their No. 1 issue drew an embarrassing blank when they tried to explain what it was, exactly, that they wanted their employees to do differently.
‘Labeling an issue is one thing; understanding the issue well enough to do something about it is an altogether different matter.’
The point of the exercise was that labeling an issue is one thing; understanding the issue well enough to do something about it is an altogether different matter.
It was that consultant who came to mind as Ron and Carrie questioned me in an Amstand conference room about “sales efficiency and effectiveness.” They understood from the start that E&E was just a label. Their questions helped me to think through the things that we actually would have to do in order to make meaningful improvements.
‘Their questions helped me to think through the things that we actually would have to do.’
I felt as if a fog had lifted. For the three months I’d been in this job, I had been groping to define the right questions, never mind the answers. I walked out of a 90-minute meeting with Ron and Carrie feeling as if I’d made three years’ worth of progress.
Yes, I’m talking about a couple of salespeople!
Bless Nancy Winslow, Amstand’s sales-support manager, for realizing that the GoTeam folks might be a valuable asset and passing them on to me. If this plays out the way I expect, I’m going to look like a genius. And Nancy knows it. If she were more ambitious—or maybe I should say, if she were a bigger snake—she could have tried to go around me and make this deal her own. That wouldn’t have worked, of course, and Amstand would have lost a great opportunity. Nancy did the right thing by the company. I intend to make sure she’s recognized for it.
Nancy’s enthusiasm for GoTeam had prepared me to expect something more than a run-of-the-mill sales spiel. But what I did not expect when I took the pre-meeting phone call from Ron Jensen was that he would be the one to reveal the true reason for my promotion to this job—the unmentioned problem I had been brought in to solve.
The mystery had nagged at me almost from the start. Naturally, every company would like to maximize the performance of its sales operation. But as far as I knew, Amstand was doing very well. We already own a full quarter of our market, and last year’s growth rate of 11 percent beat the industry average of 9 percent. So why was Stan Hall, our CEO, so concerned with improving sales that he created a new vice-president position, complete with associated overhead costs; paid to move me and my family to the headquarters office; and gave me a great big salary bump?
I was delighted with the opportunity, of course. But I was missing something. On the one hand, Stan made it crystal clear that he wanted big-time results from me. My new job was a do-or-die proposition. If I achieved a significant improvement in sales, my future with Amstand was golden. If I failed, I’d be dead meat. Yet I never quite understood the reason behind Stan’s urgency. That made me nervous. If it’s do-or-die, I kind of like to know what’s what.
Then I got the phone call from Ron Jensen. After introducing himself and discussing his proposed agenda for the needs analysis he wanted to conduct with Nancy and me, he dropped his bomb. He did it so gracefully, though, that I’m still not certain if he knew that he was catching me by surprise.
Ron asked if it would be all right for him to pose a question about Amstand’s performance. Sure, I said.
“Please correct me if I’m wrong,” Ron said, “but I assume that the business issue driving your concern with sales growth is that while your acquisitions are adding significant new revenue, Amstand’s organic or real growth rate is lagging behind the industry average. How important is it to turn that situation around?”
Caught off guard, I tried to cover my confusion. I said something like, “I’m not sure our data would support that conclusion.” That’s when Ron gave me the link to a PowerPoint slide—in the Investor Relations section of Amstand’s own web site—that Stan and our CFO had used in a presentation to analysts concerning our last quarterly report. Once I knew what to look for, the seemingly upbeat slide said it all: Yes, Amstand grew by 11 percent last year, but 5 percent of that growth was due to our most recent acquisition. This left us with a real growth rate of only 6 percent—versus the published industry average of 9 percent.
In an instant, everything fell into place. Amstand’s value-added sales force is not just our major differentiator from low-cost competitors; it is Stan Hall’s own brainchild. He introduced the concept when he got the CEO job 20 years ago, and he has ingrained it into the corporate culture ever since. But our vaunted sales force isn’t really responsible for Amstand’s impressive 11 percent growth rate. The only thing the salespeople can legitimately claim is the sub-par 6 percent rate of real growth.
I’m surprised that the Wall Street sharks haven’t already noticed. Poor Stan must live in terror of the day when they wake up. Because on that day, they will start asking very rude questions about his fundamental strategy. And so will our shareholders.
It wasn’t as if Stan had hidden the situation from me. He just didn’t call attention to it, for obvious reasons. I should have realized this on my own, I thought. After all, the data was in plain sight.
I didn’t actually confirm the sales-growth problem for Ron Jensen. I said something to the effect that the picture wasn’t necessarily that clear and I would have to look at some of our other numbers. Maybe Ron could tell that the problem came as news to me, or maybe he couldn’t. In either case, he behaved as if my discomfort were due simply to the fact that this was sensitive information. He explained that he had not raised the matter in his meeting with Nancy Winslow because he wasn’t sure if she was privy to it or if I wished her to be. The implication: He was sure that as VP of business development, I was in the loop, and therefore he would not be talking out of school by discussing the issue with me. If he was only trying to spare me embarrassment, he did it very smoothly.
‘Ron gave me some questions to think about—things that he would like to address in our meeting.’
Again without admitting that organic growth did, indeed, seem to represent a ticking bomb for Amstand, I thanked him for recognizing that the subject was delicate and asked him to keep it off the table in our upcoming meeting with Nancy. Whatever underlying issues might exist, I pointed out, the solution to them was to improve our sales operation.
“Let’s focus on that,” I said.
‘What levels of improvement would allow us to say that we made a huge difference?’
Ron agreed, and gave me some questions to think about—things that he and Carrie Overton would like to address in our meeting. They were excellent questions. Given that I naturally would want to measure the impact of any solution I might implement, (Darn tootin’, Ron, I thought) we would need benchmarks to describe present conditions. So how did I—or Amstand—currently measure sales efficiency and effectiveness? He also urged me to think about measurable goals for improvement—and to think big. “Once we determine the right metrics,” he asked, “what levels of improvement would allow us to say that we made a huge difference?”
‘What is it that we want to accomplish? How will we know success if we see it?’
At the time, I didn’t connect Ron with the consultant who had impressed me so deeply at that long-ago conference, but maybe that’s when the memory began to surface. The thrust of his questions was tantalizingly familiar: Let’s not waste our time with generic gabble about “maximizing effectiveness.” What is it, exactly, that we want to accomplish? And how will we know success if we see it?
‘You are definitely someone I think I can work with.’
A different thought struck me more clearly: I know you’d like to sell me something, Ron. But you intend to do it by finding a way to turn me into a corporate hero, don’t you? You say you’d like me to envision levels of improvement that would let me claim a “huge difference”? My friend, I don’t know yet what kinds of goods you can deliver, but you are definitely someone I think I can work with.
That impression was confirmed and strengthened when Nancy and I sat down with Ron and Carrie. Before the meeting, I had done some research of my own that confirmed Amstand’s little secret about real growth. To put it bluntly, our value-added sales force wasn’t adding enough value to earn its keep.
I had confirmed my new knowledge with CEO Stan Hall, as well. I presented the growth problem to him, PowerPoint slide and all, as something I had discovered on my own—a reason why improving our sales operations was even more vital than I had realized. Stan just nodded. Thankfully, he didn’t say, “You’ve just now figured this out?”
Since the GoTeam people knew our secret and realized that our sales force wasn’t pulling its weight, I expected the meeting to include an early question about Amstand’s commitment to the value-added sales model. Before analyzing how that model might be improved, Ron and Carrie would need to know whether we intended to junk it altogether and adopt a lower-cost approach. Yet Ron had promised not to reveal the issue to Nancy. I wondered how he would handle it.
He passed my little test with flying colors. Referring only to Amstand’s annual report, which speaks glowingly of our value-added sales force and the competitive advantage it brings, Ron asked how important the model is to us as a differentiator. Hugely important, I told him. Our customers love the attentiveness that our salespeople provide, and they appreciate the consistency of having a rep who calls on them routinely. “We are absolutely committed to the value-added model, from the top down,” I said.
‘Ron and Carrie asked a number of questions that seemed genuinely intended to clarify Amstand’s needs.’
To Nancy, this was unremarkable news. But a significant look passed between Ron and me, and I saw that he had received the message. You and I both know that our sales force isn’t cutting the mustard at present. But we’re going to rescue it, not put it out of its misery. That idea isn’t an option.
Having established this, Ron and Carrie asked a number of questions that seemed genuinely intended to clarify Amstand’s needs, not just to provide excuses for them to try to sell us particular GoTeam products or services. How’s that for unusual? I sensed a system at work and a particular philosophy of selling—Ron and Carrie were too well coordinated to be making this up on the fly—but it wasn’t any system I knew. A term like “consultative selling” wouldn’t begin to do it justice.
‘We talked about performance levels, how to measure them, and what would constitute a tremendous boost in results.’
Their questions actually helped me think through and clarify the grab bag of needs and concerns that fell under the umbrella heading we’d been calling sales E&E— everything from better sales forecasts to getting new hires up to speed faster. We talked in concrete terms about where to find the greatest potential for dramatic improvements. We talked about performance levels, how to measure them, and what would constitute a tremendous boost in results. What would it mean to belt one clear out of the park?
‘Ron and Carrie asked great questions, listened to the answers, and took careful notes.’
Ron and Carrie asked great questions, listened to the answers, and took careful notes. We were in that conference room for an hour and a half, and I doubt they talked for 15 minutes. When the Q&A was over, they told us just enough about GoTeam to assure me that their company had the capabilities and experience to address the kinds of issues we had discussed.
A few of Ron’s questions had been politely designed to gauge my level of buying authority. He needed to know if he really should be talking to Stan Hall. The same thought had occurred to me after Ron’s initial phone call, and I had used my conversation with Stan to clarify – and maybe expand – the scope of my authority.
After establishing that my mission was even more critical than I knew, I told Stan about my upcoming meeting with GoTeam. “I think they may be able to help us with a solution,” I said. “What I need to know is this: If I believe that they’ve got the right answer, how would you like me to involve you in the decision process?”
He took a moment to think about it. Then he agreed to make it my call. If I became convinced that a particular solution was the best way to turn things around in our sales operation, and if the price wasn’t insane, Stan would support my decision and back me in case of resistance from the rest of the executive team.
‘Rather than a formal presentation, he recommended that we treat it as a working meeting.’
So when Ron Jensen delicately questioned my buying authority, I essentially told him that he was talking to the right guy. But as we ended our meeting, his suggestion for a next step was surprising for its insight.
Ron proposed that he and Carrie would come back and present to Nancy and me a solution for our challenges. But rather than a final, formal presentation, he recommended that we treat it as a sort of working meeting. Assuming we were basically happy with the proposal, Nancy and I could tweak and refine it. That way we could ensure that the solution addressed all of our own concerns, and also any objections we might anticipate from other Amstand executives.
I found the idea elegant. Ron’s subtext, as I read it, was this: Victor, you may be the decision maker in this deal, but you don’t need the headaches you’ll get if the other power players at Amstand aren’t happy about some of the changes involved. So assuming you become convinced that we’ve got the right solution for you, let us help you sell it to your own people.
‘If we’ve got the right solution for you, let us help you sell it to your own people.’
That proposal meeting—or dress rehearsal, call it what you will—is set for tomorrow. There is already some positive buzz around the company. Yesterday I overheard our IT director—a computer guy, for heaven’s sake—telling somebody that, “Stan thinks Victor is close to a deal that will take our sales operation to a whole new level.”
Did Stan really say that? I don’t know. And obviously I haven’t heard GoTeam’s actual proposal yet. But unless my instincts are wildly wrong, the sentiment is correct: I think I am just about to light a rocket under Amstand’s revenue growth.