The Four Sales Competencies for Driving Revenue Growth

Posted on September 20, 2023September 24, 2023 by RizAdmin

You are the brand-new Vice President of Sales attending your first executive planning meeting. You swagger into the board room, seat yourself to the right of the CEO at the head of the board table (the position of power), and look around at your colleagues with the confidence that says … I belong here! And you do… you have worked hard, you have excellent credentials, you excelled as a salesperson, and you are ready to take on this new challenge!

The CEO, after welcoming you to the “adult’s” table, then proceeds to lay out the strategic plan that has been underway for 12 months, reviewing the components of the economic engine that are now in place to support a growth strategy that delivers true value to the company. The financial resources have been secured, the operational improvements have been made, the human resource plan is now in place, and the commitment to the shareholders has been made…

The CEO looks your way and announces … “and now our new VP of Sales will outline the elements of the sales strategy to get us there”! And that’s when it hits you … “I need a plan”!

This is the second of a 3-part series examining the key drivers of successful revenue growth that creates real value. In the first part, we looked at the organizational elements required to be in place to ensure that the company can deliver on the promises made by the sales department. We discussed how the resources of the company should be properly organized to deliver on the plan, to maintain balanced momentum as the revenue accelerates.

This time around, we will look at the key sales competencies that our new VP must establish to provide the fuel that will sustain the corporate strategy that represents the number one objective of 66% of all CEOs: Growth!

When it comes to the competencies of a sales team or company, the focus shifts from individual skills to collective abilities and strategies. Here are four key sales competencies that are crucial for a successful sales organization…

Sales Strategy:

A well-defined sales strategy is fundamental to a company’s success in the market. This competency involves setting clear objectives, defining target markets, segmenting customers, and determining the best approaches for reaching and engaging potential buyers. A strong sales strategy also includes pricing strategies, distribution channels, and sales forecasting.

While this sounds like “Sales 101”, it is surprising how many companies identify sales strategy as a major pain point.

89% of small to mid-size companies surveyed** indicated that they struggled to identify how they were positioned within their industry, the strengths and weaknesses of their key competitors, and even their value proposition (more than half of small to mid-size companies reported that they didn’t have a value proposition).

Of course, these are all essential elements of a successful sales strategy.

Sales Process and Methodology:

Establishing a standardized and efficient sales process is essential for consistent results and scalability. This competency includes defining the stages of the sales cycle, creating a structured approach to lead generation and qualification, and implementing sales methodologies that guide salespeople in their interactions with customers.

The sales process is a structured series of steps that a sales team follows to guide a prospect from initial contact through to a closed deal.

Simple right?

Yet only 10% of the companies surveyed stated that they have done an adequate job educating their sales teams on the essential steps.

Sales methodology refers to a systematic approach or framework that guides the sales team in how they interact with prospects and customers throughout the sales process. It provides a set of best practices, strategies, and tactics for selling effectively. Several sales methodologies exist, and organizations may choose or adapt one based on their specific needs, but we will do a deeper dive into these options in part 3 of this series.

At the end of the day, it’s about consistency in the sales process that helps ensure that sales activities are systematic, consistent, and aligned with the company’s sales strategy.

Sales Training and Development:

Investing in the continuous development of sales teams is a critical competency. Providing sales training, coaching, and mentorship helps salespeople acquire the skills they need to excel in their roles. Ongoing development programs also keep sales teams updated on industry trends, product knowledge, and sales techniques.

While this clearly would benefit the salesperson’s ability to close business (also a major bonus to the company), there is the additional benefit of building and retaining a seasoned, experienced sales force. In fact, Forbes magazine recently stated that “skills are becoming the new currency” for hiring and retention.

According to a LinkedIn Learning report, 94% of employees would stay at a company if it invested in their career development.

Data Analytics and Technology:

Michael Dell, the founder of Dell Computers once said “Our business is about technology, yes. But it’s also about operations and customer relationships.”

In today’s data-driven business landscape, companies can and must leverage data analytics and technology to make informed decisions about customers to optimize sales performance. This competency involves using customer relationship management (CRM) systems, sales analytics tools, and data-driven insights to track sales activities, analyze customer behaviour, and make data-backed decisions for improving sales strategies.

Once upon a time, these tools were expensive and limited only to those experts in the IT department with the skills to extract meaningful information from reams of data. Today, advances have made these tools cost-effective and user-friendly to the point that sales teams can effectively track customer interactions through the sales funnel, maximizing the opportunity to close business like never before.

Summary:

Let’s get back to our new VP of Sales and the challenge to develop an effective sales plan to fuel the overall company objective for sustainable and predictable growth! The good news is that sales strategy and technology have advanced to provide the roadmaps and the tools necessary to establish an effective sales strategy for any industry. The key components include:

A documented, well-understood sales strategy
A defined sales Process and methodology
Ongoing sales training and development
The effective use of data analytics and readily available technology

These four competencies work together to create a strong foundation for a successful sales organization. A well-defined sales strategy informs the sales process, and ongoing training and technology enable sales teams to execute that strategy effectively. Additionally, continuous evaluation and adjustment of these competencies are essential to stay competitive in a dynamic marketplace.

Finally, the effective implementation of these strategies is proven to generate positive sales results that meet corporate objectives and allow our VP of Sales to maintain that confident swagger!

** Data compiled from client results from 3,686+ completed SAA 4.0s pre-engagement surveys from 12/1/2018 – 12/31/22. ©Sales Xceleration.

Rizolve Partners understands what needs to be done to achieve sustainable, high-quality growth.
To learn more, check out our process expertise tips sheets here.

What is Pricing Power and How Can It Drive Company Value?

Posted on April 20, 2023May 5, 2023 by donna

Pricing power refers to a company’s ability to set and maintain prices at levels that are higher than its competitors. It also involves being able to do so without losing significant market share.

It is a measure of a company’s pricing flexibility and its ability to capture value resulting in improved profits. This, in turn, also improves shareholder value. Developing pricing power is crucial for companies to drive value and achieve long-term business success.

Pricing power is influenced by various factors including:

market demand,
competitive landscape,
customer perception,
brand strength,
product differentiation, and
overall market dynamics.

When a company has pricing power, it has the ability to set prices strategically, adapt to changing market conditions, and command premium prices. This allows the company to generate higher revenue, improve margins, and ultimately capture a greater share of the value they create.

Here are some strategies your company can use to develop pricing power…

1) Build a Strong Brand and Reputation

A strong brand and reputation can significantly impact pricing power. A well-known and respected brand can create customer loyalty, trust, and perceived value. Customers are often willing to pay a premium for products or services associated with a reputable brand.

Building a strong brand involves consistent delivery of high-quality products or services, excellent customer experiences, and maintaining a positive reputation. Invest in building your brand identity, brand image, and brand equity through effective marketing and communication strategies.

This includes:

creating a compelling brand story,
establishing brand recognition,
cultivating loyalty, and
maintaining a positive reputation through customer testimonials, reviews, and feedback.

A strong brand can justify higher prices, differentiate your offerings from competitors, and enhance your pricing power.

2) Focus on Customer Value

It’s important to effectively communicate the value proposition of your products or services to your customers. Highlight the unique features, benefits, and value that your offerings provide. Use marketing and communication strategies to clearly convey the value of your products or services, and how they address customers’ needs.

Show how your offerings are superior or differentiated from competitors, and why they are worth the premium price.

This can help justify higher prices in the minds of customers and build perceived value, which can enhance your pricing power.

3) Differentiate Your Offerings

One of the most effective ways to develop pricing power is by differentiating your products or services from your competitors. When customers perceive your offerings as unique, superior, and valuable, they may be willing to pay a premium for them.

Differentiation can be achieved through various means, such as superior product quality, innovative features, exceptional customer service, exclusive branding, or customization. Conduct market research to understand customer needs, preferences, and pain points. Then develop offerings that address those needs in a unique and compelling way.

By offering different products or services, you can create a competitive advantage that allows you to command higher prices and develop pricing power.

4) Develop Expertise

Build expertise in your industry or niche and establish yourself as a thought leader.

Customers perceive expertise as a mark of excellence and trustworthiness. When you are recognized as an expert, customers are more likely to trust you and be willing to pay a premium.

This can result in higher prices and improved profits, as customers are willing to pay for the added value and trust.

5) Improve Quality

Continuously improving the quality of your offerings can justify higher prices and create customer loyalty. High-quality products or services are associated with superior performance, reliability, and durability.

When you consistently deliver products or services that meet or exceed customer expectations, it enhances customer perceptions of your brand. Customers are willing to pay a premium for quality as they perceive it as an indicator of value and reliability.

By improving quality, you can position your offerings as premium products or services, commanding higher prices and developing pricing power.

6) Optimize Pricing Strategies

It’s important to constantly review and optimize your pricing strategy to develop pricing power. Conduct pricing analysis to evaluate the effectiveness of your pricing strategy. Evaluate factors such as price elasticity, customer segmentation, competitive benchmarking, and profit analysis.

Test different pricing strategies such as value-based pricing, cost-plus pricing, or dynamic pricing. Do this to determine which approach works best for your business and market. Consider using pricing software or tools to help you analyze data, make informed pricing decisions, and optimize your pricing strategy.

Regularly review and adjust your prices based on market conditions, customer feedback, and competitive landscape. This will ensure that your prices remain relevant and competitive while also reflecting the value of your offerings. By optimizing your pricing strategy, you can maximize your pricing power and drive value for your business.

By developing pricing power, your company can drive value in several ways. It can increase revenue and profitability by capturing higher prices and improving margins. It can also enhance customer perception of your brand, build customer loyalty, and foster customer advocacy. These efforts can lead to repeat business and positive word-of-mouth marketing.

Pricing power can create a barrier to entry for competitors as customers are willing to pay a premium for your offerings. This can help your company establish a sustainable competitive advantage and position itself as a leader in the market.

Overall, developing pricing power requires a deep understanding of your customers, market, and competitive landscape. By focusing on building a strong brand, providing value to customers, and continually improving your offerings, you can create pricing power that drives value for your business!

Rizolve Partners understands what needs to be done to achieve sustainable, high-quality growth.
To learn more, check out our process expertise tips sheets here.

How Do I Grow My Business?

Posted on January 20, 2023February 13, 2023 by donna

How do I grow my business?

Acquiring new customers is a good thing, but growing your business is easier and more cost effective when you increase sales to existing customers.

To accomplish this, strategically focus on your customer relationships and improve the customer experience.

Sounds simple, right?

After all, you’ve already acquired the customer; all you have to do is keep them and expand your working relationship!

But with so much competition vying for “your” customers, you’ll need to work hard to earn their loyalty.

So, instead of jumping to look for new ways to grow your business.. it’s best to start with Growing Your Business by Building, Maintaining, and Improving Customer Relationships.

Here’s how you can make it easier to grow your business through building,
maintaining, and improving your existing customer relationships:

Understand the Value of Customer Loyalty

Research from various sources* indicates it costs 5 times more to convert a new customer than to sell additional solutions to an existing customer.

Furthermore, your probability of converting a new customer may be as low as 5% on average while your probability of selling additional solutions to an existing customer can be as high as 70%.

And yet, too many companies focus most of their time, energy, and marketing dollars on new customer acquisition while taking current customers for granted.

In doing so, they neglect customer satisfaction and jeopardize customer loyalty.

Make no mistake: a satisfied customer is more inclined to be a loyal customer and buy more. This can be true even if the customer sees value – typically economic value – in changing solution providers.

All things being equal, why are customers predisposed to staying put?
Because they know change is stressful. They know change is time-consuming. They know change is harder than not changing.

Nonetheless, if a customer doesn’t feel well-served or appreciated, change becomes appealing.

Ultimately, because your competition is working hard to lure your customers away, you must work hard to keep them. So, read more for some ways to help ensure customer loyalty by building, maintaining, and improving customer relationships.

Know Your Customer and Keep Them Engaged

At some point, by some means, you acquired that customer.
Great!
Now what?

If you focus more on attracting and acquiring new customers, it can be easy to take your current customers for granted. But by ignoring them, it’s also easy to lose sight of what makes your customers unique and important to your company.

To avoid this trap, go back to the basics.

Start with your CRM system. Review your customer information and keep your CRM updated as the relationship unfolds over time.

Refer to your customer data before making frequent customer interactions. Communicate regularly, but don’t rely solely on mass media.

Data confirms that customers love being treated as an individual, not a number on a spreadsheet.

Personalize your communications with direct, one-to-one messaging. Send a handwritten follow-up card. Pick up the phone. Visit face-to-face.

Perhaps most importantly, don’t approach customer interaction as an opportunity to sell. Instead, ask questions. Seek feedback and input. Listen, relate, engage. Have a conversation.

Your customer will be surprised, delighted, and more likely to buy from you again if your goal is to provide value.

They’ll also be less likely to jump ship when a competitor comes calling. Remember, you don’t want your customer to feel like the only time you want to talk to them is when you are trying to sell to them.

Provide Exceptional Customer Service

It should be obvious, but don’t underestimate the value of superior customer service.

Anything less opens the door to a customer defection. Excellent customer service is easier if you are truly engaged because you will know what excellence looks like to your customer.

To deliver superior service, deliver on your promises. Follow through.

Understand that details matter, so make the effort to “sweat the small stuff.”

Hard work? Sure, but it all becomes easier if you adopt a “servant leadership” mindset.

Servant-leaders gain followers, earn respect, and attract success because of their outward focus and a desire to give from the heart.

By adopting this attitude in your sales and customer service efforts, you can turn a strictly business relationship (one that is transactional in nature) to a relationship built on trust and shared goals.

Become a Partner in your Customer’s Success

Customers do business with people and organizations they know, like, and trust.

To earn that trust, you must show you care about your customer and their success.

You must support, you must be a resource, and you must be their advocate!

If you – and your business solutions – can help your customer solve problems, serve their customers, and become a market leader – then you will be more than a vendor; you will be a trusted partner.

And customers are far less likely to abandon a trusted partner, even if it means saving a few dollars.

The Bottom Line

While the value of current customers should be clear, and while the costs of acquiring customers can greatly exceed the costs of selling more to current customers, research has shown that nearly half of companies have a greater focus on customer acquisition while less than one in five focus on retention*.

Chances are, then, you have a golden opportunity – a cost-effective opportunity – to grow your business by focusing on building, maintaining, and improving existing customer relationships.

Rizolve Partners understands the importance of nurturing existing customer relationships to maximize revenue growth while minimizing sales expenses.

To learn more about sales processes that boost company value, download our Sales Process Expertise one-pager here.

* Data compiled by Invesp from various sources.