How to Increase Sales & Propfits when Customers are Cutting Their Budgets
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Hi!
With the under-performing markets in the US and Europe this year, multinational companies have put heavier emphasis on business performance in their China and Asia-Pacific markets.
However, even here in China and Asia-Pacific, customers are
either cutting their budgets, or they are postponing their
purchases till a later date.
If they are spending any money, they are getting a lot more
cautious and stringent.
Hence, this
all makes selling in China and the Asia-Pacific region a lot
more demanding than what it used to be. While this region
may still be growing, making sales here today requires totally
different mindsets and skill-sets to increase sales and profits
when customers are cutting their budgets.
We'll find out in this month's topics:
-
How to Increase
Sales & Profits when Customers are Cutting Their Budgets; and
-
How Great Leaders
Motivate Their Teams during
Tough Times
This issue's main article is on "How to Increase
Sales & Profits when Customers are Cutting their Budgets", and
we explore what companies need to do when faced with customers
cutting budgets across multiple regions and industries.
In brief:
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How to Increase Sales & Profits when Customers are Cutting their Budgets
by c.j. Ng and
Asia Leap
In
a recent research by
Huthwaite, customers are
increasingly becoming a lot more cautious and stringent in their
purchases due to the uncertainty surrounding Europe and North
America.
In the research, the top 5 questions that business leaders ask
themselves are:
-
Are there other places to cut costs
that we haven’t identified?
-
Can we hold off on spending what we’ve
budgeted for at least for another quarter?
-
Can we get by, for now, with what we
already have?
-
Where do we need to focus our energies
to increase revenues quickly?
-
We have to make investments, but can
we balance that against revenue?
What is not part of this research is if these companies are
making money. Well, a search on Google shows some
conflicting pictures:
-
On 22 Jun 2012, the
Business Insider reported
that "Corporate Profits Just Hit An All-Time High, Wages
Just Hit An All-Time Low", BUT then;
-
On 8 Jul 2012, the
Huffington Post reported
"Corporate Profits Likely To Fall After Three Years Of
Breaking Records"
Whether profits are falling or not, one thing is
certain. Companies are still making money. So if
they are still making money, why are they cutting down so much
on all kinds of purchases and investments?
That's probably because of uncertainty. In fact, so
uncertain is the economy that there are reports that corporate
profits rose 1.2% in Q2 2012, while there are also reports that
showed profits dropped by 1.2% in the same time period.
It seems like no one
actually know if the company he/ she works for will be making
money or not by the end of the year. It may also seem that
no one can be sure if he/ she can still have the same job by the
end of the year.
Hence, when
things have become as uncertain as it is right now, many
companies chose to stop buying or delay their purchases
(especially new purchases) indefinitely, unless it's a proven
must-have.
Selling Mission-Critical Must-Haves
Hence, if we are able to understand customers' preference to
buy nothing else except the must-haves, then we can look
into what are some characteristics:
-
Price does NOT matter
as much as performance, when it comes to
mission-critical must-haves. Customers simply
choose to buy if they deem your products and services to
be suitable, or they simply choose not to;
-
Customers don't just buy a
mission-critical must-have from anybody,
they only buy from trusted sources
who will put their customers' interests first.
Customers would have to trust both the company AND the sales
person whom they buy from; and
Customers will spend a lot
more time, resources and manpower to evaluate possible
solutions before deciding on a purchase. They could
eventually come to the conclusion that your products and
services are NOT must-haves, and hence decide not to buy at
all.
As such, sales organisations and teams would have to adjust
to new market realities. This is especially more so in
China and the Asia-Pacific region, where sales from this
region are expected to make up for the short-fall in profits
of other regions. Some of the changes in mindsets and
skill-sets may include:
-
A shift
of focus on matching existing products and services to
existing customer needs, to focusing on understanding
customers' emerging and potential needs, and then come up
with the right customised products and services to fulfill
those needs;
-
A shift
of focus from shorter sales cycles that is managed primarily
by one sales person to longer sales cycles, with a lot of
support for the sales person from various departments and
levels within the sales organisation; and
-
Yet, while the
challenges faced by sales organisations and teams might
be unprecedented, the concepts behind what sales teams
and sales people can do to overcome such challenges have
been around for decades.
Sales
people and managers have been going through numerous
hours of training in these concepts, but somehow few
have applied successfully, and even fewer sales
organisations have undergone any form of transformation.
Transforming Your Sales
Force to Win Over Customers
To change a sales person's way of selling, the entire sales
organisation has to change. That includes the supporting
functions such as finance, supply chain, production etc., who will
need to be more proactive in supporting the sales team to win
customers. This will also mean that traditional reactive, back-end
customer service and sales administration may be required to move to
the "frontlines" to pro-actively serve and understand customers.
Now that we
know why we must change, and what to change into, we now turn over to our collaboration consulting partner,
Asia Leap who has recently worked on real cases of sales teams in China and Asia-Pacific transforming to meet these new challenges successfully::
Case 1: Multi-National Corporation (MNC)
in the Chemical Industry
An MNC in the chemical industry is facing new expectations for market expansion and revenue growth in the next few years. Its management knew that in order to to achieve the goals, the sales force in Asia had to be aligned and ‘in-tune’ in mind and performance. Thus it was essential to transform the sales force from a passive, reactive mode to a pro-active and spontaneous mindset.
Supervisors and supporting functions also needed to ‘step-up’ to support the sales force in development. Blended learning methodology was used in the design of the development, which lasted 18 months. It comprised of modular development with assignments in between the modules. In each module, tools and facilitation of personal leadership awareness, sales techniques and mindset adjustment were experienced by the participants.
The supervisors of the participants, became their coaches during the period. They were tasked to follow-up with participants after each modular development, to reinforce learning applications immediately on the job.
At the end of the development, both management and participants saw that the development provided ROI in several areas -- positive mindset shift, application of learning, team collaboration and contribution to better performance on the job.
Case 2: IT Multinational
At the beginning of this year, a sales team overseeing sales in several Asian countries to small and medium sized companies began their transformation to match the growth needs of the region. To meet the new market growth of the region, the sales team transited one of its team from a background sales support function to a frontline sales role. It was desirous of having team development, to orientate and equip the team with awareness and changes to make in mindset and skill-set.
The development process designed targeted the ‘soft’ areas of the team -- mindset, understanding of team members and skill sets. The process did not address the structural issues, but rather, built on what was already present and reduced the need to create more new things for the team to restart learning altogether. The organization also extended the development session to include selected distributors as a value-added and strategic relationship-building initiative.
The team underwent a modular based development, focusing on mindset, self-discovery, the sales sales cycle and understanding what the market needs. After 2 modules so far, the team and its leader applied the various skills learnt immediately, some of which were quick and easy to implement. To date, the team has exceeded targets for the past 2 quarters, surpassing their revenue targets by an average of 35%.
Generating Sustainable Great Sales Performance
This is not the end yet, as far as the transformation of
your sales team is concerned. Other areas that
some of the leading companies have already implemented
include:
-
Ensuring that the younger, newer sales people can stay
in the organization, transit and learn from the more
mature sales members in the company;
-
Learning from and avoiding the past mistakes that
companies had committed in their sales team development;
-
The key elements to formulate an effective sales people
development strategy beyond the short term, so as to
take a long term perspective, etc.
In other words, while the challenges could be tough and
unprecedented, the concepts of how we could all over come such
challenges have been taught in many
sales training programmes for
decades, but then again,
sales training could sometimes be a waste of
time and money if the trainees don't apply what is learnt.
The cases that we have showcased
here points to a path where the entire sales organisation buys in to
the transformations that are required of them, and all levels and
departments work together to implement an sustainable sales people
development strategy
that increase sales and profits even when customers are cutting
their budgets.
Need help in
formulating your sales people development strategy, so that you can
increase sales and profits even when customers are cutting their
budgets? Simply e-mail
info@directions-consulting.com or
alex@asia-leap.com or call +86-136 7190 2505 or Skype:
cydj001 and arrange to buy me a mocha. All information
shall be kept in confidence.
Power Breakfast Hour: 21 Sep 2012
How to Increase Sales & Profits when Customers are Cutting their Budgets
-
What changes sales teams and sales people must make
when customers choose to buy ONLY the must-haves, and
nothing else;
- What are the growing trends in sales
teams development in this region, and what are the implications
for companies, business leaders and HR;
- How do we ensure that the younger, newer sales people can
stay in the organisation, transit and learn from the more mature
sales members in the company;
- What can we learn from past mistakes and implement an
effective and sustainable sales strategy to meet challenges in
the market;
- What are key elements to formulate an effective sales people
development strategy beyond the short term, to take a long term
perspective
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Tips for Managers:
How Great Leaders Motivate Their Teams during Tough Times
By Mark Murphy
Founder and CEO,
Leadership IQ
Edited by c.j. Ng,
Master Trainer, Asia,
Leadership IQ
Every organization is going to go through tough times, but it doesn’t have to be a cataclysmic tough time to want to know how to keep people energized and engaged. It could be a restructuring, it could be a new change initiative, or you could be implementing a major IT system. It doesn’t have to be a major recessionary period or giant merger; it could be something smaller. Whatever the situation, any time there is stress it is going to impact the organization. It doesn’t have to be a giant stressor for people to feel it as stress.
We conducted a study that found that the tougher the times get, the more unproductive people become. Specifically, we studied about 6,400 people. We measured them over the course of several years, both in good times and bad times, and looked at how much time they were wasting per day. Because we’re a research company, people trusted us and were very honest about how much time they wasted. We found that when times were good (according to the general economic state), and people were feeling more optimistic about things, they were wasting a smaller amount of time per day.
However, when times got stressful (in our study it was a negative change in the overall economic climate) the amount of time people were wasting per day went up by about 44%. The more people were stressed about the world around them, about whether or not they were going to have a job, make their mortgage payment, if the country was entering a recession, the more time they wasted thinking about the bad things in the world.
During tough times,
71% of managers say, “I am communicating confidence in my people. I am communicating to them that I know they can overcome this.”
While that is good, the problem is that only 18% of their employees say that the manager is actually communicating those expectations.
Keep that in mind, most managers are better at communicating negative feelings than positive ones. And, most managers and leaders don’t do enough checks as to the message they think they are communicating and also what message is being received. That’s the subtle twist to this. It’s one thing for you to assess yourself; it’s another to ask whether that message is being received in the way you intend.
Here’s another self-test you can do on the “me” side of
the equation. These five questions tackle our mindset or
predisposition to want to acknowledge that tough times
exist, but still approach it with confidence and hope.
-
Do I get excited when people rely solely on me to get things done?
-
Do I believe that I have control over my professional success?
-
Do I believe that a problem has at least one solution?
-
Am I known for challenging the status quo?
-
Do I get excited when I’m given a really difficult problem to solve?
These questions start to get at whether or not we embrace tough times, do we acknowledge it, and does it excite us? Does it make us feel good? Do we see this as a wonderful opportunity, or do we look at this as an inherently bad thing?
Another critical and related issue is how we’re setting targets, and how we’re setting the goals that we’re going to need to overcome these tough times. We’re not just going to sit back and let the tough times wallow all over us. We’re going to figure out how to divvy up our work and break it into bite sized chunks so that we can get things done and overcome these tough times.
People tend to get motivated by goals that have a roughly 50/50 chance of success. If you give people work that is too easy, not challenging enough and with a high chance of success, it’s not very motivating because achievement is a foregone conclusion. By contrast, if you give them something that overwhelms them so much, with something that is so hard to do and requires so much work that there is no chance that they can
complete it and has only a 10% chance of success, then that also isn’t motivating because failure is a foregone conclusion.
One of the things that happens when we go through tough times is we start to see some people reacting with denial, some start blaming each other, some make excuses, some get anxious, some freeze, and some (a smaller number) become accountable. We have to deal with this and can do so with conversation. Leaders have a huge impact on the extent to which folks embrace accountability. But, we do need to understand that there tends to be a very natural staging and system of reactions as we go through tough times.
Ultimately, as leaders, we’re going to have four simple conversations that can help people move through these various phases. As long as you understand that this is the basic flow that people will often work through. In other words, not everybody is going to start at denial, some may start at excuses and work their way up. Some may start at anxiety or blame. But, as long as we understand that this is the basic flow, and you are going to have people in each of these categories, you can handle it when you hear denial, blame, excuses, etc.
One other key point about this, and that is that the reason we’re going to have these conversations, and the reasons we’re going to tackle this biologically, is that behaviour drives attitude.
It is going to be very difficult for you to change the attitudes of the people around you. What you can do, however, is change your behaviour and change their behaviour by changing the dynamics in the conversation. This is where attitude change comes from. You’re not going to climb inside their head and magically alter their personality. But, what you can do is change some of the language you use to begin to have a radical impact on their attitude because what you are doing is, by de-facto, altering and changing their behaviour. That is what’s going to ultimately change their mindset and make them much more comfortable and able and accountable and much more ready to deal with the tough times around them.
If you would like to get the eLearning material on "Motivating during
Hard Times " and 39 other eLearning topics by
Leadership IQ, you can
e-mail
info@directions-consulting.com or
call +86-136 7190 2505 or Skype:
cydj001
About
Directions Management Consulting
Directions Management Consulting is the partner of
LeadershipIQ in China and Asia.
LeadershipIQ helps more than 125,000 leaders every year through the facts drawn from one of the largest ongoing leadership studies ever conducted is used to help companies apply resources where the best possible results be achieved.
In addition, Directions Management Consulting is a leading provider of sales performance, innovation and experiential learning solutions in China and many parts of Asia.
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is the sales performance arm of Directions
Management Consulting specialising in conducting training, research
and consulting services for sales managers and their team.
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Through collaboration with consultancies such as
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Corporation,
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de Bono
China,
ProWay etc., the consultants in
Directions Management Consulting have served clients such as PwC,
Air Products, Evonik, Wacker, Epson amongst others.
Directions Management Consulting will increase its efforts
to conduct leadership studies in China and other parts of Asia, so that more companies apply resources where the best possible results be achieved
in this part of the world.
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