As you may have already surmised, this article intends to sell you something. But before we launch into our pitch, we invite you to pause, take a breath, and envision the sales process.
What first comes to mind and how does it make you feel?
Is it a nostalgic image of a sleek, charismatic man in a suit and tie with a glistening smile and a confident voice? Or is it something a bit less personal, perhaps a sea of cubicles, the muffled hum of a thousand salespeople, each with his or her own headset, a computer, a phone and a list of people to cold call? Or maybe you imagine a corporate sales team walking into your boardroom ready to pitch that million-dollar deal.
If one of the above scenarios came to mind, you aren’t alone. The thing is, “sales” are no longer truly reflected in any of those stock photo images, at least not if you want to be a successful 21st century company. Individual decision-making about buying and continuing to buy something over time has changed dramatically over the past 50 years. Nonetheless, most companies believe that their sales are dependent on one of the three images above.
Over the past 18 years, Vayomar has worked with leading companies around the world and several governments. Today, we want to share three main principles that apply to sales and decision-making. Three ways to reorient your mindset from old to new.
Once upon a time, promises were sold by a door-to-door sales people, who eventually morphed into thousands of people sitting on a sales floor with telephones in hand. Their mission was to close one transaction at a time, and that is how they measured success. Knock on the door or make a phone call, get the customer to give you their credit card details and boom – success. You recovered your investment and added a profit line to the ledger.
If you want to survive the reality of the 21st century and become one of the rare companies to last over 100 years, that way of thinking simply won’t do the trick. Today, success is less about making that single sale, and much more about ensuring the value of your promise over the customer’s lifetime.
Why is this the case? Customers today are increasingly inclined to buy access to products (or services) instead of ownership. Customers do not commit to the product at the time of the sale, instead they sample the product experience to see if they want to keep using it or not. They have higher standards, and they are very much aware of the competition. They can and do make demands, and they do not hesitate to go elsewhere if they are not satisfied.
Microsoft used to sell Microsoft Office ‘95 as a set of disks which you owned and could use forever. You could choose to buy a new version every 2-3 years or simply continue to use the old one. Now Microsoft sells its Office software as a service. You buy a monthly subscription, which allows you to access to the latest version all the time, but it also allows you to cancel the subscription and stop paying at any time.
One crucial thing to bear in mind is that when Microsoft sold you the disk, it recapped its investment and profit in that instant. Now think of today’s model. If you subscribe for one month, then cancel, is Microsoft making the same profit? Is there any profit in short term use? Clearly, companies need to keep users for a long time to solidify their earnings.
While this concept is intuitive for things like software, it can also be applied to other products. For example, in the past, if you lived in a city and needed a car for a few days, just an hour or two per day, you needed to rent a car with a long contract (with lots of fees) or buy one. Today, with just the click of a button, a car from Car2Go awaits down the block from your house for a 1 or 2-day trip, or you can opt for door-to-door ride services using Uber or Lyft.
Or, remember when people ran out to buy their favorite artist’s new album? Today, services like Spotify enable you to add any song you want to any playlist for a small monthly fee. Don’t like the song? Get rid of it. Don’t like Spotify? You can easily transfer your lists to Apple Music or Pandora.
And if you are thinking, “That may eventually be true, but most buyers still want to own stuff,” we implore you to think again. Forbes Magazine has published countless statistics on the rapid market shift. This is just one stat from the mounds of data we found:
“A staggering 74 percent of Americans prioritize experiences over products. The focus on experiences is closely related to the growth of the sharing … economy. Why pay for a taxi when you can meet someone new riding in an Uber? …
Not Just For Millennials
As many Baby Boomers enter retirement, they fall into the “less is more” mentality and put more value on relationships and experiences than things. Clearly, this isn’t a trend that will be going away any time soon.” 1
Furthermore, Gartner reported that:
“By 2020, more than 80% of software vendors will change their business model from traditional license and maintenance to subscription.” 2
The future is access – customers like knowing that they can opt out anytime they want.
So how do you make them lifelong family members?
You’re not closing a deal; you are making a promise
Sales used to be as simple as the transaction itself. It is why any charming and confident salesperson could close a deal. Their thinking was just close the sale and you’re done.
But the nature of sales has drastically changed and making the sale is just the beginning. Your ability to keep your promises of continued value will shape your ability to keep your customers coming back for more. Customer retention will play a major part in determining your company’s long-term bottom line and viability.
So, what do promises have to do with all of this?
Information is everywhere, and customers are making more and more information-based decisions when buying. Put yourself in the shoes of someone that wants to buy a car from Toyota. Do you just walk in and wait to be sold a car? Of course not.
Today’s customers go online and conduct business to business sales (B2B) or business to customers sales (B2C) research for themselves in order to make an informed decision.
“Gartner analyzed 1,100 B2B customers to understand what drives continuing or expanding customer relationships with an existing supplier. The strongest driver of account growth turns out to be the confidence customers have in themselves and their ability to make good buying decisions. Customer decision confidence drives 2.6 times the likelihood of a high-quality account growth purchase.“ 3
A crucial statistic from Podium shows the preparedness and knowledge of consumers:
Before customers buy, they want to know about the product and its value. So they research online. Online reviews give them a sense of whether the product provides the advertised value, and how reliable the product support services may be. Customers who have already bought will actually stay with you and come back again and again, if you meet all their expectations with respect to the sale itself and for the lifetime of the product you sold them. And they will publish and create these expectations with new prospective customers.
Back in 2011, a study across the largest industries found that 40% of people would switch brands based on how easy it is to switch due to technological evolution. Today, that number in the USA and UK is at 70%.4
You need to keep your promises or your customers will find an alternative. If, at any point, you fail to meet your customer’s expectations, switching brands, for example, from AT&T to Verizon or from Amazon Web Services to Go Daddy, has never been easier.
How do you go about keeping your promises? You guessed it… the answer lies in rule number three. It is the hardest change for most companies to effectively make and it is where Vayomar excels.
Building a village – from individual talent to a group effort
You need to transition from the single salesman approach to creating a sales enablement solution that comprises a village of presales engineers, delivery, customer service reps, marketing agents, and mid-level managers to create a circle of trust with all of your customers.
To acquire and retain a new customer, you need to identify the value they are seeking in every interaction for years after they buy your product.
In today’s world, technological evolution and competition move quickly. Products become obsolete at a faster pace, so building your strategy on having the hottest tech on the market on any given day is not likely to meet the test of time.
Team work and sales consulting can play a key role in increasing sales. For example, at Best Buy it is common to find a Best Buy salesperson on the floor assisted by a Samsung technical representative who advises customers who might be interested in buying a Samsung product.
This leads us to our final reason why you need to build a village.
The way you measure success needs to change from counting overall sales or AR (annual revenues) to understanding how to emphasize ARR (annual recurrent revenues). The growth of recurrent revenue can make the difference between closing another round of investment or not, and will be a key factor that drives executive decisions.
They understand a key aspect of Vayomar’s philosophy – Everyone in the company is part of the sales solution, not just the sales department.
Netflix, Spotify, and mindfulness apps, such as Calm and Headspace, constantly engulf you with an invisible team that keeps their product relevant and accessible, while improving your user experience without you needing to ask them for anything. When Covid-19 forced everyone to distance themselves, Netflix’s research showed that people wanted a way to watch programs together remotely. For a short time they offered collective viewing parties to provide their customers with a family experience. It was a heavy financial investment that will see Netflix add to its lifelong family. Within a week, Netflix, because it was a subscription/access based product, was able to push out an update that demonstrated its attention to its audience.
Whether or not they knew it, people felt Netflix was there for them.
The invisible ring of trust is founded in things like UX design, attentiveness to needs (Netflix), delivery method (Amazon), community feel (Calm and Headspace).
This is value realization over the life-time of the product. This is sales enablement.
Since 2003, Vayomar has amassed vast experience as a sales consultant. But while we have seen shifts in the approach to sales, and the incorporation of customer success and other functions in the value chain, we haven’t seen enough of this understanding integrated into sales enablement programs. For this reason, Vayomar has made significant advances in creating Sales Enablement programs that make sure the R in ARR is addressed. We understand how hard this is and we, like Netflix, quickly understood what executives seek and remain attentive to their needs.
We told you we wanted to tell sell you something, didn’t we?
Sales solutions strategies have undergone immense changes over the years, and your company’s approach to sales enablement needs to adapt to an ever-evolving market. You want to ensure your company is ready for the new world of value realization.
These three rules are just the tip of the iceberg. Vayomar will make sure you are ready.
We built our own village, now let us share it with you.