In this episode of the Voice of Value podcast, Frank Cespedes, Senior Lecturer at Harvard Business School and author of Sales Management That Works, discusses the changing landscape between buyers and sellers, the need for massive transformation in sales training and performance coaching, and aligning with customers on unique value creation.
[1:50] – Frank analyzes the widening disconnect between buyers and sellers.
[2:50] – Frank notes that “what is going on in sales is a sustained data revolution.” One big reason we have a disconnect: data has been empowering buyers more than sellers.
[3:27] – The other reason we have a disconnect between buyers and sellers: the way sales is managed.
[3:40] – What is “big casino” and how does a sales rep hit “big casino?”
[4:15] – The majority of sales incentive compensation systems are centered around volume, not profitability or gross margin, or any other metric. This tells the salesforce to “go forth and multiply.” There is no such thing as a bad customer with this incentive in place.
[5:01] – How do you hit “big casino” with an empowered buyer now?
[5:30] – The basic truth about the business world that Frank has found even the best executives lose sight of—specific customers buy and their sense of value varies.
[6:29] – Why a great disruption in sales training is inevitable and how digital coaching tools will become more relevant.
[8:29] – Failures of the current sales training model and the issue of how sales training money is spent.
[9:00] – Most salespeople who go through classroom training, forget over 80% of the information within 60 days.
[10:07] – “More than 50% of college graduates, no matter what their major is, will wind up working in sales at some point in their career. Most salespeople join the force completely unprepared.”
[11:13] – Tech is your friend: how digital tools can multiply sales training effectiveness by up to six (!) with a video component.
[12:15] – Frank’s keys to becoming a better and more effective sales coach.
[13:40] – “Doing good performance evaluations and coaching is not metaphysics. It’s not higher-order physics. It is a very trainable skill.”
[14:04] – Channeling a podcast listener, a sales manager, and workshopping how a sales manager can improve sales training and performance issues on their team.
[16:19] – Why we’ll never escape performance reviews.
[17:10] – So many sales managers do ‘drive-by performance reviews” that are not about coaching or improvement, but instead compensation discussions.
[17:37] – Anatomy of a great performance review.
[18:25] – What is good coaching about? All good coaches coach to the situation instead of simply saying “sell more.”
[20:16] – How value is being created and destroyed in customer conversations.
[21:21] – The issue of the legacy inertia that’s built into those customer conversations and understanding how those conversations have changed.
[22:47] – Frank explains what his case studies and research have taught him about the tricky process of value creation.
[23:48] – How you ultimately create value in two ways.
[27:23] – Frank talks about pricing in the new world and the old world of selling, “In both worlds, pricing is the moment of truth in business.”
[27:45] – “Price is where you test the coherence of a value proposition, and for that matter, the coherence of a business strategy.”
[28:34] – Emerging subscription business models of the Internet Age come with their own pricing pitfalls.
[29:50] – Avoiding pricing pitfalls through joint understanding and clarification on what the customer values.
[32:20] – Understanding and agreeing upon the unit of value for each customer is a basic fundamental.
[33:18] – What trends in e-commerce amid the pandemic imply about the importance of multichannel capabilities.
[35:27] – “This is not a digital eats physical world. This is a digital and physical world.” How we ought to rethink sales training and coaching in a multichannel world.
[36:33] – Today, almost all sales take place across channels and across job functions, with technology in a key enabling role.
[37:50] – 95-99% of sales are still made in dealerships, while the average car buyer spends almost 12 hours researching their future purchase: sales tasks have changed dramatically because the customer now knows the product.
[39:09] – Sales is more than just sales—it goes beyond the sales function. Changes in sales require better coordination between sales and marketing.
[40:14] – Frank details a social issue he believes many businesses currently face: a lack of understanding in the C-suite of how the levels below them actually function, particularly sales’ daily activities.
[41:40] – More people than ever before have made it to the C-suite without ever being a part of business development. These individuals are simply out of touch and overly specialized.
[44:20] – Sales leaders: prepare to leverage the coming future by growing your understanding of each line of each financial statement and by keeping up with what your customer values today. There is an increasing need for financial acumen.
[46:34] – The best advice Frank ever received? “Before you ever meet with a senior executive, go out and travel with a few salespeople.” Often, this will give you an inside perspective on challenges and issues and all you are doing is something that the executive has not done in many years. “A desk is a dangerous place from which to watch the world.”