The New Strategic Selling

The Unique Sales System Proven Successfully by the Worlds Best Companies

About the Author

Stephen Heiman Stephen Heiman became a partner with Robert B. Miller the founder of the company which became Miller Heiman Inc, and which has grown to become one of the largest sales training organisations in the world. Both previously held executive positions with Kepner-Tregoe Inc. They wrote Strategic Selling with the help of Tad Tuleja, and it was published in 1985. This book was in the forefront in promoting nonmanipulative win-win selling, and in 1997 it was completely revised to futher improve and update the contents. It has become the standard sales process text for many of the world's largest organizations.

Author: Stephen E. Heiman Diane Sanchez Tad Tuleja Publisher: Warner Books Date of Publication: 1998 ISBN: 0-446-67346-3 Number of Pages: 448 pages

The Big Idea

The driving force of the Strategic Selling approach is a nonmanipulative selling philosophy. The key to ensuring selling success is to manage every sales objective as a joint venture Sales people must create a framework that fosters a win-win situation; a mutually beneficial transaction where both buyer and seller achieve gains. The New Strategic Selling book works by helping you sort through confusing data and information associated with every Complex Sale; and to give you a reliable method for analyzing the data, for positioning yourself better with your accounts, and for closing business deals.

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The New Strategic Selling by Heiman, Sanchez and Tuleja

Strategic Selling
Successful Selling in a World of Constant Change
Complex Sales The concept of Complex Sales is a primary feature of this book. The authors defines it as: one in which a number of people must give their approval or input before the buying decision can be made. Complex sales are brought about by a bureaucracy that requires many approvals before making a sale. Change and Strategic Selling Change happens in all aspects of corporate business. It can happen in the market, technology, customer base, product line, competitive position, marketing strategy and even organizational structure. With the influx of change, it is required of you to develop specific skills that will lead to reliable selling strategies. Three Premise of Strategic Selling 1. Whatever got you where you are today is no longer sufficient to keep you there. 2. In a Complex Sale, a good tactical plan is only as good as the strategy that led up to it. 3. You can succeed in sales today only if you know what you're doing and why.

Strategy and Tactics Defined

The objective of a good sales strategy is to get yourself in the right place, with the right people, and at the right time; so that you can make the right tactical presentation. Strategy involves all of the processes that you will use to lay out your moves, prior to the sales call. Tactics, on the other hand, refers to the step-by-step process on how to implement the strategy. Setting the Account Strategy: Four Steps to Success 1. Analyze your current position with regard to your account and with regard to your specific sales objective. 2. Think through possible Alternate Positions. 3. Determine which Alternate Position would best secure your objective and devise an Action Plan to achieve it. 4. Implement your Action Plan.

Your Starting Point: Position

In account strategy, positioning is the name of the game. Fully understanding your current position means knowing who all your key players are, how they feel about you, how they feel about your proposal, and all the other questions in relation to the options available to them. Personal Workshop 1: Position This workshop will help you work through the difficulties of your current sales

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situation. It has been designed to identify the causes of your current uncertainty, to help you see how those causes affect your current sales objective, and to allow you to make your account position more visible. Step 1: Identify Relevant Changes. Make a list of all the changes that you feel are influencing the way you currently do your business. Note whether it is a sudden event, a longer process of subtle erosion, or an example of continuous growth. Step 2: Rate the Changes as Threats or Opportunities. Go down your list of changes and put an O next to those you perceive mainly as opportunities and a T next to those you see mainly as threats. Step 3: Define Your Current Single Sales Objective. Write down your current sales objective with regards to the account you've chosen. Current sales objective must be based on specific, short-term objectives. It must be measurable, must focus on a specific outcome, and must be single rather than multiple. Step 4: Test your Current Position. Find out how you feel about your specific chances for making this objective work out. Make adjustments to your strategies as you go along. Step 5: Examine Alternate Positions. Once you know where you are, you next want to know where to go. You need to examine alternatives so that you can discover how you might reposition yourself to make the attainment of your Single Sales Objective more likely.

Your Strategy Blueprint: The Six Key Elements of Strategic Selling

1. 2. 3. 4. 5. 6. Buying Influences Red Flags/Leverage from Strength Response Modes Win-Results Ideal Customer Profile Sales Funnel

Building on Bedrock: Laying the Foundation of Strategic Analysis

Key Element 1: Buying Influences
In every Complex Sale, there are four critical buying roles. The people who play these roles are called Buying Influences or simply Buyers. Understanding these four Buying Influence roles and then identifying all the people playing them with regard to your sales goal is the foundation of Strategic Selling.

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1. Economic Buying Influence. This is the role of the person who gives final approval to buy. 2. User Buying Influence. User buyers make judgments about the potential impact of your product or service on their job performance. 3. Technical Buying Influences. They screen out possible suppliers. 4. Coach. The Coach guides you to your particular sales objective by leading you to the other Buyers; and by giving you information on what you need to position yourself effectively with each one. In every Complex Sale, you have to sell your proposal, not just to one or two people, but to everyone filling the four Buying Influence roles. Sales people must refrain from the assumption that as long as Mr. Big is sold, everything else will fall into place.

Key Element 2: Red Flags/Leverage from Strength

This second element of strategy helps you to identify your positioning difficulties with precision. It has been observed in the program that the sales commission leaders, the people who regularly pull down 200 or 300 percent of their quotas, are those who find the most Red Flags in their accounts. The Five Automatic Red Flag Areas 1. Critical information missing. 2. Uncertainty about information. 3. Any un-contacted Buying Influence. 4. Buying Influence(s) new to the job 5. Reorganization.

Buyer Level of Receptivity

You need to be able to gauge the Buyer's receptivity to your proposals because, without an understanding of this factor, you can easily end up trying to sell to someone who isn't really there. A Buying influence can bring four different reactions, or Response Modes, to a sales situation. Each of these four modes derives from a different perception of the immediate business reality. Each one leads to a different level of receptivity to incoming sales proposals. The strategic sales professional, therefore, has to develop a different sales approach for each of the four perceptions.

Key Element 3: The Four Response Moods

The First Response Mode: Growth The probability of a Buyer taking action in the Growth mode is high. A Buyer in the growth mode is aware of the reality of the business situation and the results that he needs. If a sales person can address the discrepancy between the acknowledged reality and the results desired, then he has a better chance of getting a commitment from the Buyer. Buyers in Growth Mode typically use trigger words like more, better, faster, and

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improved - signals that they are receptive to change. This mode is usually the easiest of the four to sell. The Second Response Mode: Trouble Discrepancy is also present in the Trouble mode, however, it is different from the one perceived by the Buyer in Growth mode. The Buyer in Growth mode welcomes incremental change as a way of improving an already good situation; the Buyer in Trouble mode is begging for immediate change as a way of reversing or preventing a defeat. The Buyer in Trouble mode is ready and eager to buy - but not necessarily from you. The proposal that will be approved is the one that will most quickly remove the cause of the Buyer's perceived problem. The Third Response Mode: Even Keel When a Buying Influence is in Even Keel, your chances of making a sale are low because the Buyer doesn't perceive the essential discrepancy between current reality and desired results. In fact, the probability of a Buyer in Even Keel taking any action is low. The mentality of a Buyer in Even Keel is: Go Away. Don't rock the boat. When a Buyer is firmly entrenched in Even Keel, only three things can raise the probability of your making a sale. The Buyer can see Growth or Trouble coming in, he can be pressured by another Buyer who is already in Growth or Trouble, or you can demonstrate a discrepancy that the Buyer doesn't see. The Fourth Response Mode: Overconfident This is the most difficult of the four Response Modes to sell to. In fact, the probability of making a sale to someone who's in Overconfident Mode is, for all practical purposes, zero. When a Buyer is in this fourth mode, there's clearly a kind of discrepancy between reality and perceived results, but in this case the discrepancy works against rather than for the selling organization. An Overconfident Buyer perceives reality as outstripping the desired results. This person has no incentive to change as the buyer already feels that he is doing better than anticipated.

The Importance of Winning

The Four Quadrants of the Win-Win Matrix Even though both buyers and sellers enter sales encounters hoping that they will Win, that isn't always the case. Every buy-sell encounter can have one of four possible outcomes as represented in the quadrants of the Win-Win Matrix. 1. I Win-You Win: The Joint Venture Quadrant When your Buyers Win, you Win, because you get the repeat business and

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new leads that you're looking for. Serving your Buying Influences' individual self-interests is ultimately the best way for you to serve your own. 2. I Win-You Lose: Beating the Buyer The principal reason why you should avoid playing I Win-You Lose is that the Win-Lose quadrant is short-term and unstable. Given enough time, it always degenerates into Lose-Lose. 3. I Lose-You Win: Doing the Buyer A Favor The rationale behind this approach is that the customer will be impressed with the selling organization's generosity and reciprocate in the future. The underlying problem here is one of perception. When you play LoseWin, you give the customer a false sense of reality, one that is represented falsely as the norm and that can be maintained only on a limited basis Ultimately, the Lose-Win quadrant, just like the Win-Lose quadrant, is unstable. It too always degenerates into Lose-Lose. Therefore, it isn't in your self-interest. 4. I Lose-You Lose: The Default Quadrant This is also called the catchall quadrant because, sometimes well after the final papers are signed, it catches all the sales that you haven't consciously and actively managed into Win-Win outcomes.

Key Element 4: Win-Results

The Win-Results concept rests on the following terms: Selling. Selling is a professional, interactive process directed towards demonstrating to all your Buying Influences how your product or service serves their individual self-interest. Product. A product is designed to improve or fix one or more of your customer's business processes. In Strategic Selling, product is taken to mean either a product or a service whatever you are selling. Process. A process is an activity or series of activities that converts what exists right now into something else. Examples include shipping, invoicing, production, research and development, and quality control. Result. It is the measurable impact that a product has. Results are objective and corporate. Win. A Win is the fulfillment of a subjective, personal promise made to oneself to serve one's self-interest in some special way. Wins are always different for different people. Win-Result. A Win-Result is an objective business Result that gives one or more of your Buying Influences a subjective, personal Win.

Common Problems, Uncommon Solutions

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Getting to the Economic Buying Influence: Strategies and Tactics

The heart of Strategic Selling is managing every one of your sales objectives so that you end up in the Win-Win quadrant of the Matrix with all your Buying Influences. Frequently this proves to be most problematic with regard to Economic Buying Influences, because this role differs from the Buying Influences in two significant ways: 1. Economic Buying Influences are more difficult to identify than the other Buying Influences. 2. Economic Buying Influences are more difficult to reach, both physically and psychologically, than those who play User and Technical Buying roles. In order to efficiently and quickly reduce your discomfort in the face of meeting an Economic Buyer, you need to ask yourself these key questions: 1. 2. 3. 4. What do I need to FIND OUT? What do I want the Economic Buyer to KNOW? What do I want the Economic Buyer to DO? What do I want the Economic Buyer to FEEL?

The Coach: Developing Your Prime Information Resource

The authors stress the importance of developing Coaches to improve your strategic position with the other Buying Influences. The use of effective Coaching can be the difference between a sale that almost makes it to the close, and one that not only closes in your favor but also generates Win-Win sales for you far into the future. Coaches have to be nominated into their position, and then developed as resources for your particular sales objective. A good Coach functions essentially as an information resource. The Coach not only enables you to check the accuracy of the information that you're getting, but also provides information that you haven't been able to get elsewhere. The Three Coaching Criteria 1. Your Credibility. 2. The Coach's Credibility. 3. Desiring Your Success.

What about the Competition?

In Strategic Selling, competition is defined as any alternative solution to the one you and your company are proposing. Types of Competition Buy from someone else. Use internal resources. Use budget for something else.

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Do nothing.

Why Focusing on the Competition Doesn't Work It allows the competition to write the rules of the game. It advertises your weaknesses, not your strengths. It invites price slashing. It makes you look stupid. It deflects attention from the customer's concerns. The Proactive Alternative: Restoring Differentiation The alternative is to think far less about what the competition is doing, has done, or might do, and more about what selling is about in the first place the provision of customized solutions to individuals' problems.

Strategy and Territory: Focusing on Your Win-Win Customers

Key Element 5: Ideal Customer
The Ideal Customer concept's function is to help you in identifying your real best prospects, and in separating them from the ones who will prove to be liabilities. Selling to everyone indiscriminately is bound to create bad matches and bad orders. Judging your actual customers against an Ideal Customer Profile will keep those bad orders to a minimum, and ensure that the bulk of your sales have a Win-Win outcome.

Your Ideal Customer Profile: Demographics and Psychographics

You can make up your own Ideal Customer Profile by analyzing the characteristics common to your current and past good customers. You can use it to test opportunities with your current sales prospects. The Use of Ideal Customer Profiles The Ideal Customer Profile can be used to anticipate problems in your current customer base and as a sorting device. A sorting device will help you cut down on maybe 35 percent of prospects that you probably shouldn't be working on in the first place. This will leave you with a shorter list of prospects but it will be more real. Concentrating on them is what is going to keep you Win-Win. The Importance of Your Psychographics You need to determine which among your customers closely approximate the psychographics profile of your firm. The better the match is, the prospect of creating Win-Win Results becomes higher. The real reason people buy isn't simply that your product or service matches their objective business needs. People buy not only to get Results, but to get personal Wins as well.

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Strategy and Territory: Managing Your Selling Time

Of Time, Territory, and Money
The authors define selling time as any time spent talking or asking questions to a Buying Influence - particularly to uncover a Growth or Trouble discrepancy. Most salespeople are lucky to get five or ten hours a week to devote to this all-important activity. Most top salespeople, in fact, spend only about 5 to 15 percent of their total workweeks actively engaged in face time with their customers.

Key Element 6: The Sales Funnel

The Sales Funnel enables you to use your most precious commodity, your selling time, in the wisest and most efficient manner possible. It will help you to identify the type of work you need to be doing at any given moment on each sales objective, and to bring about a balance among the four types.

Four Parts of Refined Funnels

1. Universe The Universe provides limitless selling opportunities. However, to bring greater success to your selling, you must begin by judiciously restricting those opportunities, focusing only on those that can get you Win-Win outcomes. The kind of work you must do at this level is called prospecting. Prospecting is searching for a fit. At the top of the Funnel, you assess prospects against your Ideal Customer Profile, and narrow the field down to those opportunities that measure up. 2. Above the Funnel In this level you perform a similar task, but on a narrower, more focused basis. The prerequisite for identifying a possible objective as being Above the Funnel is that you have data that suggests a fit not just between your two companies but also between your product or service line, and the prospect's immediate needs. The kind of work that needs to be done on a prospect that's Above the Funnel is to qualify, or verify suggestive data. This can be done by contacting the Buying Influences, including your Coach or Coaches. 3. In the Funnel The prerequisite for placing a sales objective In the Funnel is that you have verified the possibility of an order. This means that you have contacted at least one Buying Influence and spoken to him or her about Growth or Trouble. The kind of work that you need to perform in this part of the funnel is to cover the bases. This entails using all the Key Elements of strategy. 4. Best Few The prerequisite for placing a sales objective into the Best Few category is that you

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have all but eliminated luck and uncertainty as factors in the final buying decision. In Best Few, there is at least a 90 percent probability that you'll close the order in one half or less the time of your normal selling cycle.

Priorities and Allocation: Working the Funnel

Your ultimate goal in using the Sales Funnel concept is to be able to move your various sales objectives down the Funnel at a steady and predictable rate, so that your income is also steady and predictable. This can be done by: Setting appropriate priorities for the four kinds of selling work that needs to get done. Allocating your limited selling time so that these four kinds of work always do get done, on a consistent basis.

Roller Coaster Effect: Cause When you consistently put off your prospecting and qualifying work, it becomes the kind of work that never gets done. So by the time you finish closing all your Best Few and In the Funnel sales objectives, the top of the Funnel has run dry. The Dry Funnel Syndrome and the Roller Coaster Effect are two unwelcome metaphors in the sales world. Roller Coaster Effect: Solution The right way to deal with the Roller Coaster Effect is to arrange your work priorities in such a way that you never experience a dry quarter or a dry Funnel in the first place. You can follow this priority sequence: 1. 2. 3. 4. Do closing work on your Best Few objectives. Prospect by narrowing the Universe. Qualify your Above the Funnel objectives. Work the objectives in the Funnel.

From Analysis to Action

Your Action Plan
In drafting a list of practical actions to improve your position, the emphasis is on practical. You want to be sure that each action you adapt moves you closer to attaining your objective. Putting the Theory into Action With your Alternate Positions in hand, look at your current position with regards to each of the Strategic Selling concepts. Focus on these areas and try to uncover Red Flags, and then consider which actions can turn them into opportunities: Your Single Sales Objective. The Buying Influences involved in that objective. The Response Mode of each Buying Influence.

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The Win-Results of each Buying Influence. The level and nature of your competition.

Strategy When You Have No Time

Here is a two-part solution that will help you to determine how to give the appropriate amount of advance planning to each sales call. 1. Determine which accounts and which sales objectives really call for a long form Action Plan and give them the hour that they deserve. 2. Adopt a short form action analysis for those sales objectives and those upcoming sales calls where conditions don't allow for the extended treatment.

Strategy Selling: A Lifetime Approach

Strategic Selling is successful because it reduces the uncertainties associated with luck, trial and error, and blind chance. It works effectively because it is founded on logic and on sound understanding of all the Key Elements of the Complex Sale. By applying the methodologies consistently, you make your own luck. There are two critical keys to a salesperson's success: 1. Method. Strategic Selling professionals approach their sales with a planned system of selling steps that are logical, visible, and repeatable. 2. Constant reassessment. Change is the only constant in your Complex Sales. You can be undermined by change only if you fail to adapt to it. You'll get the most out of Strategic Selling if you treat it as a dynamic system - one that's always in the process of refinement.

Lifetime Approach
Strategic Selling is a lifetime approach to the Complex Sale. As you continue to apply and refine this model in future sales efforts, increasingly you'll be able to say, It's the way I go about it that makes me number one.

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