September 1, 2016
Musk deer are an endangered species as a result of extensive hunting through the earlier half of the twentieth century. Hunters made fortunes off their musk glands—a source of perfume and medicine. It is rumored that the male musk deer, which possesses the gland, is so mystified by the aroma that it roams the woods in search of it, never realizing that the source is within. Poets and philosophers have used the example of the musk deer to remind people that looking inward can often yield the best answers.
Psychologists refer to this as having an “internal locus of control.” Organizational and business strategy are closely linked to this concept of locus of control. Is business growth really dependent on acquiring more capital or new employees who can help develop new products / bring in new customers? In many cases, companies can simply look within their existing system to unearth profits that were previously unknown and hence invisible.
The success of this inward-looking strategy for improving company profitability is dependent on first developing an in-depth understanding of profit/margin performance across existing deals. The company must then use these insights to create profitable quotes and enable Sales with the background data needed to win deals.
Here are some of the ways in which companies can help Sales close highly profitable deals:
Provide Real-Time Price Guidance and Quote Performance Scores
When sales reps start building the customer quote, provide a range of options to help them create the quote faster. This also helps visualize how the quote is performing against the optimized price. Anything that falls below it could have low scores. Use a color-coded system to warn them that additional internal approvals may delay their quote. The goal is to make the entire process of creating the quote easier, faster, and transparent.
Enable Them with Market Insights and Background Data
Every sales rep will agree that it helps to know things like the customer’s spend over time, purchase frequency, internal rating, profitability, and quote-to-order percentage. What is the market price your competitor is charging? What are the other market routes the customer can go and how much will that cost them? These data points can be used while building the quote and negotiating with customers.
Recommend Up-Sell, Cross-Sell Opportunities
Yes, these are no longer the forté of online commerce alone. The world of B2B Sales can also benefit from recommendations that help increase overall deal value or profitability. As an example, sometimes reps try to work within a certain deal value that fits the customer’s budget. In such cases, offering a lower-priced alternative at a lower discount leads to higher profitability than a higher-priced product at a higher discount. Enhanced intelligence can help the sales rep get their quotes approved automatically or faster and still be within the promised deal value.
Necessitate Approvals Where Needed but Make Them Faster
Let’s face it, there will always be times when the sales rep will create a quote that is below the recommended price. The reasons are well known and not unfounded—”This is a customer we have to have…”, “Just look at the deal size…”, “I need this to make my quota…”, etc.
However, in the interest of maintaining company profitability and not leaving value on the table, companies impose approval processes for such deals. These approvals may seem evil to the sales rep who is working against a deadline, but they are undoubtedly a necessary evil.
Companies must act to make this approval process transparent and smooth. While building the quote, the rep should be able to see the number of approvals needed, the details of who the approvers are and why the approval was needed. Approvers should have an easy way to see the incoming trail of deals for their approval and make a quick assessment. The rep should also find it easy to track the status and get their deals expedited if necessary.
Deliver Deal-Related Insights to the Traveling Salesman’s (and woman’s) Fingertips
Sales reps are rarely found at a desk looking intently at a laptop or talking demurely on the phone. They’re the on-the-go folks in the company, usually found in airport lounges or checking their smartphones inside an Uber on their way to meet a customer. They need things like price guidance limits, purchase history, line item details, up-sell / cross-sell options, competitor info, etc. on their tablets and phones while they’re talking to a customer. The last mile of the sales enablement journey is definitely in making these insights easily consumable at the “point of negotiation.”
Enabling Sales to create and defend more profitable quotes is an important step in organizational change that leads to higher profitability. Once the musk deer develops an internal locus of control, it uses its aroma to mark its territory and build and defend a family. Organizations that realize untapped profit potential within its ranks must strive to utilize existing data to empower Sales to capitalize on it and win more profitable deals.