Make your 2018 sales meeting theme about maximizing profitability throughout the entire customer relationship, not just during the initial deal
Filling the funnel, driving pipeline, and acquiring net-new customers will always be the sexy, swashbuckling side of B2B sales—which is why so many sales meetings are overwhelmingly focused on preparing salespeople for success in exactly this stage of the buying cycle. Similarly, when it comes to maximizing profitability, so much sales preparation is skewed toward opportunities to drive profitability during the deal cycle—rather than on all the opportunities reps have to drive profitable growth throughout the life of their accounts.
For your 2018 sales kickoff meeting, it’s time to think deeper about how you can prepare reps to capture more value both during the deal stage and after it, when your prospects become customers and you need to expand the value of your relationship. With that in mind, I’m going to look at one key moment you need to train for during the deal, and two key moments your reps need to master with customers that are already in the fold.
Moment of Truth #1: Create Pricing Uncertainty During the Deal – McKinsey & Company found that a one percent increase in pricing equates to a nine percent increase in operating margin. When it comes to maximizing profitability during the deal, this finding underscores how crucial it is to employ specific messaging techniques that allow you to expand the scope and size of your discussions. For salespeople in negotiations, that means introducing unconsidered needs—i.e. problems or missed opportunities your prospects haven’t yet considered—to create pricing uncertainty, which de-commoditizes your solutions while expanding the value of—and need for—your offerings. When it comes to capturing more value, this is a far more effective way to protect your pricing and close profitable deals than resorting to traditional late-game negotiation tactics.
Moment of Truth #2: “Why Stay?” – Tell the Right Story for Securing Renewals – If last year’s sales kickoff was all about training your salespeople to challenge and provoke your customers, you were preparing them adequately for acquiring new customers. As for keeping current ones? Not so much. Corporate Visions research shows that applying the same provocative messaging approach that works so well with prospects will actually backfire when it comes to existing customers you’re trying to renew. Despite this, a Corporate Visions industry survey found that nearly 60 percent of companies don’t feel the need to tell a different story for new customer acquisition versus customer retention/expansion.
That’s not good for your growth plans, according to an interesting stat cited in a Harvard Business Review article. The stat asserts that acquiring a new customer is anywhere between five to 25 times more expensive than keeping an existing one. That’s not so surprising when you consider that high startup and support costs can mean customers have to be an active account for months, maybe years before they become fully profitable. Given the findings from our own research, the renewal story isn’t something companies should just wing. Nor is it a message that should in any way resemble the story you tell to acquire new customers.
Moment of Truth #3: “Why Pay?” – Communicate Price Increases Effectively – Renewals aren’t a conversation you want to take lightly from a structure and strategy standpoint, and the same goes for price increases, which are notoriously tricky and delicate. Unfortunately, many companies are in fact skimping on the messaging rigor in this moment: a Corporate Visions industry survey found that four out of five say they want more direction and guidance around communicating price increases (or the “why pay” story).
Like the renewal conversation, your price increase discussions demand the kind of messaging that’s fundamentally different—even opposite—from the sort of story you tell when prospecting (you can learn about the tested and proven “why pay” messaging framework here). As a result, salespeople need to be trained to understand the unique buyer psychology germane to this critical moment.
What sales kickoff isn’t about maximizing profitability? That’s ultimately why you’re making big investments to bring your sales team together this year. But in 2018, don’t restrict your focus just to early-stage demand generation and pipeline creation—especially at a time when more companies are moving to a products-as-a-service experience, an evolution that’s shifting the pressures and opportunities to other key moments beyond the initial transaction. So, when you talk about capturing value and maximizing profitability at your corporate sales meeting this year, remember that you’re talking about much more than just deal-stage pricing negotiations.
Want to learn more about structuring your next kick-off to better prepare your reps to sell better across the variety of scenarios they face? Check out our eBook: Putting Your Sales Kick-off In Context