How to Sell to SMBs in the Future

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Unlike corporate purchasing departments, most small and medium-sized businesses (SMBs) act more like consumers in their buying behavior. Using the power of social and other feedback networks to guide their purchases, they are becoming better informed and will continue to demand more choices, custom configurations, immediate delivery and pricing flexibility.

The SMB change – as competition

increases and new engagement models are

created

Consumers will not only continue to dictate custom and semi-custom solutions, settling only for commodity provisioning when price becomes the key driver, but also will continue to exert pressure during purchase negotiations.

To respond, SMBs will need to make significant changes in their engagement models. Moving into the future, SMBs will face increasing competition from well-funded companies using new and different customer engagement models, including:

• Big-box companies will remain, with walk-in retail business fairly flat and growth expected from ‘order on-line, pick up in store today’.

• Same-day home delivery will expand and be both a competitor and enabler for SMBs.

• Partnership opportunities with Amazon (and others) will create new opportunities and change the consumer engagement model.

• Consolidation will continue. Traditional big-box companies are acquiring service providers to broaden their offerings. For example, in 2012 the US Home Depot chain acquired Redbeacon to expand its reach into the home services market. They are now directly competing with SMBs that are also their best customers.

• Direct consumer engagement models will eliminate intermediaries. If a producer and a consumer can immediately connect and do business together using a mobile app or web portal, then traditional intermediaries become irrelevant.

New aggregators, intermediaries and big-box companies expanding into services, direct and same day delivery will combine to create a very competitive future marketplace for SMBs.

More Competition than Ever More Choices than Ever Want Insight from Trusted Source Don’t Want to Do It Themselves Desperate for Leads and Conversions

LEADS

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What the SMB wants

By 2016, SMBs will see significant choice increases, primarily in the areas of ICT (information, communication and technology) and within sales, marketing and advertising services. Normally choice is a good thing, but SMBs are becoming increasingly overwhelmed and want a trusted adviser to guide them. Conversely, they are suspicious of companies that want to push product or use primitive needs/solutions selling techniques.

One way to significantly improve the trust rating is with value-added changes to the sales experience. SMBs indicate they are hungry for valuable, unbiased information. 68% of SMBs use the Internet often or very often to find information on products and services they want to buy. 58% frequently look for business management advice to help them better run their companies. Based on multiple sources, SMBs are forecasted to embrace value and insight.

In a study done by the Corporate Executive Board, the point of sales experience, at 53%, has the highest contribution to business customer loyalty. In this study, the business decision maker and decision influencer prioritized what is most important within the “sales experience.”

The optimal sales experience:

• offers a uniquely valuable perspective on the market.

• helps to navigate alternatives.

• provides on-going advice or consultation.

• helps avoid potential land mines.

• educates on new issues and outcomes.

• is easy to buy from.

• is provided by a company with widespread support from others they listen to.

SMBs want new sales approaches that add value, not just extract revenue.

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What sales teams need to do differently

As ongoing changes in consumer buying behavior force SMBs to change as well, they will need to adopt new and innovative customer engagement models. There are nine essential components needed for successful selling to SMBs:

1. Obtain insight to become the most knowledgeable about the market, customers, trends, competition and differentiators

Insight sources can include internal resources, external market sources and third-party suppliers. Establishing segment specialists within the organization is a practical way to speed the initial supply of insight to a selling organization, and keep current on changing trends. Insight for this sector can include, but is not limited to:

• Consumer purchase preferences relevant to the SMB category.

• Competitive trends that affect the SMBs current customer engagement model.

• General and business trends that will impact the SMBs category.

• Ways to achieve operational excellence and efficiency.

• Best practices in similar, but non-competitive businesses.

• Specific recommendations that solve challenges or bring opportunities for the SMB.

• Third-party evaluations of SMB choices.

• Alerts on incompatibilities between various technologies and equipment.

Because insight is typically much broader than just the products and services sold, it has a much higher intrinsic value.

2. Segment the customer and potential customer for optimal results and internal efficiency

Because of the diversity within the SMB sector, a single unified approach will seldom be effective. SMBs want vendors/representatives that know what they are facing, and no two SMBs are alike. Still, with this diversity it’s impossible to have a totally customized approach for each of the millions of SMBs. The answer is segmentation. While there are hundreds of ways to segment the SMB marketplace, many of these ways are very difficult to implement effectively. Instead, by using a much simpler method with four categories of segmentation, we can balance the specialization needed with an executable approach: A. SMB Category: Knowing the primary and secondary business focus of an SMB, as well as what end user needs it serves, is an imperative. For example, HVAC contractors and Cosmetic Dentistry have little in common, and using a ‘one size fits all’ will be quickly

dismissed by the business owner/manager.

B. SMB Size: There are many different ways to measure size, but number of employees seems to be a simple yet rich approach.

C. SMB Buying Preferences: Changes in customer engagement models going into 2016 will create a very dynamic situation. Some SMBs will want to see someone in person, others will be better served with significantly increased digital or written communication.

D. SMB Geography: Regional and local differences can be exploited for better customer service and better sales organization efficiencies.

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3. Organize sales efforts to efficiently align with these segments

In this future state model, each key component of the sales organization has a primary and interactive role to perform.

A. Team Selling

Recommended Approach: Insight selling/consultative relationship with assigned SMB category and size. A team selling approach with insight selling is the most effective way to obtain and retain the largest customers. Surveys indicate this sales approach has increased 30% over the last five years, and growth is expected to continue. Coordinated resources will ensure a value added sales experience for this “most sophisticated” customer grouping.

B. Field rep / account manager assigned to customer (field rep is also known as face-to-face or premise rep):

Recommended Approach: Insight selling/consultative relationship with assigned SMB categories and geography.

A permanently assigned rep with insight sales approach fosters an individual trusted advisor relationship between the sales rep and the SMB owner/manager. Under this approach, the rep will have:

• An increased understanding of the customer and their needs through a broader experience.

• A single point of customer contact, selling a portfolio of solutions/products.

• The ability to proactively identify customer issues and propose solutions.

• Access to knowledge (e.g., specialists’ leading practices) with formalized knowledge management structure. Under the insight sales approach, the evolved sales force focuses on account (or business) selling and is comprised of small, highly-qualified marketing teams. It actively manages the profitability of the account by owning a P&L as well as having a larger portfolio under its belt.

C. Outbound and in-bound call centers

Recommended Approach: Insight selling coupled with

localization.

A localization approach is a more flexible and facilitates more ownership down the chain, providing for a more intimate understanding of the customer. Such a structure will foster:

• Go-to-market approaches tailored to the local environment.

• Decentralized decision-making based on local trends (e.g., calendar/events, demographics, competition).

• Greater regional responsibility and support of multi- brand selling.

Under this model, the sales force is evolving from a larger centralized call center to a locally-focused model, increasing sales force accountability on multiple fronts. They can contribute to the customer’s success by becoming more aware of regionalized differences, key competitors and evolving customer engagement models. They can also be better trained to recommend semi- custom product and service offerings – something the SMB desires. An outbound call center works best when adopting the mindset of “appointment setting.” SMBs appreciate this approach, but do not respond well to telemarketing.

The inbound/outbound call center of the future dovetails seamlessly into the face-to-face channel. It provides team selling as needed, such as when an onsite visit is optimal.

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D. Retail

Recommended Approach: Insight selling coupled with immediate solutions selling.

A growing number of large corporations are adapting their consumer retail stores to cater to the needs of SMBs. According to a recent survey, through 2013, 56-percent of global communications companies plan to use their stores to target small businesses, and 24-percent will use their stores to target medium businesses.

A retail environment if conveniently located, can add richness to the overall customer engagement model for the SMB. The key here (as with other channels) is to offer a level of specialization that meets the needs of the SMB. Sales associates at the retail store need to be well versed on who and when to hand over an SMB for specialized insight selling, and have an eye toward urgency.

E. Digital Direct Sales: E-tailing and SMB business center / insight portals

There is a formidable scale to servicing the needs of millions of SMBs. Digital channels can efficiently help address this and sell directly to the SMBs that prefer this engagement model.

In addition, as the SMB sector experiences significant change, there is a commercial education aspect to this and the need to transfer large amounts of information, insight, advice and peer support to the SMB. One way to do this is with a customer business center or insight portal. Quickly evolving into indispensable arenas where ideas and solutions are found and exchanged, SMBs are benefiting by obtaining very specific and relevant information about how better to run their business. For the sponsor of these portals, it becomes an extension of the sales experience and a very efficient method of improving loyalty. Today there a just a few portals available, but several companies are working hard to attract SMB participation into their current social sites or establish dedicated business social platforms. Having said that, even Google does not exclusively direct self-service any longer, relying on a combination of face to face, call center, partners and self-service channels.

F. Third-party / resellers

Recommended Approach: Insight selling.

It’s quite challenging for a corporation to create a productive ecosystem of reseller channels that adds value into the sales experience. Google and some others have been recently putting a lot of effort into driving robast partner sales.

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4. Adopt a fully supported insight sales approach Many of the companies are still approaching SMBs using transactional selling (aka product selling). Some companies have progressed to solutions or services selling. But in many cases they are still coupling this with a form of product selling, especially at closing.

A new approach that shows promise is insight selling. Some are critical to say this is a coat of paint on an old approach, but we have seen real progress by companies adopting this – especially when it’s adopted in the sales organization and across the broader customer engagement team organization.

A recent study confirms that many SMBs have completed 60% of their purchase insight gathering before a sales consultant makes the first call. The goal here and what SMBs want, is someone to help them earlier in the buying process. With insight selling, we can become indispensable to the SMB.

5. Bring a broader mix of products and solutions that can be customized to fit diverse needs

Certainly the product mix and the sales approaches have a strong hand and glove relationship. SMBs have expressly indicated they do not like to be approached with a one-size solution and will reward the company that approaches them with both a tailored product/pricing offer and an individualized sales approach.

6. Increase skills and value added during the sales experience

Organizing around key segments allows us to develop specialized sales team skills. Instead of knowing a little about every customer they meet, they can go more in depth about the segment they have been assigned. This creates career growth for the rep and greatly increases their value to both the organization and the SMB. New selling skills such as thinking from a business point of view, customer problem-solving and product compatibility, and cultivating relationships will take on increasing importance. Pressure-based relationship building may be decreased by the preference for newer, less direct ways of establishing contacts and interaction via net messaging, text, social media and chat. Face-to-face selling will likely remain critical, but sales teams might be more judicious in its use to maintain efficiency.

INSIGHT SELLING Becoming Indispensable by Providing Insight Beyond Your Own Solutions SOLUTIONS SELLING

Needs Assessment then Recommendation and Close

AIDA OR AID AKA Product Selling

Insight Selling Solution Selling

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7. Compete for share of mindset with own salespeople Research, time-studies and interviews with sales teams clearly indicate the challenges they face. Multiple priorities, order reworking, failed CRM approaches, confidence issues with the products sold, all indicate a need for change within a typical sales organization.

Because of internal operational challenges and marketplace complaints, reps can bounce from reactive issue to issue, and lose valuable time along the way. There is too much complexity for them to handle, and this needs to be dramatically reduced.

The changes outlined here are critical to achieving improved sales productivity. Outlined in recent time studies, some core sales channels targeting SMBs are down to just over an hour a day at point of sale.

8. Build the customer engagement teams

This goes beyond the sales team and includes other key functions within the organization. By 2016 most organizations will assign and share responsibility for results with the marketing organization. In a recent study, the ability to demonstrate the revenue return on marketing investment (ROMI) is the leading concern of business-to-business marketing executives. In another survey, the majority (66%) of marketing executives who responded cited revenue growth as the top goal driving their strategies.

70% of revenue growth initiatives sink because of the ongoing disconnect between marketing and sales. It’s important to align demand creation targets coming out of marketing with sales pipeline capabilities so that marketing and sales are in-step.

9. Use incentives to encourage short-term sales wins and add longer-term relationship rewards

A significant topic worthy of its own exploration, sales compensation will continue to be a key lever in the performance mix. Organizations in the future will need to find effective ways to couple short term goals and customer satisfaction. Consider less pay devoted to “easy” automatic sales, so that increased compensation can be dedicated to more valuable achievements that push the company’s growth forward.

• Smarter segmentation • Upskilled salespeople

• Clear marching orders • Aligned & personal support Sales

leadership

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The increasing role of the sales manager

More than ever, studies indicate the role of the first line sales manager as one of the most important assets to achieve results. Companies have realized how much administrative burden has been imposed on this group, and have worked to lighten the load. The value of the sales manager is to:

• Work across the organization to transfer knowledge from the field and bring various team members together.

• Coach the sales team, giving personal attention to train and guide each rep to meet their personal goals. Sit down with reps and help become their success planner. Show them how to make the money. Show them the value of happy customers.

• Provide personal service to key customer accounts and help close programs (in combination with the primary rep).

• Provide inspiration for customer values, product solutions and high energy selling organizations.

• Recruit the right talent, assess their potential and coach their sales staffs more, specifically around “how to work with others”.

• Lead the organization to provide meaningful and relevant solutions. Improve the sales experience for the customer. Lead sales reps to be able to adapt, modify, improvise and achieve.

Internal improvements will likely minimize administrative burdens and filter relevant information through aggregated data dashboards and performance scorecards. Tools and technology can be added to efficiently connect customers, sales team members, support resources and provisioning specialists. As these relieve some pressure and free up time, the sales manager will be able to enhance their judgment. A key valuable skill for good sales managers is her/his ability to outline “tiebreakers” between competing objectives and priories.

A well-conceived approach to all this combines elements of organizational structure, coordinating mechanisms, governance policies and aggregating technology. From a management point of view, there needs to be a mix of sales management, training and technology to enable sales teams.

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What tools are needed?

Guided selling tools help field reps, customer center reps or retail associates greatly improve the customer engagement model. Through a series of questions they synthesize the responses, recommend products and outline future expectations that align with the answers.

Guided selling tools poised to increase in popularity by 2015 include:

• Interactive Consulting Tools: Interactive consulting

tools are for SMBs who have an identified need or problem, but don’t know what types of products can solve it. These tools emulate an experienced sales person and focus on lifestyle and usage questions in order to recommend products.

• Mobile Guided Selling Apps: A mobile app can be

a viable sales and conversion tool when it includes a guided selling component. Companies can capitalize on the mobile movement by developing apps that glean customer information in an interactive way and deliver product recommendations or personalized content based on the individual answers.

• Product Advisors: Product advisors help SMBs

who know what they are looking for narrow down the choices using questions or filters. As customers enter information about the products they’re looking for, the back-end technology matches these product attributes to products in the catalog. These matches are translated into recommendations for the consumer.

Components within the guided selling tools environment, include:

• Interactive needs analysis and recommendation scripts

• Product and services comparisons

• Up sell and cross-sell recommendations

• Product and service expectations forecasters

• Real-time pricing calculators and “chat” with supervisor for approval

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Also part of guided selling is the growing application of product trials. Usually activated in real time during the point of sale, these can be powerful low risk ways to get the SMB to see the benefits quickly.

Tools that help a rep keep track of their day, plan their appointments, manage new leads and find the right path to adding value for the customer will grow in popularity. Tools to clearly show the rep how they are paid and reinforce the actions needed to achieve this pay will always be the ‘most used’ by the sales force.

Guided selling tool displayed on an iPad

This particular tab is helping a face-to-face sales rep plan for day and prepare for their upcoming sales call at 10:00 am.

Simplified bundled offering display

The specific product SKUs are tied to the corporation’s product management system, eliminating errors in the field.

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What training is needed?

Successful onboarding and training methods still involve role-pay and include real world environments. One best practice training center for SMBs combines technology in the classroom with role-plays. The performance during role play is evaluated by instructors and peers. Reinforcing the habits obtained during this rigorous training is eLearning and qualification testing. This is particularly effective to certify that reps are able to properly represent the product and sales call process.

Another technique that ties training to quicker results involves adding product advocates to each local office. The advocate plays the role of player-coach and helps reps in both a group and individual setting. The product advocate also works to identify any issues from the field and helps flow these upward to a central group for resolution. This is a best practice approach to accelerate and improve the go-to-market launches of most products sold through distributed sales organizations and third-parties.

Transitioning to the sales force of the future

Transitioning from current state to the sales force of the future requires operational excellence. In order to prevent revenue/margin risk scenarios, a migration plan needs to be developed to protect current revenue streams and systematically convert to the new methodologies mentioned above. One way to accelerate the changes is to implement a company-wide change management initiative. This will help the incumbent sales team adapt.

Sales teams are typically a unique group, full of energy, enthusiasm and culture. But, because of these traditions, they can be a difficult entity to change. Care must be taken to help sales organizations understand the changes and visualize the winning future. To lessen the psychological distance to the future, companies may implement changes incrementally. Defining and deploying more focused sales roles through team structures could not only help but also would enable companies to generate relatively efficient coverage models.

Plan for Success Your day, week, payperiod to maximize effectiveness and freedom Produce ProActive Provide Insight Plan Provide “Insight” 1. Before 2. At Point of Sale 3. Post Sale ProActively Facilitate 1. Customer Needs 2. Customer Solutions 3. Internal Team Produce 1. For the Customer 2. For the Company 3. For themselves

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In implementing a sales force of the future model with insight selling, there are several strategies that must be implemented to meet the overall objectives:

• Initiate change management practices across the organization to encourage employees to make personal changes and adopt a high standard for customer satisfaction. And to uplift sales force morale if in an environment of deep cost cutting.

• Establish shared goals and results quotas across sales, marketing and operational/fulfillment specialists.

• Set up a governance structure to identify and transfer best practices across the organization.

• Gather and push meaningful relevant insight to the customer and to sales – in formats that are easy to digest and understand.

• Organize customer engagement teams around segments and stand-up segment specialists within the organization.

• Establish easy-to-use dynamic analytic dashboards to clarify results to goal. Organize the sales force near the customer and localize for optimal benefit. Shift accountability and decision-making to regional sales managers to promote stronger relationships with customers.

• Develop broader product and servicing offerings that can be customized in the field.

• Align sales messaging to different stages in the sales process to increase success.

• Make sure new product introduction material and training is relevant to the sales opportunity and is in front of sellers when they are most receptive.

• Provide sales materials and tools well in advance of new product launches so that sales can become comfortable in using them.

• Utilize technology to scale for efficiency, integrate messages and cohesively bond the customer engagement teams with the SMB.

• Maintain sales materials in a centralized, structured digital environment that allows automatic updates.

A sales force of the future approach was introduced in January 2013 within a major pharmaceutical company. They are taking an incremental approach and started with two product lines. According to an internal source, it is a “journey of five years” that will eventually encompass the entire product portfolio. Instead of using multiple sales approaches with up to four reps visiting a doctor’s office, the company now sends only one rep to cover the entire portfolio. The company is reacting to doctor feedback which says “There are too many sales reps in my office and I want a partner to help me better serve my patients.” Doctors have told the company they want sales reps that understand competitor products as well as their own and are knowledgeable about the diseases they treat.

Instead of organizing the sales force around specific products, they have organized around segments including SMB type, size and location. The local approach helps the sales force work more effectively with doctors in regional health care as well as government organizations.

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Summary

With a “one message fits all” approach, today’s traditional sales force model is too rigid to meet developing SMB market needs.

The definition of the customer is widening from being purely focused on the owner/manager to include a range of influencers and stakeholders not previously considered. The SMB will have more choices than ever in the future, and will seek out a trusted advisor to help them make insightful decisions.

Future successful SMB selling teams need nine essential components:

1. Obtain insight to become the most knowledgeable about the market, customers, trends, competition and differentiators. 2. Segment the customer and potential customer for optimal results and internal efficiency.

3. Organize the sales effort to efficiently match up with these segments.

4. Adopt a fully supported insight sales approach.

5. Bring a broader mix of products and solutions that can be customized to fit diverse needs.

6. Increase skills and value added during the sales experience. 7. Compete for share of mindset with our own salespeople. 8. Build the customer engagement teams and support organization.

9. Compensate reps on both short-term wins and longer-term customer satisfaction measures.

The sales force of the future will be designed around better meeting the changing needs of the SMB. Both decision makers and decision influencers will be cared for, utilizing a broader understanding of each SMB and the category it represents. Customer engagement teams across the organization will be better equipped to support the sales reps critical mission:

Provide valuable insight at the point of sales to become indispensable to the SMB.

Technology and a more flexible regional structure will be key enablers. Guided selling tools used by all sales specialists will help convey a better understanding of SMB needs. These same tools will provide clearer expectations of how well products will perform, what solutions they will provide and the key benefits. Customer business centers or insight portals will also become robust as a way to efficiently engage the SMB with insight selling and help them navigate their choices.

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