Stop Whining About Small Markets vs. Large Markets - Business Principles are Business Principles

I teach a sales workshop (don’t worry people this isn’t an infomercial) that focuses on teaching business fundamentals to sales professionals in the imaging industry.  Every time I teach this workshop, inevitably there will be a rep that starts complaining about how the material is for big companies and not “rural” market smaller companies like theirs or there will be another rep that states their market is different because of their geography.  

“We just do things different in Texas, David.”  Really, GAAP (Generally Accepted Accounting Principles) is different in Texas?  The companies in Texas don’t use Balance Sheets or Profit and Loss Statements? 

“David, people are different in Des Moines.”  Are you telling me that the companies in Iowa you service don’t want to gain a competitive advantage over their local or national competition?  Oh, I guess it is just the companies in Florida that want that…let’s all pack up and go home.

I blame this mindset on a few factors, not all of which are entirely the reps fault.  First, traditional sales training doesn’t teach salespeople business acumen. Reps haven’t been taught to think like someone who has to run a company.  Second, traditional management methodologies reinforced by some sales leaders today allow for the mindset that they are different due to their place on the map.  Here is a warning, if your sales people and sales managers don’t learn to think in terms of a business owner, you end up with scenarios like this.  “If I don’t get another 2 mills off the service pricing we are done!”

Don’t start with me about how Sioux Falls, SD is different than Minneapolis, MN and that Savannah, GA is different than Atlanta, GA.  There are three things companies focus on regardless of their size or their geography.

1. They all want to increase revenue
2. They all either want to control spending or decrease expenses
3. They all want their people to be efficient and more productive

Yes, larger companies have more complex buying teams and larger markets have more opportunities in vertical markets than a small market.  But all companies have to do sales, marketing, accounting, human resources, and payroll, service, finance, etc.  Regardless of size, they all have the same functions.

When business acumen is missing, the salesperson struggles to understand how their company competes and wins in the marketplace.  They try to sell price when their company doesn’t compete on price.  Why?  They don’t know how to reach equal business stature.  All they know is that their widget is 65 ppm and the competitor has one that is 62 ppm. 

When business acumen is missing, the salesperson doesn’t understand the financial metrics that drive their customers/prospect’s business, and they cannot develop solutions that improve those metrics. They are uncomfortable with numbers, spreadsheets, and proving ROI.

When business acumen is missing, the salesperson struggles to build consensus with their prospect’s buying teams. They cannot speak to operations about execution, they cannot speak technical issues with IT, and they cannot speak to legal and compliance issues with the procurement or operations.

When business acumen is missing, the salesperson cannot develop and create the vision of improved performance or the solutions that will deliver that value for their clients.

Alright, so I pointed out the problem.  What is the solution?  Rome wasn’t built in a day, nor will the business acumen of your sales team.  Here is an idea.  Why don’t you start using your sales team meetings to teach your sales team how companies focus on the big three I listed above?

Here is a quick lesson that you can use in your next sales meeting.

Productivity – This is the number one answer I receive when I ask reps in account planning sessions, “why is your customer going to make a change from his current situation to your proposed solution?”  They usually respond with “the new solution I have will make them more P-R-O-D-U-C-T-I-V-E.”  The conversation usually ends after I ask the simple follow up question of “how will it make them more productive?”  It ends because the rep lacks knowledge about business process.  Without that basic understanding their productivity conversation is hollow to their customer/prospect.

Business Process

Before we start with the lesson, it’s important that you understand exactly what a business process is. Simply and concisely, a business process is a set of coordinated tasks and activities, performed by both people and equipment, to accomplish a specific organizational goal.

The emphasis is on how the work gets done. Typically we think more about the “what” than the “how”, and that’s why examining business processes is so important. An end product can be delivered in many different ways: One of the keys to running a profitable business is making sure that the most direct route is taken. Start by breaking down something your team knows.  Most workplaces have a process for purchasing office supplies. It’s probably nothing they’ve ever stopped to contemplate; it’s just something that happens. When you break down the steps involved in getting a new supply of pens and paper to the office supply cabinet, it’s remarkable how much is involved.

The office supply process might go like this:

• You fill out an office supply requisition form
• The form is delivered to a designated person
• That person collects the requisitions and creates a purchase order. The timing of the order may be regular or based on a certain volume of requisitions.
• The order is received (potentially by another person in the shipping department).
• The order is checked for accuracy.
• The order is distributed

Process Evaluation

With the process all mapped out, now you have a perfect time to evaluate it for inefficiencies. Anything that can be done more efficiently is worth investigating. The principles of total quality management are helpful for this type of evaluation.

With a TQM approach, there are three main opportunities to make improvements and increase efficiency in companies:

• External customers – What can you do to make sure your customers are completely satisfied with your product or service?
• Internal customers – How can you make sure your suppliers and staff knows what they need to deliver so you can produce a quality product?
• Business processes – How can you improve the processes themselves, decreasing costs and time spent? 

Kaizen questions five forms of waste:

• Movement – moving materials around too frequently.
• Time – bottlenecks with no value added.
• Defects – producing inferior products.
• Over-processing – doing more to the product than is necessary
• Variations – over producing solutions when a standard one will do. 

Some questions to ask as you evaluate the process include: 

• Are resources being wasted?
• Are there unnecessary duplications?
• Are there bottlenecks?
• Are there tasks that can be delegated to more appropriate people?
• Are there sufficient cues in the process to ensure nothing gets overlooked?
• Are the inspection points sufficient? Are there too many?
• Are there opportunities to automate some steps? Can you use technology more effectively?

Business processes are everywhere. When your team understands the processes that people and/or equipment are involved in, they are in a good position to spot potential areas of improvement.

Conclusion

In the past, success in sales depended very heavily on the salesperson’s sales acumen. While sales acumen is still necessary, business acumen is now equally important (and in many cases, more!). The business of sales is now the business of business. Salespeople now need the business acumen of a general manager to help your company maintain a true competitive sales advantage.

For those of you that are bent about my statements regarding the differences between markets.  I’ll put you at ease now.  I recognize that there are differences in business due to region or geography (I have lived and worked in 6 states in the US and four foreign countries, I get it), but those are more cultural differences and they have nothing to do with business principles.  The healthcare facility in rural Tennessee and the healthcare facility in a big market in California both have to meet HIPAA regulations and the publicly traded companies in Washington and Oklahoma both have to deal with SOX (Sarbanes-Oxley) compliance.

Ask yourself the following and start building your own business acumen. 

• In what areas do I lack general business education?
• In what areas would having better business acumen allow me develop better solutions for my clients?
• What parts of business am I uncomfortable discussing? Finance, marketing, process?  Do I rely too heavily on others in my organizations for my lack of business acumen?
• How could I develop this business acumen?
• What sales opportunities do I have now that would be more easily obtained with a greater understanding of business?
• Who in my network, my company, my clients, and my prospects could help educate me on some key areas of business?