I am providing this new series of articles to point out crucial factors of sales, utilizing practical examples from our own company.
Let’s begin with the important topic of understanding buyerBuyer A buyer is an individual or organizational entity that purchases a product or subscribes to a service. preferences. How are preferences precisely established, and why are they so vitally important?
I always like to point out, to orient the reader, that we utilize a great deal of theory from the Austrian School of Economics, which forms our foundation.
Accelerated Changes
One fundamental fact we learn from the Austrian School is that the world is undergoing rapid changes—we don’t have to be incredibly observant to realize that. Many, however, never saw these changes coming. Only a few could predict them. They’ll look back and wonder, “Why didn’t we see that?”
One factor behind the escalation of change is the remarkable rise in world population. The world population escalated, last year, to over 8 billion. When I was born in 1961, the world population was only 3 billion—an incredible increase in a relatively short time. Knowledge and many other factors have grown along with the population increase, too. As I said, many didn’t see the major changes coming as they did—otherwise, they would have taken action.
How Important are Entrepreneurs?
The importance of the entrepreneur increases in relation to the rate of change. While everyone has some entrepreneurial qualities, some truly demonstrate them. Salespeople are certainly among these, which is why I’ve always referred to salespeople as “entrepreneurs in the enterpriseEnterprise Enterprise (in the context of sales) is a relatively large organization typically composed of multiple levels, locations, and departments which need multi-layer software systems that support collaboration across a large corporate environment.”—or, as a word I coined, “salespreneurs.”
Entrepreneurs possess the capacity to perceive subtle indications and opportunities missed by many. These are people who create new solutions and new companies—a remarkable example from over 100 years ago is Nikola Tesla, who invented the form of electric power we use today. Such entrepreneurs are not always successful business people (as Tesla himself wasn’t) but are the innovators creating the future.
According to Austrian School economic theorist Israel Kirzner, such people possess a special ability called alertness. And here we can make our first comparison to Pipeliner CRM, for Pipeliner helps provide this alertness to salespeople and businesspeople.
Beware the Zombies
It can happen that a person so gifted creates a company, but the company fails. Someone with this ability often creates a company, but the company doesn’t succeed. The idea itself might be good, but there is a marked difference between innovating a solutionSolution Solution is a combination of ideas, strategies, processes, technologies and services that effectively helps an organization achieve its goals or hurdle its challenges. and running a business, and the business doesn’t make it.
Historically, such companies simply fold—but today this often doesn’t occur. There is so much cheap money available that these dead companies—I call them zombies—are kept afloat by investors who feverishly believe that “someday it will all work out.” They don’t, however.
It’s a simple matter to turn, as an example, to the CRM industry, as it contains many zombie companies. There are some 800 CRM systems available, and many are just barely surviving.
It’s an additional fact that if you consult one of the software comparison sites like g2.com (formerly G2 Crowd) you’ll see that many of these don’t compare to Pipeliner. It’s similar to motor vehicles—there are many types of vehicles such as convertibles, SUVs, trucks, buses and others, but these could not all be classed as “cars.” The CRM category has become very broad and includes solutions that really aren’t CRM, such as support ticketing systems. These certainly aren’t true CRM systems, but they’re lumped in under one category. These can confuse companies searching for a CRM as many won’t fit their needs.
Decisions Based on Preferences
It’s true that a buyer seeking out a CRM—or, for that matter, any solution—is making some decision. This is always true in sales, especially at the beginning of the year. Buyers are making important decisions. What is not always fully recognized is that such decisions rely heavily on preferences.
In actuality, two types of preferences exist: demonstrated and spoken. A salesperson will often hear, from a prospect, “Yeah, I’m interested! I want to buy that!” But that spoken preference has not been actually demonstrated. If a seller is not well-enough trained and experienced, they can be misled by such a statement. They become immediately excited, especially toward the end of a sales period when they have a quotaQuota Quota is a predefined benchmark indicating the amount of sales a selling unit such as a sales rep or a regional sales team should achieve within a given period, often used as a measure of success, performance and eligibility for commissions and other rewards. to fulfill.
Salespeople must be able to differentiate between demonstrated and spoken preferences. Only that demonstrated preference—one indicated by action—shows an actual intention to purchase. Salespeople are often discouraged or frustrated because they are not interpreting preferences correctly. As I always say, words can be empty unless actions underscore them.
When all is said and done, a decision is usually for something. At the same time, though, it could also be against something. What is the decision process?
Enter the Causal Link
Now we come to another Austrian School of Economics principle: A good (a productProduct Product refers to anything (an idea, item, service, process or information) that meets a need or a desire and is offered to a market, usually but not always at a price. or service) is considered action-relevant—meaning valuable—to a person or company if the person or company can form a causal link to achieve their subjective goals.
There are many salespeople—but also sometimes buyers—who don’t quite understand this principle, so let’s examine it a little more closely.
From their own point of view, the buyer’s goal is only subjective, never objective. If a salesperson doesn’t understand a buyer’s goals, that salesperson has misread the buyer. Turning once more back to my field, if a CRM prospect has a subjective goal of integrating CRM with ERP or other systems, that tells me that we can’t implement CRM within two weeks. It’s too complex and involves too many people.
Say we’re in the middle of November, and a seller has just given an excellent presentation to a prospective buyer. The seller is super-excited. The buyer tells the salesperson, “Yes, I like your solution. I think yours would be the best for us.” But the buyer needs to go deeper to learn what the buyer really wants to achieve. The seller has only heard that one statement from the buyer, and thinks the deal could be closed before the end of the year.
If, however, the salesperson had the information that the buyer had a subjective goal for achieving integration with company systems, and that there were other team members involved with the implementation, they would realistically see that this sale and implementation will take three to four months. They couldn’t possibly make it by the end of the year.
It goes even further than that. Per the principle we quoted above, the buyer only decides to make a purchase if it is action-relevant, meaning it’s valuable to the buyer and their company. It will be valuable to the degree it assists in achieving the buyer’s subjective goals. But how does the buyer know that the seller’s product will provide such assistance? This will only happen if the seller can show the buyer that there is a causal link between the seller’s product and the buyer’s subjective goals.
Various issues within the prospect company will act to negate the purchase—such as people who don’t fully agree with it, or issues that the seller’s product doesn’t totally solve. The seller must show that the causal link between the product and the buyer’s subjective goals can totally deal with any objections to the purchase.
From Los Angeles, where we’ve recently been drenched with record rainfall, I can provide a practical example. If someone comes into a tire store to buy tires for their vehicle in Los Angeles right now, the salesperson that will make the sale will have to show the causal link between buying tires and driving on wet streets. The tires will have to have an excellent grip on wet roads.
Unfortunately, there are many salespeople who don’t take the time to utilize this process. They don’t fully grasp the buyer’s subjective goals, and therefore cannot form that all-important causal link between the product or service and the company’s subjective goals so that the buyer can close all possible doors on any barriers to the sale from within their own company.
Pipeliner Company Example
When involved in a potential sale at Pipeliner, we take into accountAccount Account refers to a record of primary and background information about an individual or corporate customer, including contact data, preferred services, and transactions with your company. possible buyer preferences, and even have some of them worked out beforehand.
Two different basic kinds of preferences exist, both on the subject of time. The ancient Greeks tell us that there are two different types of time. The first is called Chronos, which indicates a period of time or range of time. It could mean the next couple of months, or a particular season. The other type of time is called Kairos, which means an exactly specified time. For example, New Year’s day.
If our buyer wishes to purchase and implement a CRM in the new year, we’d say that they’ve specified the Kairos time. That means our salesperson sold them the product last year, and we’re assisting the buyer to achieve their subjective goals in the new year.
It’s a normal occurrence that a prospect puts forth concerns or objections that we must overcome. One might be that they need references—what are Pipeliner customers saying about the product and company? That’s no problem—part of our causal link is to provide references.
A very valid concern is security—another possible worry a CRM prospect might have. How secure will their dataData Data is a set of quantitative and qualitative facts that can be used as reference or inputs for computations, analyses, descriptions, predictions, reasoning and planning. be? Another part of our causal link is that we have all necessary security qualifications, such as IS0 27001, GDPR, disaster recovery and much more (click here to learn all about Pipeliner CRM security).
When subscribing to SaaSSaaS SaaS is an acronym for Software as a Service. solutions, many buyers worry about vendor stability. Will they be around next year? Given that there are some 800 CRM vendors, they might worry that we won’t survive. This is handled by showing them our track record—we’ve been in the CRM market for 14 years. Programming-wise, we have a rich history in CRM and, previously, banking compliance. We have many satisfied customers and, indeed, long-term customers. This puts prospect company buyers’ minds at ease.
And what of new features? We talked in the beginning of this article about constant changes in today’s world. To keep up with them, Pipeliner has a monthly new functionality release for the product.
And support? Pipeliner offers many different kinds of support, including inline help, a substantial knowledge base, and direct help when you need it.
While we’re never aware of every single detail of a prospect’s preferences, we have finely defined our target group. We do know our ideal buyer, and therefore understand their goals more and more. We don’t know them in detail, however—they’re different for every company. Once we have communicated with the buyer and learned their preferences in full, we then have their value expectations and can tailor our value propositionValue Proposition Value Proposition is a statement or message that encapsulates the reasons — such as benefits and unique attributes — consumers would want to patronize a brand or purchase a product. to them.
The above points all come together for the purpose of building trust—which, in the end, creates value. Trust means that the prospect considering us as a solution can take action.
Preferences Change
Again, we must fully grasp prospect preferences. What are they? Are they ready for the product now—is it a Kairos situation? Or is it Chronos, in some other time frame? We need to be able to read the person’s actions, so we have a clear indication of their real preferences.
In an effort to over-simplify the sales processSales Process Sales Process is a series of strategic steps or a set of activities aimed at driving sales growth through the alignment of personnel, market insight, methodologies, relevant business units, and technology., some CRM vendors assert that an optimal preference exists for all potential buyers. This is never going to be the case.
Over time, of course, preferences change. This is obvious, for example, with age. It’s rare that someone who is 80 years old will buy a new car or a house. As people age, their expectations become shorter. A younger person, building their life, has longer expectations.
One cannot always predict preferences. But finding them is what I would say the sales magic sauce is when speaking to the buyer. Who is your buyer? Who are you really talking to? Before you bring your proposition to them, what are their expectations? When all of this is understood, you’re on the right track.
Understanding Priorities
There’s another facet of buyer preferences which deals with priorities. While you understand their goals, you must also understand the order in which the buyer wants to achieve them. If you’re new to their game, your offering may not be a top priority. If you’re not top priority, you could be wasting your time chasing that opportunity.
There are three vital aspects pertaining to understanding buyer preferences.
- As a seller, invest only in opportunities where your offering and the preferences match.
- Pay attention to your energy investment. You can’t invest endless energy in pursuing an opportunity—it’s impossible.
- Returning to the Austrian School of Economics, always watch your opportunity cost. You can only spend so much money pursuing an opportunity before it becomes unprofitable. The opportunity must be profitable.
Fully understanding the opportunity cost, and knowing the purchase will be action-relevant to the buyer, you know you can significantly assist the buyer in achieving their subjective goals, you can demonstrate all causal links between your offering and their goals, and you’re bringing the customerCustomer Customer is an individual or an organization that purchases a product or signs up for a service offered by a business. value, then it’s undoubtedly worthwhile.
Pipeliner Brings Clear Insights
With Pipeliner, you can ensure that every one of these components are correct. When used correctly, Pipeliner provides clear insights into all your opportunities—and helps you greatly minimize risk in your sales process.
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