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The Missing Ingredient: Building Business Acumen
March 28, 2008
Is your sales team truly prepared to play with the big dogs?
By Jonathan Hodge and Lou Schachter
Try this experiment: Ask your customers what type of knowledge they most want your salespeople to have. Odds are the answers you get will surprise you.
Once upon a time, the common answer would have been "product knowledge." For years, customers needed salespeople to know their products inside and out so they could recommend the right one. But today, the Internet makes product knowledge accessible to everyone.
More recently, the answer might have been "knowledge about the problems I face," so the salesperson could recommend solutions. But that's in the past, too.
Today's customers want salespeople to have "knowledge about my business." Specifically, they want salespeople to understand their business drivers. This encompasses the overall business results the customers are trying to achieve, the strategies and initiatives they are pursuing to reach their goals, and the financial metrics they use to measure their success. It also addresses the trends, challenges and opportunities that are transforming their marketplace.
How does this affect sales training? Today, no sales curriculum is complete without courses that build business acumen. Without business acumen, salespeople can't make sense of the internal and external forces their customers are wrestling with, let alone have conversations about them.
Time and again, sales executives say the number one issue facing their reps is that they can't build relationships with executives in their client organizations. Their salespeople are stuck talking exclusively to technical buyers who are focused on price.
When you dig deeper, however, it becomes apparent that gaining access to executives is only part of the problem. The other part is that salespeople don't actually know what to say when they do get a meeting with those executives. Their natural instinct is to have the same kind of conversation—features, benefits, problems, solutions—that they have with technical buyers.
But executives don't care about that stuff. That's why they have the technical people in the first place: to worry about it for them. So when salespeople focus on technical issues with an executive, odds are good they won't be invited back. Some salespeople have been burned often enough that they no longer even seek the executive access their leaders want.
What executives expect in a conversation with a salesperson is a discussion of how the salesperson's products or services will help the executive's business accelerate the achievement of its desired business results. That means focusing on the customer's key metrics and how the product or service can help achieve the gains the customer seeks. It also means showing how the product or service can support a recently launched strategic initiative. It might also include an explanation of how the product or service can help the customer take advantage of an emerging trend in the marketplace.
A Workout for Your Noodle
Is there a way to build business acumen into sales training? Yes! As a matter of fact, major sales forces are doing it today. Developing business acumen doesn't require an MBA or 10 years of experience running a company. It means being able to see your customer's business from their perspective. One way to do that is through the use of simulations. In a simulation—which can be computer- or paper-based—salespeople run a company much like those of their typical customers. If the salespeople generally sell to retailers, they manage a retail chain. If they sell to manufacturers, they manage a manufacturer. During the course of the simulation, they have specific financial targets (just like their real customers do), and they must execute strategies in the face of changing trends, new demands from customers and a demanding employee base. At the end of the day, they have a visceral understanding of the pressures their customers face—and the levers that can be used to improve their performance.
Another way to build business acumen is to develop comfort with financial terminology. The traditional "finance for non-financial managers" course rarely works well with salespeople. Instead, many sales forces have adopted approaches where the learning focuses exclusively on what is relevant for salespeople. That narrows the universe to key terms and knowledge that will be useful in a conversation with a financially oriented executive. These courses then include extensive role-plays of salespeople having financial conversations with their customers.
The Internet and the Sarbanes-Oxley Act have made enormous amounts of information available on publicly held companies. Another type of business acumen training focuses on how to find and interpret the annual reports, 10-Ks, investor presentations, news stories and analyst reports that are easily accessible on the Web today. The trick is to give salespeople tools that take them right to the information they need: what results the company is trying to achieve, how its performance stacks up against its competitors, what strategies it has put into place and what financial metrics matter most. Then they have the ability to walk into a meeting with an executive and demonstrate their knowledge of the customer's business immediately.
The real power in the examples above is delivered when increased customer understanding and fluency is seamlessly integrated with other content that helps salespeople actually apply their knowledge. Sales forces accelerate their own results—and those of their customers—when they link business acumen to strategic account and opportunity planning, questioning, collaborative negotiation skills and even sales management activities.
Some sales forces have extensive training curriculums. Others develop content on a just-in-time basis. But how many have business acumen components? More importantly, does yours?
Jonathan Hodge is CEO of the Scottsdale office of BTS. Lou Schachter is the managing director of the global sales practice at BTS, as well as the co-author of The Mind of the Customer.
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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