The Third Fundamental of Sales Know-How Knowing Who You Do It For
In previous blogs, I introduced The 6 Fundamentals of Sales Know-How, the evolution of my sales method, built through 30 years’ experience in sales – that works.
The third Fundamental, Knowing Who You Do It For, is understanding who your target customers are, how what you do helps them, the impact it has on their business and how to become confident, key member of their team. You cannot be all things to all people, so being very clear about who your target customers are, where they are and how to get to them enables focused activity. The Knowledge Quadrant provides a simple, high-level framework to kickstart your strategic sales planning and start clarifying Who You Do It For.
Business planning, marketing and strategic sales planning cannot be conducted in isolation. The environment within which you operate and the factors that influence it should be taken into consideration. Any business environment is impacted by both external and internal factors. Typically, these factors are referred to as the macro- and micro-environments.
The macro-environment is the outside forces that impact your business – the ones the business has no direct control over. Strategic business planning will typically study the macro-environment by way of a PESTLE analysis, which identifies the Political, Economic, Social, Technological, Legal and Environmental variables that exist. These variables are not unique to any single business. They impact all business entities and influence high-level planning.
The micro-environment is your business’s nearby environment, which it operates in directly on a day-to-day basis. Understanding the micro-environment and planning accordingly is vital for sales success and identifying Who You Do It For.
The Knowledge Quadrant represents four key micro-environmental factors that must be understood for effective strategic sales planning:
1. Market – What is the overall possible market and where is your target market within that?
2. Customers – Who are the customers you help the most?
3. Product – How does your product help those customers and who else could it help?
4. Competitors – Who else is playing in your target market and how do you measure up?
The more you can understand about each of the four aspects, the better positioned you are to make educated and intelligent decisions regarding your strategic sales planning. Basically, you’ll be really clear where your space to play is and who you want to play with.
Let’s look at each of the four aspects of the Knowledge Quadrant in a little more detail:
Market
How well do you know your market?
How does your market work? Is it through direct interaction with customers or are there opportunities for collaboration? Are there strategic alliances within your market that can help promote your company? What corporate relationships do you have that can be leveraged? Geographically, where is your market and what are the typical industry sectors?
There are a number of strategic approaches to modern marketing, but one I like, particularly for B2B marketing, is STP or Segmentation, Targeting and Positioning. STP works well and is easy to apply.
The typical steps are:
Market segmentation
Market targeting
Positioning
Planning
Exploring these steps in greater detail as they relate to your business provides a structured approach to developing your strategic sales plan. Developing a full plan requires appropriate research, however, you may be surprised by how much of the necessary detail you already know.
Market segmentation is an approach to identifying target customers for your products and services. The process divides the market up into groups or segments based on common needs or characteristics.
Market targeting follows the segmentation process. The next step is to evaluate and select target markets. This enables your company to focus your marketing efforts and activities.
Target market evaluation should be comprehensive and follow pre-defined criteria that ensures alignment with the company’s overall strategic goals and considers resource capabilities and ability to succeed.
Typical considerations include:
Size and accessibility
Competitive advantages
Relationships
Sustainability and profitability
Internal capabilities
Competitor skillsets
Positioning occurs once the target market segments have been selected. This is how the company and its offerings are positioned within those segments needs to be defined. This positioning is how you wish to be perceived from the perspective of the customer, relative to your competitors. Having worked through the process thus far, a clearer picture of the overall market will have emerged, enabling educated decision-making.
Typical considerations include:
Brand proposition
Industry value proposition
Sweet spot identification
Value strategies
Customers
Who are your customers and why do they use companies like yours?
My product or service only exists and succeeds because there is a need for it in the market – a problem to be solved, as you know. Who are the customers that use your products and services?
There can be many types of customers and buying channels. Understanding the buying channels your end customers use to buy your products or services is important. For example, if your end customer is a manufacturing plant purchasing new equipment, that equipment could supplied by a contactor, supplied by a project management company, purchased directly or purchased through a buying group. Knowing this determines who you need to work with.
Consider the types of customers that work with your company. Do you know why they work with you? Be specific to type – it’s not why they use your products and services, but why they use your company. Knowing this allows you to understand your secret sauce and how to replicate it.
Product
How do your products and services help your customers, and how well do you really know this?
You may already understand this from the SAVE model discussed in the first Fundamental. Understanding your product is about really understanding its application in your customer’s world, using their language in relation to their pain points. Being able to express it in the old F.A.B. format is important – as explained in the sandwich example in Chapter 1. “We offer X so you can do Y, which means Z…” As a salesperson, you need to nail Z – that is the culmination of your problem-solving mindset.
Remember:
Understand the pain points
Understand how you solve them
Understand the business impact
Quantify it, articulate it
Relate product to problem.
Competitors
How well do you know your competitors?
Understanding how you differ from your competitors allows you to highlight your competitive advantages. This applies to not only your products and services but your company itself: its service, culture and team.
Be aware of your competitors, but don’t fear them. I’m a firm believer that business, in particular sales, is like sport. We can’t all play for the same team. We should respect our opposition and, at the end of the day, be able to sit down and enjoy a coffee or a beer together. Naturally, the conversations need to be above board, but life is too short to get wound up with attitudes like “They are the opposition, so I can’t talk to them because they are evil!”
Trade shows and events are interesting places to observe competitor interactions. From posturing peacocks who like everyone to know they are in town to timid turtles who avoid their competitors at all costs, you will see it all. Again, just be you and treat people the way you would want to be treated.
Do you know what your competitors are they known for (good and bad)? What are their strengths, and what are their weaknesses? Focus on tangible items that actually mean something in the market. There is no point in focusing on what you perceive as a competitor weakness if customers see it as being irrelevant.
Do you know what your advantages over them might be and therefore where your opportunities might be? Again, focus on tangible items that actually mean something in the market.
Don’t fixate on your competitors but understand your strengths and play to them.
The Knowledge Quadrant will give you clarity on your sweet spot in the market and your target customers for new business – that is Who You Do It For.
Let’s recap
The Knowledge Quadrant provides a simple framework for identifying where to play.
Your target customers for new business are those whose problems you can help solve the most profitably in your niche.
The more you understand about your Market, Customers, Products and Competitors the better.
Next up it’s the Fourth Fundamentals of Sales Know-How – Knowing Where To Do It.
But if you can’t wait until then you can purchase my book now here.
If you want to evolve your sales approach to be more consultative and effective, I’m here to help. Check out my services or contact me directly for a bespoke programme of sales coaching at hello@iancartwright.co.nz