The years and numerous rejections have taught me that 50–75 percent of a successful sales effort depends on a formalized discussion of the competitive advantages of the product or service you offer. Developing a coherent “story” that you can tell the prospective client shows professionalism and avoids the mistake of omitting big advantages that you can offer the client. You can integrate this story into a verbal presentation, a PowerPoint presentation, a brochure, a website, flip charts, and numerous other presentation methods.

Formal presentations are especially important when providing technical comparisons with competitive products. Let me describe a real-life example where the presentation made all the difference.

I had a client who was in the business of providing packaged candy and cheeses as a method of fund-raising for high school and college football teams and bands. The methodology was as follows: The school’s athletic director or band director would select a provider of a food or candy package. The provider (my client) would then provide brochures to the students so that these packages could be sold in a fund-raising program. These sales would be to friends and family. The students would collect orders and money and turn them over to the provider. The provider would then deliver the specified packages to the school for distribution by the students and would split any profits with the school 50/50.

My client had been in business for 20 years and had been quite successful in its efforts. It had a warehouse and used seasonal labor (military spouses) for its programs, which occurred mainly in the spring and fall at the beginning of school sessions. Everything was going along swimmingly until some “moms and pops” decided to go into the business, offering limited services but modifying the split of profits to 60 percent for the school and 40 percent to the provider. This 10 percent swing would have driven my client into a break-even or a loss position if he were to match their pricing structure.

I began questioning him about the advantages and disadvantages of his business versus the others. First of all we determined that the customer was the band or athletic director and that these people tended to be conservative in their thinking and risk taking in most decisions. In other words, if they were to select a provider and program, their objectives were clearly to select a program that:

I now asked my client about his selling technique. He stated that he would go through his brochure verbally with the potential buyer and describe the financial arrangements, hoping to get the business.

I asked my client whether, in view of the conservative nature of his customer, he had ever had a failure to deliver. He stated that once and only once in his time in business, due to a late delivery of food, he was unable to provide product in a timely manner, and as a result the program did not deliver the expected profits. He then “made up” the difference to the school. I leapt upon this disclosure, stating that he had offered a warranty even though it was only once. I also asked if he had insurance in case anyone got sick from the food products. He stated that even though the food companies stood behind their products, he carried an additional $5 million in liability insurance (which the moms and pops did not). I finally asked if any of his customers ever visited his facilities and saw the substance and capital invested in his business. The answer was no!

We then decided to modify our marketing program to reflect our advantages and play upon the concerns of his customers. We decided that a set of flip charts was the way to make our presentation. There were four charts.

The first chart was a huge blowup of a gold-edged document that was titled “Warranty.” It offered the customers an assured payout on their programs. In addition, the salesperson would carry a pad of warranty documents that he or she would fill in for the specific situation. Because the company controlled the warranty amount and had a negative event only once, it represented a low-risk sales tool that the small operators would be loath to match.

The second chart was an enlarged version of the client’s $5 million insurance policy, which assured the customer that no matter what occurred, the purchaser was adequately covered. Of course, small operators could not match this cost.

The third chart contained photos of the plant and facilities to show that a company of substance stood behind the program.

The fourth chart contained the brochure to show the selection of products available.

In addition to all this, I asked the owner to raise his prices 10 percent with the understanding that the 10 percent increase would partially offset the differential in split.

The idea really worked! Within one year, most of the “moms and pops” were out of business because they could not compete with the concept that my client was selling. Yet we had not changed anything except how we presented those advantages that we already possessed.

In a retail environment the “story” must be told through advertising and the physical appearance of the retail establishment. It must say that you are a discount store or a high-end, high-quality location. In the instance of the jewelry chain in Chapter 5, it had achieved almost perfect market segmentation through three types of stores.

The first was a branded small operation designed for the youth market. It carried lower-priced trendy jewelry that was affordable to the 16- to 25-year-old purchaser who was very style conscious. The quality of the jewelry was very good. The store was designed to appeal to a very young crowd and used very slick displays, with its advertising carrying the same theme.

The second level was designed to appeal to upscale 25- to 50-year-olds; it included very fine watches and designer jewelry with prices suitable for an affluent and upwardly mobile client. Again, the story was completed through advertising that appealed to this type of customer.

The third brand was for senior, more mature customers and had its own store design. It carried jewelry and gift items and emphasized service. The trio of businesses recognized the needs of each of its types of consumers precisely and covered the potential market.

The point of all this is to recognize your story and use it to market to your potential client base. If your story doesn’t work, change it! And don’t be afraid to modify it or fine-tune it. Turnaround people are very adept at recognizing when a story is no longer effective and are prepared to develop a new one that works.

I once ran a company that was dedicated to selling its products through distributors exclusively while its competitors utilized multiple channels such as direct sales and Internet sales. We were complimented for sticking to a “price” model and for being true to our distribution partners. It was a mistake because our competitors grew at a faster rate than we did and generated greater profit per sale.

As the end user becomes more and more sophisticated and the number and types of channels to the consumer grows, each company must decide for itself what channels it must use. The sophisticated company uses more than one channel to drive sales.

The last few years have brought this major dilemma to many providers of goods and services. An analysis is necessary to determine the best channels for a company to reach its customer since each channel carries its own advantages and disadvantages and cost/profit structure. Figure 12-1 gives an example.

By putting estimated volume, cost, and profit numbers to the examples I have given, you can develop a distribution matrix that will work for your specific company.

Again, most successful companies today utilize a multichannel approach to the marketplace. My error in operating the distributor-dependent company I mentioned was in assuming that loyalty to members of my distribution chain would garner greater effort on their part, hence greater sales for my company. The truth is that each portion of the channel serves a different purpose and a company should utilize the best mix for its needs.

There have been volumes written about motivating a sales force. I wrote about incentive programs in Chapter 6, but at the beginning of this chapter I stated that my philosophy with sales personnel is now almost entirely based upon their ability to deliver that which is promised.

I have found that the most effective way to drive a sales force is through meticulous call planning and follow-up. By having your sales management develop a system of daily call assignments (which provides a salesperson with a mix of new and existing clients) followed by a reporting system that indicates if the call was made and its results, you can gain control of the process. Today’s computer-based systems combined with handheld personal digital assistants has streamlined the control and reporting processes dramatically.

Needless to say, one must hire motivated high-energy sales personnel, but some of the dos and don’ts I have found over the years are:

All this assumes that you have a dedicated internal sales force; external sales forces such as hired independent representatives and distributors require even more incentives because they are not employees and tend to be unwilling to adhere to the call plan I mentioned earlier. This means constant interaction to ensure that they are following through on suggested call schedules. Again, deliverables are the key. If a distributor or an external representative does not deliver agreed-upon numbers, it is time to ride another horse.

In retail sales, often the sales personnel view themselves as merely order takers and cashiers. One of the retail chains that has raised retail sales to a fine art is Nordstrom^®. Its sales personnel suggest items to customers and personally follow through with thank-you notes to customers, alerting them to sales events and items in which they might be interested. They help drive positive sales effort and generate multiple visits to the store. This effort is the result of Nordstrom’s keen perception and understanding of its customers and excellent training of its own floor-sales personnel.

I like to put it this way: There is no amount of pricing that can offset a poor product or an improperly performed service.

One of the first things I examine when I enter a company is the quality of the product or service that is being provided. Often sales are negatively affected by poor quality or technological obsolescence. I will discuss manufacturing for profit in Chapter 14, but for now let’s examine the problem of products or services that do not match the consumer’s expectations.

I once was called in to turn around a company that had developed a fully automated system for grinding glass lenses for eyeglasses. Unfortunately, a whole new technology—plastic lenses—had emerged and rendered the products obsolete. The owners needed a course of action that would save them extensive capital investment.

I suggested two steps for them to pursue:

It was because the managers could not think outside their traditional markets that they were failing to recognize that their “primary” market was gone forever.

Recently I purchased airline tickets online from a division of my Internet service provider. Something went wrong and I received tickets for a date other than that which I had ordered. When I tried to contact someone who could correct the problem, I kept getting the service desk in India, which was not authorized to provide any assistance of substance and refused to recognize the error on its part. After 16 phone calls I gave up!

Even though the tickets were deeply discounted, I swore that I would never use the service again and would discourage everyone I know from using it as well. In our highly wired world, instant communication allows us to shop many places electronically, but it also allows us to express dissatisfaction to a much broader base than in the past.

There is no more perfect example of this than the restaurant that serves poor-quality food and provides bad service. There are a host of websites rating restaurants, which allows consumers to provide feedback.

So what are the rules? Very simply:

Often part of what a turnaround person brings to a company is a realistic evaluation of the goods and services being offered and what needs to be changed. In Chapter 5 I asked you to identify your product’s advantages and disadvantages. This analysis can provide clues as to the adequacy of your product offerings.