Lateral thinking is all about creating value. The value may be in better health, better wealth, better productivity or better security. Communicating value is an important part of creating value. A master lateral thinker can do both x10 thinking and x10 selling. At a recent business conference in Noosa Michael was invited to discuss the four biggest problems in selling …
In the 80s the BIG sales problem was: close the sale. This was oldsell. Sales managers would ask their salespeople: Did you close the sale? Customers hated oldsell. What damage and cost did oldsell have on the reputation of the sales profession in the 80s/90s?
In the 2000s the BIG sales problem is: word of mouth. WOM is newsell. Customers prefer newsell. So do shareholders. For example, when each year a single client wombats a new client. That new client also wombats a new client. How would you dollarize the value of that original client over 3 years?
MICHAEL’S TALK NOTES:
BIG Sales Problem #1 is ‘Too few WOMBATs’
WOMBATs are new customers that have been replicated by your existing customers. WOMBAT = Word Of Mouth Buy And Tell. When one of your satisfied customers replicates another satisfied customer, that’s a WOMBAT. WOMBATs replicate other WOMBATs. These are, of course, the most profitable and prized customers of all. WOMBATs are least costly to acquire. They are the least price-sensitive. They buy more and more often. They are more interested in new products and offers. They are most likely to do repeat business. And, they are the most likely to replicate themselves creating other WOMBATs. If you are not getting new WOMBATs every day then that’s a real business hazard.
BIG Sales Problem #2 is ‘Too Few REFERRALS’
The second most profitable business comes from referrals. Because they are more likely to buy they are less costly to acquire. They are more likely to become WOMBATs. Referrals have a high lifetime value to your business. They are higher quality customers. Referrals are more likely to want to do repeat business. Not having a daily flow of healthy referrals is a business survival hazard.
BIG Sales Problem #3 is ‘Too Few REPEATS’
Unhappy customers defect and do not give repeat business. They are not loyal and they bad mouth to others. They have short and less profitable relationships with your business. If salespeople are not servicing existing clients well they do not do repeat business. Losing a client doubles the acquisition cost and minimizes profits and shareholder return. Too few repeats also reduces the likelihood of referrals and WOMBATs.
BIG Sales Problem #4 is ’Too low NPS Score’
The Net Promoter Score (NPS) is the current customer-relationship metric used by F500 and ASX100 companies like GE, Google, QANTAS and Macquarie. The score is calculated by subtracting the percentage of detractors from the percentage of promoters. On a 1-10 scale the NPS question is asked: How likely is it that you would recommend [brand] to a friend or colleague? GE demonstrated their NPS commitment by mandating up to 20% of annual bonuses of senior executives would have an NPS connection. How does your current NPS compare with your competitors? If the answer is “not well” then that’s a BIG sales problem.