Knowing your business

‘Knowing your business’ was voted as the Number 3 Sales Trends for 2011. With business becoming more complex it should come as no surprise that clients want to work with business people who can sell, think about possibilities and create a work partnership with their businesses.

However, our studies with hundreds of sales professionals and middle management sales leaders reveal that the level of business knowledge and commercial acumen is poor or non-existent in many cases. Often trained on product but not on business practices, many sales teams are falling short in delivering value to their clients.

More and more is being asked of sales people and sales managers when it comes to business knowledge and commercial acumen. Gone are the days of just being a product expert. Sales people need to be competent business people too. Being able to understand strategy; how businesses, markets, and communities function; and where we, our products, services and business works in concert with our clients should be on our agenda in 2011. Today, clients expect to communicate and deal with a real professional who knows how business functions. They want to have business discussions not product discussions.

Our studies reveal that there is little, if any, discussion about the big picture or business strategy, or innovation or supplier integration. At best, supply and distribution are on the agenda along with product. A surprising finding was the low level of business knowledge and commercial acumen with sales managers in the technical product sectors – very focused on product quality, distribution and service they are not working at the required level to make business decisions and work strategically with clients.

What does business or commercial acumen consist of?

Using the Barrett’s Sales Competency Dictionary, here are some definitions of business competencies relevant to sales people:

Business Acumen: Demonstrates an understanding of how business works; understands the business’ commercial drivers and makes commercially sound decisions.

Financial Awareness: Develops strategies in order to optimise the potential profitability of sales and to measure the financial value of the customer-organisation relationship.

Market and Industry: Keeps up-to-date with relevant business, technical and professional knowledge and uses this information to understand market trends, customer needs and buying patterns.

Rosenbaum’s 2001 research into elite sales performers reveals that they are focused on the business as a key part of their sales strategies. Here are the key competencies they display that other less effective sale people do not:

Listen beyond the obvious product needs:

• Presses for more information to identify the business issues underlying the customer’s needs.
• Creatively draws on the full resources of the firm/business.
• Introduces customers to other suppliers and potentially valuable support resources.

Orchestrating internal resources:

• Treats company resources with the same degree of importance and creativity as their prospects.
• Invests time building collaborative, customer focused relationships inside their organisation.

Aligning customer and supplier strategic objectives:

• Looks to further the interests of their customers’ firms as well as their own.
• Keeps current on developments that affect customers’ business strategies including emerging trends and customers’ competitors.
• Welcomes opportunities to customise products or services and has a long-term perspective on the way they do business with customers.

Establish a vision of a committed customer relationship:

• Expands the customer’s understanding of what a business relationship can be.
• Builds a flexible relationship that is responsive to marketplace changes.
• Communicates achievable objectives for the relationship while challenging the creativity of both organisations.

Understanding the financial impact of decisions:

• Adept at understanding the financial impact of decisions.
• Uses internal resources in ways that are appropriate to the potential profitability of serving individual customers.
• Looks for ways to contribute to customers’ profitability.

So what’s the solution?

How do we ensure that this competency is alive, well and fit in the sales force? Should everyone have an MBA? The answer is ‘No’. Without some domain expertise, MBA’s do not make you a great operator either. It’s about combining experience, thinking and creativity with theory. Getting real life hands on experience allows you to see how the real world operates. An interesting article on Radio National highlights the problem of having an MBA without real life experience and the serious issues this has created in business: MBA – Mot Bloody Awful.

The answer lies is giving our sales people access to information or introductory training on the fundamentals in business, and the opportunity to review true-to-life case studies about how their business integrates with customers’ businesses is a good start. Including sales people in strategy development and business planning is also useful. Our 5 Step Sales Planning Process and Go-to-market training sessions have also proven to be a big hit with sales teams. It allows them to develop their own sales strategies and do the thinking and analysis on their business and that of their customers and markets.

Having business and commercial acumen is also becoming a prerequisite for human resources and procurement professionals. We all need to know how businesses work and function. The warning is if we continue to lead with product, we and our sales teams will be left behind in 2011. Like anything, it’s about blending theory with practice. Making sure our sales people can understand businesses’ commercial drivers and make commercially sound decisions in line with ours and our clients’ business strategies is key in 2011.

Remember, everybody lives by selling something.

Sue Barrett practices as a coach, advisor, speaker, facilitator, consultant and writer and works across all market segments with her skilful team at BARRETT. Sue and her team take the guess work out of selling and help people from many different careers become aware of their sales capabilities and enable them to take the steps to becoming effective and productive when it comes to selling, sales coaching or sales leadership.To hone your sales skills or learn how to sell go to www.barrett.com.au.