TO: Dr. Scott Abbot, Dr. Mark Jeffreys, Dr. David Litchford, and Dr. Grant Richards
FROM: Grant Weaver
DATE: April 25, 2011
SUBJECT: Proposal to complete START YOUR SALES: A professional sales training program for small business entrepreneurs.
Statement of Thesis and Project Summary
I am creating a professional sales training program for small businesses with weak or no sales systems. It will teach specific direct sales skills and sales system building. This training is projected to last five hours and will include a live presentation with videos, role-playing, planning, and coaching.
Many small business entrepreneurs start their companies with a specialized knowledge in some technical field. Photographers, engineers, doctors, lawyers, and construction workers who want to go it on their own and want to be their own boss are examples of such entrepreneurs. However, a good majority lack key business skills and knowledge to effectively run their companies. It is not surprising then that, according to the SBA (http://www.sba.gov/advocacy/7495/8430) almost half of start-ups fail within the first five years.
One of these key areas that many small business entrepreneurs lack is selling. These technical experts may have a killer product or service, but lack the ability to effectively sell that product or service. Direct selling, to them, does not seem necessary or they do not think they have the right personality. Some believe direct selling to be manipulative and pushy. So they rely on word of mouth referrals, direct mail efforts, or other advertising methods with low response rates to build their clientele.
This training program, which I have entitled START YOUR SALES, will help small business entrepreneurs discover the value of direct sales in their businesses, teach them the basic skills, and show them how to effectively implement those skills into their businesses in a high-performance sales system. START YOUR SALES will provide the necessary skill set to dramatically increase clientele and revenues.
As a salesperson myself I have learned some valuable skills and have worked with some expert individuals who have mentored me in the field. I have taken the time to learn how to close a sale, build customer rapport, and overcome objections. Selling is deeply emotional and psychological. There is more to selling than product knowledge and confidence; a technical entrepreneur needs to understand why people buy and how to leverage that understanding to be able to sell their high quality product or service.
My thesis project will be to organize these skills I have learned from direct sales experience, experts in the field, the literature, and the existing popular sales training programs, into a program that will:
- Convince small business entrepreneurs to increase their direct sales force in their business strategy.
- Train and coach these entrepreneurs on the basic sales skills such as closing a sale, and effectively overcoming objections
- Establish a framework for a strong sales system including prospecting hiring, regular training, and time management.
I will begin by showing market data and giving my pitch and sales presentation on the need for solid sales skills and a strong sales system in every business. This data will show comparisons in different industries and how these two things make a large difference in small businesses. I will also show them hope through data that illustrates the large number of potential clients available if only they knew how to capture their business. This is one of the most important aspects of the program. Just the decision to start selling will have tremendous value.
Then a large portion of the program will be focuses on training the skills involved for effective selling. I have identified the set of skills that will be taught in the program and have listed them in the outline below. I will then show to how to effectively apply, and maintain the sales skills in a high performance sales system. This program will also focus on helping people better understand the psychology of selling by learning the importance of knowing why people buy, how to influence behavior, the role of confidence, etc. Sales people have a bad reputation for manipulating, and by helping people see the correct mentality towards selling, they will be more empowered to use these tools effectively.
For both parts of the training program I will use a mix of oral presentation, role-playing, planning, video demonstrations, and interviews with experts. The oral presentation will be scripted and done through a power point presentation to guide the structure of the program. The video demonstrations will include several examples of the skills. I will use actors to role-play common sales scenarios to show how to effectively use the skills in real life. The videos will use both good and bad examples of these sales skills. They will also be used to better keep the attention of the audience. I will also video record interviews with sales professionals on the different topics in the program. These experts will add validity and credibility to what I am teaching. I plan to interview at least 5 of these individuals. There will also be significant role-playing and planning exercises for the audience to practice and apply the principles.
Overall, START YOUR SALES will provide a classroom-style training to learn and practice basic selling principles and how to develop and apply a high-performance sales system that is lacking from many small businesses.
Review of Literature
Why Sales Skills and Systems are Essential
Sales skills are essential in the business world. A market is a place where buyers and sellers come together to do business. Sellers have long known that to be able to sell their products and services, they will somehow have to stand out from the others sellers in the market, especially if they have differentiated products. In a perfectly competitive industry, this would be unnecessary according to microeconomic theory, but the conditions for perfect competition are rare, making most industries monopolistic competitive and oligopolistic. Therefore, marketing and selling play big roles in the business world.
Many technician’s start their own business because they like what they do and want to do it on their own, however they do not usually have the right skills or knowledge to create effective business systems such as sales (Gerber, 1995). Robert Kiyosaki in his popular book Rich Dad Poor Dad (Kiyosaki & Lechter, 1997) emphasized the importance of knowing sales skills throughout his entrepreneur stories and especially in a conversation he had with a reporter. This reporter had an advanced degree in writing and asked Mr. Kiyosaki how to become a best-selling author. He responded by telling her she needed to learn how to sell to be a best-selling author. She thought she was above this and that good writing would be enough. He told her that she was a much better writer than him, but that she would never be a best-selling author unless she first learned how to sell.
Direct sales capture a large percentage of unmet demand. Response rates vary for different types of marketing methods. Research shows the difference direct sales can have on potential clients (Werner, 1995). Direct sales should not replace other methods, but should work in concert with those other methods to create the largest number of customers (Holmes, 2007).
One example is in curb-side recycling in Utah County. Many curb-side recycling programs in Utah County are voluntary/subscription programs where a household has to sign up and pay a monthly fee for recycling pickup. The waste management companies have done no direct residential sales, and have relied on promotional programs and advertising to get participation. City governments, who signed on with the waste companies, also had no interest in direct selling. Participation rates in these cities were pretty low (between 20-30%). However, when a few young sales entrepreneurs created the company, Involved Recycling, to outsource the sales efforts for the waste management companies, their sales reps signed up one out every three households they talked to that weren’t already recycling (Romano, 2011). This is means that at least 50-60% of households were willing to recycle if only direct sales were in place. That is double the number of clients.
According to statistics presented in the Ultimate Sales Machine (Holmes, 2007) for general markets:
- 3% of the population is in the ‘buying now’ market
- 6-7% are open to it
- 30% not thinking about it
- 30% don’t think they are interested
- 30% know they are not interested
Sales training programs have been very popular for decades. Dale Carnegie’s classic books including How to Win Friends and Influence People (Carnegie, How to Win Friends & Influence People, 1981) and The Quick and Easy Way to Effective Speaking (Carnegie, The Quick & Easy Way to Effective Speaking: Modern Techniques For Dynamic Communication, 1962) were geared towards the business audiences, particular sales people to be more influential and persuasive.
Most sales program have between 7-10 steps. These steps are generally very similar while some combine some steps. Research has shown that there is no specific set of persuasive or influential skills that work with every type of customer (McFarland, Challagalla, & Shervani, 2006). Effective sales people know how to adapt their presentation to different types of customers. However, the steps in these programs give general steps on how to approach customers while the applications of these steps change as you meet different customers. These steps generally include: prospecting, know your customer, building rapport, setting appointments, asking effective questions, building value, overcoming objections, closing the sale, and effective follow up (Holmes, 2007) (Hopkins, 2005) (Shook, The Perfect Sales Presentation, 1986).
It is generally agreed that the most important sales skills is closing the sale. Entire books (Ziglar, 1985) have been written on the subject with various techniques, and no sales training or book has not devoted a good portion of its contents to this critical skill. Knowing how to close a sale makes you a sales person, all the other skills will add power and efficiency, but without knowing how to close a sale, the other skills are not sales skills. One classic way to close a sale is to assume the close by asking a question that assumes a customer is agreeing to buy. For example, “Would you like to pay with cash or check?” or “Would you like to take this home now, or should we have it delivered later this week?”
An effective sale and close will influence to a specific behavior. In the classic book on leadership and change, Influencer by VitalSmarts (Patterson, Grenny, Maxfield, McMillan, & Switzler, 2008), the authors research how master influencers make effective change come about using multiple sources of influence. They highlight effective leaders such as Muhamed Yunus with the Grameen Foundation and Mimi Silbert with Delancey Street enterprises and how they influenced large groups of people to do incredible things. The book shows how the strategies of these master influencers to create such change by focusing on a specific behavior to influence. These behaviors, which they call Vital Behaviors, are the key and specific behaviors they are trying to influence to create maximum influence. Closing a sale is influencing a vital behavior, whether it is signing a contract, disclosing credit card information, walking a product to a cash register, or just saying yes. An effective sales person influences to a specific closing behavior and not to a vague one.
While most people see behaviors and the underlying motivation behind those behaviors, most of us ignore the underlying capability to do a behavior (Patterson, Grenny, Maxfield, McMillan, & Switzler, Influencer: The Power to Change Anything, 2008). Motivation to do something is dead when it is difficult to do that thing. However, remove the obstacles and motivation will become much more powerful. By making it easier for someone to say yes and buy, and making it harder for them to say no, you will have increased an individual’s ability to buy, and have compounded it with your sales pitch and motivation. Increasing the sources of influence you use on someone, by coming at them from more than one angle you are going to see dramatically better results.
In fact, when at least six different sources of influence are used, behavior change is ten times more likely to occur than if only one source is used (Patterson, Grenny, Maxfield, McMillan, & Switzler, Change Anything: The New Science of Personal Success, 2011). Most people only use one source, including average and mediocre sales people. As Chet Holmes teaches, you need to go after potential customers at least eight times to see significant results (Holmes, 2007). Chet, in his book, The Ultimate Sales Machine, requires his reps to be rejected twelve times before giving up. If you knew before you started that you would get rejected 8 times before making a close, but knew that you would close many of your sales, you would think differently about how to take rejection. Most people give up after the first rejection (Holmes, 2007).
Research has shown in many independent studies and fields, that people are more motivated by a fear of loss than a hope of gain (Tracy, 2004) (Peck, 1978) (Patterson, Grenny, Maxfield, McMillan, & Switzler, 2008). Showing someone that they are going to be hurt if they don’t buy is more effective than how someone is going to benefit. Effective sales presentations should use this high leverage tactic where possible. Save people from the tiger, don’t just try and give them candy.
Some sales training programs focus on motivating sales people to work harder or overcome the fear of rejection. Sales people are guaranteed to face a large number of rejections as they give presentations, assuming they are doing any presentations. Effective sales people will find ways to increase their self-esteem or confidence so that they are less affected by rejections (Peck, 1978). We see that all sales people become more confident and get more sales immediately after they make a sale (Tracy, 2004). This phenomenon shows that internal feelings of confidence have a very large impact on the number of sales made. It is for this reason that many training programs help people overcome their internal fears, through self-affirming statements, showing the statistics about rejection and persistence, etc.
Programs that focus on the psychology of selling emphasize the need for salespeople to educate themselves thoroughly about the products they sell to know their value. It is also helpful to sales people to be highly educated about the market they sell in to know what their comparative advantage is and how they compare to competitors. The more convinced a salesperson is about the value of a product, the better they sell.
High-Performance Sales Systems
High-performance sales systems can take sales skills and maximize them through effective strategies, policies, and practices (Holmes, 2007). Sales skills alone will not find the best customers, find you the best salespeople, get in front of the most people possible, etc. By changing the environment and structure a person works in you can make significant changes to behaviors and bottom line results (Patterson, Grenny, Maxfield, McMillan, & Switzler, 2008).
Let’s begin with how a company hire’s only good sales people. In a large meta-study of hundreds of companies, Good to Great by Jim Collins, shows that companies who ‘hire slow, fire fast’ create much more effective organizational human capital (Collins, 2001). The Good to Great companies would take a long time to put the ‘right people on the bus in the right seats’, and get the ‘wrong people off the bus quickly’ as a critical part of their HR policies. Chet Holmes (Holmes, 2007) also suggests this method for hiring sales people. While it may seem that a new sales rep, paid only on commission, costs no money if they do not make any sales, ineffective sales reps will hurt your sales force. It takes a lot of time to train sales people and you can waste a lot of time to not get any sales from them. Bad sales reps can also affect the morale and culture of the company and sales team. You will save yourself a lot of grief and time training people if you learn how to weed out the bad from the good (Holmes, 2007).
Holmes recommends that, to find the best salespeople you should reject every candidate in every interview to their face. Since you are looking for people with the type of personality that are willing to, and can effectively overcome objections, you should see this in the interview when you reject them. This process will eliminate almost every person interviewed. Holmes claims this is the only way to recruit sales superstars. While it may take considerable time to find such a superstar, Collins suggests this is a highly effective hiring strategy.
Formal training for new sales reps is necessary for high-performance sales systems. Many training systems in sales have a new sales person ‘listen in’ on an experienced one to learn the ropes and then put them on the phone. This ‘tribal method’ as Holmes calls it, does not teach good sales principles to new reps if they are listening to an experience bad sales person. The new rep cannot even analyze what is good or what is bad. Class room style training will give reps a framework to analyze their skills constantly. Then you can have them listen to experienced reps and even have them be able to tell them what they are doing wrong.
You must also have regular trainings with all reps to perfect and improve their skills. You must ensure they are all up to par. Weekly meeting with role-play sessions can show a manager where improvements are needed and can give the reps coaching as they are doing the presentations in a fake setting. People are more likely to use and remember skills and principles with this kind of regular repetition of training (Holmes, 2007).
Sales reps need to be consistent in their approaches to customers. Consistency means that every sales person in a company, finds prospects the same way, gives sales presentations the same way, and generally overcomes objections the same way. By giving each customer the same experience you can benefit in two ways: the ability to measure performance changes with the change in scripts or marketing, and repetition for the customers (Gerber, 1995) (Holmes, 2007). When customers get the same experience each time they are more likely to remember a brand and stick to a brand because of the repetition and reliability. It is imperative that each salesperson in a company is well educated about the brands so that their sales pitches are in line with their marketing campaigns. Without such consistency you will have greater variability among our salespeople. By finding out what your best salespeople are doing, and making your less successful reps do those same things, you can gain this consistency and raise the overall performance of your sales team (Tracy, 2004).
One of the fastest ways to double sales is to double the number of presentations made. You may have the best trained sales team but if you are lacking a good system to go through prospects quickly, then you are missing out on a good majority of your sales. Most systems are computerized (called Customer Resource Management) while some are sales friendly and others are not. You need to have a system that allows sales reps to easily generate lists and compiles information in a way so that sales reps can quickly call, or present to each customer and move on to the next. Good time management is one of the fastest ways to increase sales in a company (Holmes, 2007) (Shook, The Perfect Sales Presentation, 1986). When I started my sales firm in the summer of 2010, we did door to door sales. We got pretty good at making our presentations and the success rate was well over 30%. However, not everyone was home so we didn’t get to talk to as many people as we would like. What did we find? The faster the sales person walked from door to door, the more sales and hour they made. It was that simple, successful sales people walked quickly.
Sales skills and systems are necessary for capturing the largest number of customers. Small business entrepreneurs can learn these skills from various training programs available.
- The data (showing the difference between sellers and non-sellers, and the data on markets and potential customers).
- Your company and sales
- a. Why you are uncomfortable with selling.
- b. How that comfort zone is killing your business success.
- c. How your company’s revenues and clientele will increase dramatically with a stronger sales focus.
What is selling?
- Incorrect paradigms and mentalities of sales and salespeople.
- The true nature of selling in the business world.
Overview of training
- The Skill Set
- Systems knowledge
The Three Steps of Selling
1. Establish the Appropriate relationship
b. Establishing rapport
c. Knowing your customer
i. Needs assessment
d. Follow-up (customer service)
2. Building/Educating Value
a. Education is the key to a good sales presentation
i. Teach and set the buying criteria in your favor
b. Build value with good questions
c. Overcoming objections
i. The classics: Money, time, think about it, etc.
ii. Overcoming new objections before they happen
3. Closing the sale
a. Closing Behavior
b. Make it easy to say yes and hard to say no
c. Show immediate value (urgency)
d. Do it early, do it often
e. Different techniques and scenarios
1. Hiring effective sale reps
a. Reject them in your interviews
b. Hire slow, Fire fast
2. Regular Training and Role-playing
a. Classroom style training prior to observing
b. Set up schedule and skill set curriculum
3. Sales Scripts and Consistency
a. Selling a brand
4. Build lists: Best buyer’s strategy
a. Plan and coaching
5. Time management
a. Fastest way to double sales
6. The Psychology of Selling
a. The Psychology of Sellers
b. The Psychology of Buyers
• Why Sell?
• Start Your Sales
Schedule for Completion
•Background research (May 1)
• PowerPoint Presentation
o First Draft (June 13)
o Second Draft (Aug 1)
• Script of the presentation
o First Draft (June 27)
o Second Draft (Aug 1)
o Introduction (Aug 1) (This is done last, since it will draw from the other videos)
o Interviews with Professionals (May 16)
- Write questions (May 4)
- Nick Romano
- David Litchford
- Rob Metler
- Blaine Banbrow
- Bruce Jackson
o Acted examples of skills (June 1)
- Overcoming objections (May 23)
- Taking Control (May 23)
- Asking good questions (May 23)
- Closing the sale (May 30)
o Overview (May 30)
• Edit Videos (Aug 1)
• Handouts and exercises (June 1)
o Planning (May 9)
o Role plays (May 23)
o Assessments (June 1)
• Master Plan, Outline with time frames (presentation time frames) (Aug 1)
o First Draft (June 27)
o Second Draft (Aug 1)
• Advanced Public Speaking Course (July-August)
Carnegie, D. (1981). How to Win Friends & Influence People. Simon & Schuster.
- A wide variety of skills are illustrated in this classic such as, ‘Getting a person to think something was their idea, building rapport, showing sincere interest, etc.’
Carnegie, D. (1962). The Quick & Easy Way to Effective Speaking: Modern Techniques For Dynamic Communication. New York: Simon & Schuster, Inc.
- This classic book on business presentations and speeches gives a long list of practices in giving presentations such as using personal stories, how to organize a presentation, and building rapport with your audience.
Collins, J. (2001). Good to Great: Why Some Companies Make the Leap…and Others Don’t. HarperBusiness.
- Get the right people on the bus, get the right people in the right seats, and get the wrong people off the bus. HR hiring/firing strategy: hire slow/fire fast.
Gerber, M. E. (1995). The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It. HarperCollins.
- This book runs you through basic business systems for small business entrepreneurs. The POWER POINT marketing system shows a simple template on how to set up a script and test changes so that you can measure effectiveness. Gerber also demonstrates how consistency among sales people is critical; therefore sales scripts and role-playing sessions are necessary.
Holmes, C. (2007). The Ultimate Sales Machine: Turbocharge Your Business with Relentless Focus on 12 Key Strategies. New York: Penguin Group, Inc.
- This book is the book for building a strong sales system. He gives you time management skills, hiring, etc. Here you will find the ‘reject your potential hires to find superstars’ strategy. It runs you through market statistics on buyers and how to leverage those statistics. One of the biggest takeaways in the book is that it takes, on average, eight direct contacts to make most sales. This knowledge helps people overcome their fear of rejection if they know that they will have to be rejected that many times before closing.
- • A corporation fails every 3 minutes
- • A directorship changes every 32 seconds
- • A company changes control every 15 minutes.
- • 96 percent of all companies fail within 10 years.
- • 26,000 products and brands are introduced every year.
- • 16 percent to 30 percent of consumers change brand loyalty in one evening watching commercials.
- • 74 percent of consumers buy outside their favorite brands.
- • 29 percent of consumers do not read a newspaper.
- Hopkins shows how to build a good set of questions in sales presentations. He has identified specific types of questions and when how they are applied to close sales, build value, and overcome objections. A part of my presentation will include some question planning and building for sale presentations.
Jim, R. (2003). The Art of Exceptional Living. Simon & Schuster Audio.
- Gives the right attitude about business, and appropriate for the psychology of selling. Blaming company or product inhibits growth and performance. Successful employees look inward for problem solving and performance improvements.
Kiyosaki, R. T., & Lechter, S. L. (1997). Rich Dad Poor Dad: What The Rich Teach Their Kids About Money-- That The Poor And Middle Class Do Not! New York: Warner Books.
- Kiyosaki shows entrepreneurs the need to learn a variety of business system skills including sales. He effectively demonstrates this need in an interview with a reporter. He also began his career in sales, even though he was much more qualified to do other things. He felt he needed to learn how to sell to be successful in any business.
McFarland, R., Challagalla, G., & Shervani, T. (2006). Inluence Tactics for Effective Adaptive Selling. Journal of Marketing, 70(4) , 103-117.
- The authors’ research shows how the most effective sales people are able to adjust to individual buyer’s needs. Thought scripts are an effective tool for sales people; effective sales people can bring them to life and adjust the presentation according to individual buyers.
Patterson, K., Grenny, J., Maxfield, D., McMillan, R., & Switzler, A. (2011). Change Anything: The New Science of Personal Success. Business Plus.
- VitalSmarts’ new book on a narrower topic of influencing. The authors show the research on influencing individual behaviors. If you use all six sources of influence you will be ten times more likely to enact change.
Patterson, K., Grenny, J., Maxfield, D., McMillan, R., & Switzler, A. (2008). Influencer: The Power to Change Anything. New York: McGraw-Hill.
- VitalSmarts’ first book on influencing. Shows research on how to target and measure specific high leverage behaviors and how to manipulate the environment to encourage or discourage specific behaviors.
Peck, M. S. (1978). The Road Less Traveled: A New Psychology of Love, Traditional value and Spiritual Growth. New York: Simon & Schuster.
- This book suggests that all human mental illness is derived from some avoidance of suffering. People will avoid positive and healthy behaviors because of a fear that is will cause them some sort of discomfort. This happens more often as people age and become less open to new ideas. Effective sales people will recognize and empathize with these fears and minimize the pain of doing new things and maximize the pain of not doing new things.
Romano, N.A (2011). Increasing Curbside Participation Rates in Subscription-based Programs in Utah County. Provo: Brigham Young University.
- BYU Honors Thesis by Nicholas Romano, Executive Director at Involved Recycling. The report shows the data for direct sales in the recycling industry. Direct sales capture unmet demand.
Shook, R. L. (2003). Hardball Selling: How to Turn the Pressure On Without Turning the Customer Off. Sourcebooks, Inc.
- Shook shows the right mentality about high pressure sales. It is not about being pushy or manipulative; it is about clear communication, and doing business deals that you believe will benefit both parties. You realize that some people shouldn’t buy and you respect people when they make a final decision.
Shook, R. L. (1986). The Perfect Sales Presentation. New York: Bantam Books, Inc.
- This book gives a solid example of a full sales presentation and what to do before and after presenting. It shows a good example of how to get through gatekeepers to get to the decision makers, by using a voice of authority and ambiguity.
Tracy, B. (2004). The Psychology of Selling: Increase Your Sales Faster and Easier Than You Ever Thought Possible. Nashville: Thomas Nelson, Inc.
- Focuses on both the psychology of the sales person and the psychology of buyers. The most effective time to make a sale is right after you have made one. Confidence plays a big role here. The fear of loss is greater than the hope of gain.
U.S Small Business Association. (n.d.). What is the Survival Rate for New Firms? Retrieved April 22, 2011, from U.S. Small Business Association Website: http://www.sba.gov/advocacy/7495/8430
- Shows the failure rate for new firms. About half of the new firms fail within the first five years.
Werner, C.M. (1995). Commitment, Behavior, and Attitude Change: An Analysis of Voluntary Recycling. Journal of Environmental Psychology, 197-208.
- Study on the level of commitment different marketing methods had on customers. It shows how signatures and direct sales led to higher levels of commitment than did other less direct means.
Ziglar, Z. (1985). Secrets of Closing the Sale. Berkley Trade.
- This classic book on closing demonstrates hundreds of closing techniques. It gives you a good overall picture of what it means to close the sale.