I’ve been seeing this distinction first-hand among salespeople I have encountered of late.  I’m not sure there is a clear-cut sales ability towards product vs. service sales, but I do know that certain salespeople have skills and aptitudes that support one over the other.  In that vein I give you a quick breakdown of sales traits that come from these two forms of selling.

Product Sales
-Quantity-focused – the approach is to close frequently and success is measured in total numbers
-Speed first – fast, frequent closing is their approach, 1-call closes are their ideal
-Off-the-shelf – typically they prefer to sell a pre-designed solution
-Discount – their drop-close is to discount

Service Sales
-Quality-focused – the approach is to find the bet fit solution and success is measured by customer retention
-Thoroughness first – details are the key to closing here as they have to qualify need in depth
-Custom – most sales involve crafting a solution from existing pieces, but few are truly off-the-shelf
-Include – their drop-close is to add pieces to the solution for same price

Ok, it is a quick list, but you get the idea.  My vision is that successful salespeople need to harbor abilities from both product and service sales.  However, there are salespeople who are engrained towards one side or the other.  This hardening of the categories becomes evident when they wander over to the other side of the sales tracks and try to succeed there (yes, I mix metaphors).

I know of one salesperson who is presently attempting to cross this divide and it is not pretty.  His entire approach is rooted in the other format which has led to bad decisions, poor strategies and limited sales.

When hiring salespeople, the first indication is the candidate’s experience.  The second indication is their sales approach.  Make certain these are two tools you use in your hiring process.

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I have recently come across the Social motivation when assessing some sales candidates for a couple different customers and now I just heard a sales rep on the radio revealing his motivation.  Here is what the salesperson said on the radio:

I just met with a company yesterday who was paying almost twice as much to our competitor for the same service.  They were getting ripped off and it isn’t right.

I don’t deny the nobility of his position, but the reality is that very few services are exactly the same (despite prospect’s claims).  A strong salesperson will define their value to the prospect who will make a decision about that value.  It may be that the prospect simply sees something in that company’s product/service that they require/need/value.

My concern for the salesperson on the radio is that he is unconsciously removing any differentiating value from his service.  He is turning the decision into one based solely on price.  That is a prospect move!

Here is where the Social motivation undermines salespeople.  Their natural desire to help others without expecting anything in return undermines their selling ability.  Again, it is a noble motivation and I personally wouldn’t want to live in a world without many Social motivations.  However, sales is not for the feint of heart.  Strong salespeople are consistently assessing the return on their investment of time, resources, money, effort, etc.  Salespeople need to determine if they have a strong prospect…and the faster they can make that determination, the more they can sell.

To be fair, there are a few sales positions where a Social motivation can thrive.  We once assessed a flourishing sales team at a company that provided a product for young mothers.  The team was successful and almost every salesperson was a Social.

But if you are hiring for sales, your best avenue is to hire strong Utilitarians.  If you are uncertain of your candidates’ motivations, we can help.

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I do some IT consulting work on the side as a hobby/pastime.  Call me a geek.  In that arena, I have a customer who has been battling to get some information from a prospective vendor.  He wants to use their services but has had trouble getting a response.  Finally, today he got a response.  His summation was filled with wisdom:

Coming in obnoxiously late and extraordinarily high priced is not a good place to be.

I couldn’t agree more.  And I’ve been there myself in previous sales roles.

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This story from abcnews.com carries some weight in terms of a real economic forecast.  It isn’t good:

More of America’s largest companies will shrink their staffs than will hire in the next six months, according to the latest survey of their CEOs.

Nineteen percent of the CEOs expect to expand their work forces, while 31 percent predict a decrease in the next six months, according to a quarterly survey from the Business Roundtable released Tuesday. That’s slightly better than the 13 percent who expected increased hiring three months earlier. At that time, 40 percent forecast cuts.

Granted, the trend is good, but the actualities are not.  2010 is shaping up to be a lackluster hiring climate.  We work with CEO’s in some of our customer organizations and we are hearing similar reports.  The general consensus is to sit tight until there is some discernable signs of a recovery.  A healthcare overhaul, cap and trade and tax increases are not helping stimulate the economy (emphasis mine):

A new question on the Roundtable survey asked CEOs to identify their greatest cost pressures. The largest group — about one-third — cited health care.

One other note is the 2010 revenue forecast.  I don’t know if I have ever seen a more difficult task for our customers.  The uncertainty is astonishingly high.  One thing it does point back to – you better have strong qualifying salespeople on your team in this climate.  If not, your forecast will be replete with deals welded to the 90-day close…that never close.

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Part of what I do in our company is ride around with sales reps on sales calls.  The goal is to get market information that isn’t easily discovered – how the prospects view the solution, what degree of buzz words are incorporated, what stalls and objections occur most frequently, etc.  You never learn more about a sales position than when you are in the trenches with the salespeople.

That being said, I came across this article in SalesHQ.com.  The format is a theoretical construction of a mistake-ridden sales call.  The article is a bit exaggerated, but not by much.  The concluding exchange is priceless:

“Well,” Arnie responded, “I understand that your business has used Sure-Fire Pest Control Company for the last few years. As you know, I represent Ultimate Protection Pest Control. This seemed like a good time for me to come and talk with you.”

“Why now especially?”

“Oh, because I’m sure you’ve read the newspaper stories about the lawsuit a local restaurant filed against Sure-Fire Pest Control. Radio and TV covered the story too, so it’s unlikely you missed it. The restaurant lost its sanitation rating because customers complained of rats and roaches running under the tables. I’m sure you don’t want to do business with Sure-Fire any longer.”

I believe it is Emeril Lagasse who likes to say “Bam!”  Here is the Bam! from the author:

Not only is mistake number five more common than you’d guess, it is also a colossal blunder. Citing bad news about your competitor will not gain positive ground for you. The opposite happens. Why? It appears that your company has no clear advantages to offer, because you haven’t mentioned them yet. If your only benefit is that someone else is worse, you’re doomed to lose the sale.

Absolutely right.  The prospect’s first thought is that you do not have anything better to offer.  I call it a vulture move – you are slowly circling a carcass hoping for an easy meal.  If your salespeople are incorporating any aspect of this move, you need to put an end to it immediately.  I observed a sales call where a salesperson in a highly-competitive market attempted just such a move.  I instantly observed the prospect turning on their mental screensaver as they simply waited out the remainder of the time allotted to the call.

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This is from the JustSell.com crew – it is a description of things salespeople do to upset prospects.  I found it quite comprehensive:

They (Ed.-prospects) don’t like it when…

• we’re pushy
• we call too much
• we’re “just checking in”
• we’re unprepared
• we’re disrespectful of their time
• we keep calling if they say they’re not interested
• we don’t respond fast enough
• we appear not to understand them, their industry, their situations, and their challenges
• we don’t work in their interest
• we don’t listen
• we don’t know about our own products/ services
• we’re rude, arrogant, or inattentive
• we’re vague or unclear
• they’re made to feel like they’re interrupting us
• we seem like we’re “just trying to sell them something”

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I’ve noticed in some companies a casualness regarding sales forecasts from their sales team.  Heck, I’ve worked for some companies that shared that casualness.  Some companies view it as an exercise in Excel gymnastics.  Others view it as a coffee klatch activity.  One customer of ours had multipliers (<1.0) for certain sales reps since they knew those sales reps’ forecasts were inflated…greatly.

Here is a news story about a local company and a significant change to their forecast.  The setup:

Digital River Inc. shares plunged Monday after the e-commerce services provider announced it will lose its largest customer.

Cupertino, Calif.-based Symantec Corp. (NASDAQ: SYMC) notified Digital River on Oct. 9 that it will not extend its e-commerce agreement. That deal, under which Digital River provides a variety of e-commerce-related services to Symantec, expires on June 30, 2010.

Ouch.  Most people know that Symantec owns Norton Anti-Virus so that is a big loss.  How big?

In 2008, sales of products for Symantec accounted for 24.3 percent of Digital River revenue and sales derived from proprietary Digital River services sold to Symantec consumers accounted for 9.4 percent of Digital River revenue.

Over one-third of their revenue gone.  I’ve never been a fan of companies having one customer be so dominant in their revenue stream.  And now that one company won’t be!  Here is a pristine example of when a sales forecast can be a lifesaver for a company.

Here is the CEO’s explanation to the street (emphasis mine):

“Our company is financially strong, our new business pipeline remains healthy, and sales activity in the software, consumer electronics and business-to-business sectors continues to grow,” he said.

As an investor, I would sure like to know what measurements constitute “healthy.”  This scenario, losing a large customer, plays out often in the sales world.  The companies that can absorb such loses are the ones that know how to secure new (i.e. replacement) revenue from new customers.  An accurate sales forecast is the tool that will guide the Chief Revenue Officer to the quickest path for revenue replacement.  If I were in that role, I would be doubling efforts on the best short-term prospects on the forecast.  If my forecast was little more than notes on a napkin, I would be updating my resume.

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I come across this often – a company wants to hire a superstar salesperson and the hiring manager’s first instinct is to find a loquacious talker.  Perhaps you have seen this approach too?  Clearly no readers of the Hire Sense would administer this approach in their hiring.

Right?

Ok, maybe not.  The point is that smooth talkers are not categorically the best salespeople.  I am appreciative of good communicators, but being good at talking is the lesser part of communication.  Being an active listener is more important.  This fact is often overlooked in sales hiring.

The reason this ability is important is that is supports the foundation of successful selling – qualifying.  Salesopedia.com is featuring an article this week by Kelley Robertson that addresses this point (my bold):

The most common mistake sales people make is to immediately launch into a product presentation or “pitch” when they first meet their prospect. They extol the virtues of what they sell and tell the prospective buyer how good, fast, reliable, inexpensive or easy to use their product is. They talk, talk, and talk hoping they’ll convince the buyer that their product or service is of value.

The problem with this approach is that the “pitch” seldom addresses the issues or concerns of the buyer. Because their needs have not been addressed, there is no compelling reason for them to consider using your machines or to change vendors. If you really want to give prospects a reason to buy from you, you need to give them a reason. One of the most effective ways to do this is to ask a few well thought-out questions to uncover what is important to the prospect.

Exactly right.  One of the more overlooked aspects of a sales interview is to pay attention to a candidate’s questions, both the content and the sequence.  I try to write all of them down in an interview to review them afterwards.  The candidate’s questions in the interview provides a glimpse into their qualifying ability without asking the candidate about it.  It is most important that you, the hiring manager, observe this ability closely both on a phone screen and during a face-to-face interview.

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This is the opening sentence from an email caught by my junk filter:

Sorry for not having the pleasure of knowing your mindset before making you this offer as it is utterly hell confidential and genuine by virtue of its nature.

“…utterly hell confidential” is a new construction for me.  This example is anecdotal – the larger issue is the prevalence of email communication in selling.  The days of cold calling are receding while initial email communication is advancing.  This fact adds another factor to successful sales hiring.

The ability to be effective on the phone will always be important in successful selling, but the email approach is replacing the cold call.  In our business, we’ve worked hard to attract interest in our services.  The attraction piece, where prospects contact us, has moved to a 50/50 phone call vs. email split.  When we started this company over 5 years ago, almost all of the initial contacts were phone calls.

Unfortunately for many salespeople, writing ability seems to be a less common skill in today’s world.  Ridiculous sentences like the one listed above are becoming more common.

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Funny article from Saleshq.com:

While working my way through college, I sold vacuum cleaners. Trying to close a sales call, I asked the prospects if I could use their phone to call my boss and see if I could get them a better price. Of course, I already knew what I could sell it for. So instead of dialing the whole number and bothering the boss, I only dialed six numbers. After a few minutes of acting like I was talking to my boss, the phone started making that really loud beeping noise that lets you know the phone is off the hook. They asked me to leave.

R-O-O-K-I-E.  I think it is amusing to see these old moves in practice…though it is a bit scary to think they are still going on today.

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