Small Business Boomers

The “So What?” Factor

by jim on July 22nd, 2007

Nothing happens until somebody sells something.  Rule 1 in all of commerce.  Sales people are often portrayed in a negative light, but if you haven’t got many widely successful sales people your business is in big trouble.  How do sales people become wildly successful?  They offer products and services that meet the significant needs of a major client base over a long period of time.

There is a fallacy that I’ve heard over the years when discussing the statement above.  It comes in the form of “needs development” talk.  Ignorant managers say things like “make the customer want it.”  In a consumer environment that may work in the short term, but Lincoln was right about fooling people.  In a business to business sales environment it almost never happens.

Let me say it another way.  If your major market is selling products and services to businesses rather than consumers, you cannot create a need.  The businesses create and define their own needs.  Their vendors fill those needs.

Let me give you a simple example.  In the newspaper industry the two largest costs are people and paper to the point of excluding all others.  I had a friend who tried to interest them in a service that would save them 30% on their cost to ship small packages; FedEx, UPS, etc..  The service works, but the newspaper people were not interested.  The total yearly potential savings were less than a 0.1% savings on scrap from paper used to produce the newspaper for a week.  On top of that the process to make these shipping savings would require the re-tooling and re-training of the people who will use the new process.  The disruption of the existing business process has a real cost also.  Finally, there is the cost of failure.  What if the cost savings is only 10% or 20%?  What if the publisher’s administrator gets upset over the change and refuses to use it?  Obviously, management at this newspaper shouldn’t spend the time on this service.

I offer this real, but rather extreme example to make a point.  When selling business to business remember that decent business managers manage by exception.  They have a limited number of things on which they try and concentrate their time and brain cycles.  If your product or service is going to distract them from that limited basket of important considerations it better be financially substantial.

As in a consumer environment you have to do market research in a business to business environment.  You need to call on potential clients to determine their need for a particular product or service.  You need to understand how they justify spending for your product within their organization.  You need to understand why they would buy this product from you rather than a current vendor.  Finally, try and close a sale.  Ask them to spend the money to buy your product or service.  Many people will go along with something until you ask for money.  It’s the big qualifier. 

There are other questions you need to resolve, but if you get these covered it will tell you a lot.

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POSTED IN: Marketing, Starting Up