Sell Like a Business Owner

Successful and productive salespeople sell as if they were a business owner or CEO. They apply a strict return on investment mentality on all of their activity. They also manage their company’s assets as if they were their own. Salespeople who take on a business owner mentality view their territory or account base as their own company where they have total fiscal responsibility. Even though they may be salaried employees, they act as if they were an enterprising entrepreneur or someone who is on straight commission. The litmus test or desirability metrics they use to assess their activities is: If I had to put my own skin in the game, if I had to cover my own salary, benefits and expenses, would I feel comfortable investing it all in this deal? Asset management is just good governance.

John Hirth of Selling Dynamics, a former colleague and mentor, originally created this concept of CEO mentality. He recognized the importance of salespeople having full fiscal responsibility for their day-to-day activities.

When we created our sales methodology we decided to model the best practices of business owners and apply them to sales. In our research, we found that business owners were very effective in managing and controlling the key assets in their own business. They not only applied these assets to the operating side of their business, but also to the sales side.

In our findings, we discovered that business owners, when put into a sales role, were effective while selling, not because they were necessarily good salespeople, had good sales strategies, or were great at building rapport, but rather because they were masters of managing their assets. They knew when and under what circumstances to allocate their valuable assets to get an optimal return on their investment.

They knew that their assets of intellectual capital, time, trust, company resources, and self-concept/confidence were their leverage and control points in a sale.

Salespeople who adopt a business owner mentality judiciously guard and protect these assets and allocate them in a very selective manner. Their assets are their currency and capital. Through a balance/gain equation, they evaluate every opportunity for risk and reward. They are not only good asset managers, but they are also good risk managers. They apply sound oversight principles to all of their investment strategies.

The following is a description of each of the five assets:

Time is money. Moreover, as John Hirth would say, “It is a depreciating asset that is non-recoverable. Once you give it away, you can never get it back.” When most salespeople think of time, they think of it in relation to time management. John Hirth reminds us that “time management is an oxymoron. You can’t manage time but only what you do with it. In essence, you can only prioritize it.”

Too many salespeople make the fatal error of confusing managing their calendar and planning their week with time prioritization. After carefully examining their calendar, it wouldn’t be unusual to find that they logistically organized their week very diligently with activity that was low yielding and with prospects who were low probabilities.

John Hirth always reminded me when I was a client of his that “time kills all deals. The longer they sit there, the greater the likelihood they go south.” This was a very valuable lesson for me under his tutelage because I operated under the exact opposite assumption. My deluded belief was the longer they sat out there, the greater the chance I had to patiently hang in there, out-distance the competition, make a lasting impression with my prospect about my commitment and get them to feel a strong connection to me. I believe most salespeople feel compelled to be persistent, even at the cost of wasting their time, because it is the only option they have because they have poor selling skills. Poor use of time is definitely a symptom of lack of an effective sales process. The following reinforce this concept:

• There are always two winners at the selling event. The first winner is the salesperson who was awarded the business. The second winner (silver medalist) is the salesperson who lost quickly, easily, and effortlessly with expending minimal energy and time.
• The most underrated and underutilized sales skill today is knowing when to walk away. Salespeople who practice a business owner mentality know that selling is a game of efficiency. Learning to cut your losses is a great way to utilize time. You protect your asset of time when you realize selling is not only who to sell, but who not to sell.
• A lot of time is wasted and poorly allocated because of avoidance activity. Because salespeople generally loathe prospecting, they will spend an incredible amount of time chasing, groveling, and inappropriately following up on the same group of prospects who give them glimmers of false hope or throw them occasional bones, because the alternative is even more painful… prospecting. Wasting one’s time not only provides a false sense of security, it also provides a safe haven from prospecting.

One of the biggest complaints I hear from salespeople is the fact that prospects don’t respect their time. The reason they don’t respect their time is because salespeople demonstrate that they don’t respect their own time. Until salespeople respect their own time, they can’t reasonably expect that their prospects will respect their time.

In real estate, the mantra is location, location and location. In sales, the mantra is timing, timing and timing. Whether it is your information or your resources, proper timing and allocation will determine your yield or your percentages. Time your solutions when prospects are in a position to make decisions. Anytime before that, you put your time asset at risk.

The asset of time is also misappropriated when you over-rely on transactional selling. This style of selling is hugely time-consuming and costly. You incur the direct costs of selling over and over again each time prospects present you with an opportunity, as opposed to strategic selling, which is efficient and keeps down your costs of sales.

Intellectual Capital. Information is your intellectual capital. A salesperson with a business owner mentality plays their cards close to the chest and judiciously guards and protects their information and dispenses with it sparingly. As John Hirth says, “What you know can hurt you.” The problem with all our precious and hard won information is that there is an over-tendency to want to give it out early, often, and prematurely, resulting in salespeople being reduced to “free consultants”. To minimize free consulting, guard your asset of information as if it were a just-in-time inventory control system: receiving inventory right when it’s ready to be sold. You allocate your information when your prospect is in a position to make decisions. Your information represents your leverage and control points in the sales cycle. In the past, salespeople’s value was firmly established by the information they brought to the table. The information economy has changed all that. Since information is accessible freely and widely, salespeople’s value proposition has been neutralized and marginalized. Salespeople’s mandate now should be to get information, not give it. This totally changes the dynamics of a typical sales call.

You are now paid and rewarded for your questions, not your answers. No longer can you afford to build a product case. You have to build a business case, which is heavily influenced by your ability to garner important, privileged and sensitive information from your prospect.

Selling is more about what you don’t know versus what you do know. The prospect’s information carries the most weight. Yet, salespeople act as if their information is king and they invariably overplay their hand, in turn diminishing the importance and dignity of their prospect.

Trust. People buy from people they like. This used to be the old relationship tenet. Today, it has shifted to people buy from people they like, but far more importantly, they buy from salespeople who have the expertise, the patience, and the understanding to learn about their business in a way that no other salesperson could match. In other words, people they trust. Hence, the salesperson with the best understanding of the customer’s business will consistently outsell the salesperson with the best solution.

Salespeople who adopt a business owner mentality are discerning as to when and under what circumstances they will invest in a customer relationship. They know that they can no longer rely on their personality and charm to build trust. Their value in a relationship and the trust they build will come from building a business case, not a product case or a personality appeal.

Many salespeople fancy themselves as consultive sellers who build strong relationships. However, the reality is that many salespeople are merely empty suits. They are often goodwill ambassadors and overpaid customer service reps who do not bring substance to the party beyond good service, attention to detail and good follow up with a friendly and sunny disposition.

Due to the universal parity in products and services, salespeople’s ability to build trust and long-term relationships is their only remaining differentiator. Trust is the ability to build relationships and the skill to engage prospects at a deeper level. This happens to be the most sustainable competitive advantage companies have over one another in today’s marketplace.

To build trust you must first extend it. Trust is created when the salesperson puts their self-interest aside and honors their prospect’s freedom and independence to self-discover their own answers and conclusions, independent of the salesperson’s personal agenda.

Resources. Your resources are anything that costs your company money that you allocate to customers. Most salespeople’s behavior reflects the belief that their company has infinite resources. One resource that is constantly misallocated by salespeople is manpower. Ask yourself, how often do you do flimsy quotes and proposals that are prepared by estimating or by the technical department without any consideration to cost? If you were the owner of your own company and you had to pay all those direct costs out of your pocket, you would probably think long and hard about it.

Your resources are your leverage. Allocate them according to when you can optimize your position. Look at your resources as an investment. Would I invest in this account if I knew I was vulnerable to a low probability of return? One of my machine tool distributors built a $500,000 state of the art demo room. The first month, they were ecstatic with the activity it generated. Unfortunately, they soon realized that salespeople booked the room with tire kickers and their two top producing salespeople couldn’t schedule their two best accounts in for that month. Granted, they sold them the next month, but it did increase their cost of sales because their salespeople were not utilizing their leverage.

Salespeople should guard their resources not because they are good corporate citizens concerned with costing the company money, rather they should guard their resources because it is their control and leverage point in the sale. Salespeople should adopt an owner mentality because if they allocate their resources wisely and accordingly, it will personally make them more productive and efficient. Ironically, what is good for the goose is good for the gander.

One should have a desirability matrix to use on all prospects who are tapping your company’s resources: do they qualify for your resources and what is the likelihood of a positive return on that investment?

Self-Concept/Confidence. One’s self-concept is one of the most important assets salespeople need to guard and protect. Without confidence and a healthy self-esteem, the other four assets predictably will be severely neutralized.

Salespeople will generate results at a level consistent to their own self-worth. In sales, your self-worth is controlled and defined in part by your own rejection/success ratio and the resulting thought process that follows it. One is easier to control and manage than the other.

The only way to manage rejection is to be more discerning and discriminating as to whom you make an offering. Rejection would play a lesser role in sales if salespeople were far savvier about pursuing high percentage business, in lieu of pie in the sky opportunities. Salespeople who adopt a business owner mentality always factor in their self-worth, passion and emotional expense when assessing the viability of deals.

The need for approval can be very devastating to one’s self-esteem. Salespeople with a high need for approval set themselves up for high levels of rejection because they are unwilling to risk the approval of their prospects by asking tough questions. They tend to get used and reduced to free consultants. Be aware that no one can give you approval but yourself. Ironically, seeking approval from others prevents us from recognizing and experiencing it in ourselves.

The greatest boost to one’s self-esteem is to have no emotional investment in the outcome of the sale. Salespeople who aren’t attached to the outcome of the sale tend to have shorter selling cycles and experience moderate rejection.