Brokerage Ops the October 2012 issue

Strategic Selling

Grow where you are planted and keep the sales pipeline full.
By Mike Turpin Posted on October 11, 2012

He wore thick, Coke-bottle glasses, and his tendency to stare at you after asking a question could give you the creeps. I took one look at the guy and protested.

My boss was resolute. “Just point him in the direction you want to go,” the boss said, “and make sure he does not buy back the vacuum once you sell it.”

Warren had a simple system. He would research a target firm—its ownership and financial structure, industry, marquee clients, current broker, and names of the current CFO and HR managers and then write a standard pre-approach letter. Warren would forward his letter, wait three days and then follow up with a relentless set of phone solicitations that might today be considered stalking. I rolled my eyes.

To my amazement, week after week, Warren secured appointments for our team. Over the course of a three-year period, we organically grew our business 40% compounded. At any given time, Warren had more than 100 pre-approach letters in process.

Prior to being teamed with Warren, we had struggled as a young team. We were smart but unconnected consultants in a community where small agency relationships reigned supreme. We sold opportunistically and by one degree of separation. If someone knew someone who knew a risk manager, CFO or HR leader, we would try to leverage our center of influence to get an introduction. The client could be a start-up with two people or a $1 billion multinational. It was all about the relationship and a warm lead more than our value proposition.

When we had sales meetings, we asked our producers whom they were calling on instead of telling them whom they needed to target. We had low appointment activity from our veteran producers, who argued that an insurance sale was based on a relationship. Our close rates were low because we did not pre-qualify our prospects. We never prepared for a first appointment.

When we finally looked at the business we had written, it was a dog’s breakfast of clients of all sizes, industries, geographies and income levels. Structure was driving strategy, and our failure to strategically sell was contributing to weaker margins, inferior sales and higher lost business.

We finally came to understand that the art of organic growth began with strategic selling: understanding our strengths, weaknesses, target market, value proposition, competition and cost structure. We could then confidently price services to win business but also support operating margins. To pivot to strategic selling, we had to improve each phase of a four-part sales cycle of initiation, development, closing and service.

Initiation Strategic selling is about making the calls and getting your message out. Relationship- and referral-based selling is not enough to survive in a market where shrink, fierce competition and lost business require 15% growth or better to drive positive organic growth. The best prospects are in your target market and live within a two-hour drive of your office. Grow where you are planted.

Development “Playing the mood music” is an art form of rapport building with multiple decision makers inside a prospect. Strategic selling is a protracted process of relationship building with user-buyers, professional buyers and economic buyers. It is about seeking to understand the client’s business.

Closing Moving from dialogue to decision is a skill. Many buyers are amiable personalities who have a difficult time with tough decisions. A strategic sales organization has the discipline not to give away intellectual capital without getting the commitment that a change will occur if ideas and savings are compelling and anchored in fact.

Service Sticking to your value proposition and profit model is essential to consistently delivering your services. You need to know your cost of doing business and be sure your account management teams can cash the checks being written by your sales professionals.

When a firm is posting negative organic growth, it’s usually because one or more links in the sales and customer-retention cycle are weak or broken. Larger consulting houses employ myriad technicians who love to develop, close and service but who believe initiation is developing someone else’s relationship. Smaller firms are more successful in opening doors but often have not refined their value proposition enough to consistently convince buyers that they can handle their business.

The successful firms of the future will indeed grow where they are planted. They will aggressively target their market, specialize in industry and product verticals, and deploy a sales force that doesn’t view customer relationship management systems as Big Brother but as an essential process to balance the volume of activity needed to keep pipelines full and new business flowing. The days of long lunches are being supplanted by fiduciaries who hire and fire based on who provides value. The winners will embrace strategic selling while the losers will wax nostalgic about the good old days.

Mike Turpin EVP & Managing Consultant, USI Insurance Services Read More

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