Setting sale: is your business anchored down by a stale sales plan? Learn how to navigate the 5 biggest sales challenges facing entrepreneurs today, and get back on course

Entrepreneur, August, 2004 by Chris Penttila

Salespeople find they have to create a layer of value around their offering through added service, best practices and superior industry knowledge. This is what keeps products and services from becoming just another commodity in the eyes of the prospect, says Dave Stein, founder of Mahopac, New York, sales consulting firm The Stein Advantage and author of How Winners Sell: 21 Proven Strategies to Outsell Your Competition and Win the Big Sale. "Customers aren't playing golf these days; they're playing hardball," he says. "A product or service is just a medium to deliver value to the customer."

To maintain loyalty, G2 Safety's sales team is selling a program where customers accumulate points toward new purchases for each dollar they spend. "We want to reward companies for buying from us," says Johnson.

Reese believes entrepreneurial firms should break their business into three "loyalty buckets": the business they're getting from existing customers, the business they're getting from new customers, and the customers that are defecting. Understanding what drives each group is key to selling. "Always have a road map of their issues," Reese says. "Clearly communicate [how] you'll improve your offering to their company."

"Going vertical"--separating sales territories by industry rather than geography so each salesperson truly understands the threats, challenges, risks and opportunities facing a particular market segment--is another way smart companies are generating loyalty. "Initially, it seems to be more cost-effective if you have a geographical orientation," Stein says. "But if [salespeople] are taught to leverage industry knowledge, the net result is a much higher increase in profit per customer, a high level of credibility, and less reliance on discounts and special deals."

SALES CHALLENGE No. 4:

INCREASING MARGINS

Selling used to be about telling prospects how they'll increase revenue; today it s about showing them how a product or service will save them money. The Miller Heiman study found that 66 percent of respondents believe buyers want discounts before they'll make a purchase. "Buyers are tending to keep their eye on pricing more than once or twice per year," Johnson says.

Successful sales teams are breaking the discount habit through better service that allows them to offer premium pricing. They're bypassing prospects that demand huge price breaks and going for those more likely to appreciate quality service at a slightly higher price. "You'll have fatter margins that feed your business and allow you to get better customers who are more loyal," Trailer says.

ATA Services has increased its margins by incorporating value-added services into its bidding process, such as cleaning and polishing ATM machines for clients. "In our early sales process, the only thing we were selling is what we could cut the price [of]," Robson says. "Now we try not to cut the price, [but to] add more value." The result: ATA's profit margin is predicted to grow by almost 40 percent this year.