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Sales – The Art and Science

Sales – The Art and Science

by Jeff Farrington

It took me years to realize that I was a salesperson. Let’s face it, the connotation is not the best. Imagery is of a guy in a fedora peddling insurance at your door, or at least that’s what my mom thought of when I started my career.

At one point about six years into my career I had a new boss, who eventually became my best mentor. His name is Mike and he asked me if I’d start doing some of the corporate sales training for new associates. I responded that I’m not a very good salesperson – those people are aggressive and the life of the party, I’m more analytical and just want to help people. He chuckled, which was about the most emotion you could get out of this former CPA turned Division President of a billion-dollar organization, and Mike said; exactly – you’re one of the top performers in the company because you listen and want to solve their issues. Now learn to teach that to others. Books have been written on the subject and training can be days in length. With this brief article I hope to impart some of what I’ve learned along the way.

Some People Just Seem to “Get It”

Before I start with the science versus art debate, let’s address the most important component of the process – the human that is delving into the world of B2B sales. I believe finding the right person is imperative for success. Along the way, the following attributes have been identified in those successful people. You’ll notice “life of the party” is not one of them!


First and foremost, the person should be intuitive. Some people just seem to “get it”, while others will follow training and processes and never reach the pinnacle. That trait is intuition. Knowing how to approach a person or situation, or “reading” them. The Meyers-Briggs test is the best I’ve found at identifying that in candidates. Other traits of success would be someone that works hard, has integrity and instills confidence and trust in the person they’re selling to.

The Science – And a Bit of Math Too

Now let’s transition to the Science aspect of selling. The science or structure portion is more so in the pre-meeting stage. For instance; are you fishing in the right pond? Are you calling with the right amount of frequency? Are you developing the right volume? For instance, you can’t hit 30 home runs if you only take 20 at-bats. In fact, know your numbers. If you need 20 at-bats to hit a home run, you better have 600 at-bats to reach your goal. The old adage is that 80 percent of sales comes from 20 percent of your clients. What is often forgotten is that those 20 percent of decision makers that we call “A” accounts can and often do change. You still need the “B” and “C” accounts to develop into “A” accounts, as your best clients will transition off at times. Just call on the Bs and Cs less frequently.

It’s All in the Details

Finally, do you document and follow up as needed. It’s hard to instill confidence with your client if you allow items to fall through the cracks. Appointments missed, follow-up items not done as promised – all signs of a person that doesn’t take their profession seriously.

The Art – Asking the Right Questions

The client or referral partner meeting is one that could be labeled as the art of selling. For instance, are you asking the right questions? Are you listening for signals of the direction they want the conversation to go, or are you just waiting for the next opening to say your next piece you learned to say? In my training sessions I often would put several buying signals into a role play. It was up to the new associates, both those doing the role play as well as those in the audience to point out the signals as part of the exercise. Likewise, have you identified the “pain point” in the prospect. The old saying of selling a refrigerator to an Eskimo went out 60 years ago. It’s better to find out if they have an issue and identifying a tool in your toolbox to solve their issue. The difficult part is clarifying their intentions. Many of us seem to be built to avoid conflict, especially people that are amiable in nature. To assist in bringing their thoughts or intentions to the surface there are multiple techniques. Some use an up-front contract. Meaning, you discuss ahead of time that if X happens, the next step is Y and you ask for their approval of that up-front. Another method is the trial close. You’re not closing on the final objective, but instead you’re testing the waters along the way. For instance, ask the prospect if they can see the benefit of X happening. Either way, if you can’t solve their issue, it’s better to refer them to a resource that can solve their issue.

At the end of the day, we are not in the business of selling; we are in the business of solving. Remember – it’s always about them, not about us. Good luck and feel free to reach out to me at j.farrington@focuscfo.com, I’ll be glad to have a conversation if you think you may benefit from it.

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What is the Difference Between Prime and LIBOR Rates

What is the Difference Between Prime and LIBOR Rates?

By Tom Bartos

Many business owners may not be aware of interest rate options for business financing. Banks typically offer interest rate options in debt agreements over a certain borrowing level, which include a Prime and LIBOR option. Loans under a certain size, usually under $3-5,000,000, do not contain a LIBOR interest rate option. In debt agreements with a LIBOR and Prime interest rate option, Prime will be the default interest, and LIBOR will be the alternative interest rate
option requiring an election to use.

What is LIBOR, and how does it differ from Prime?

First, Prime interest rates are set by each bank, are tied to the U.S. Federal Funds Rate, and
remain fixed until the Federal Open Market Committee meets and changes the Federal Funds Rate. Prime is variable, but may remain fixed for a long period of time.

LIBOR is the London interbank offered rate, representing the basic rate of interest used in the lending between banks on the London interbank market, and the rates are actively traded on the open market. LIBOR is a short-term variable interest rate and the spread between LIBOR and Prime vary daily, weekly, and monthly since LIBOR is traded daily and reacts to current market events.

Benefit of Prime over LIBOR

Prime interest will be the default rate in the loan agreement, and it does not require any effort
for the business to manage. Additionally, the rate will not fluctuate and remained fixed until
the Federal Open Market Committee decides to change the Federal Funds Rate.

Benefit of LIBOR over Prime

Businesses have the ability to lock or set the LIBOR interest rate for a specific time period,
usually for 30, 60, 90, or 180 days. Therefore, the LIBOR option allows business to actively
manage its interest rate expense at little or no cost. The biggest benefit of LIBOR is this rate
option has historically and will usually be lower than the Prime rate option.

Summary

LIBOR is a nice option to have in a loan agreement, and with a little time and resources, this
option will allow business to elect a lower interest rate versus their Prime rate for a period of
time, thereby saving money over the life of the loan.

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Every Business Should Have a Professional Skeptic

Every Business Should Have a Professional Skeptic

The business model is the foundation of a successful business, and the CFO plays a critical role in building the optimal model for a company. The CFO tests the assumptions and presumptions of the business model, exercising his valuable role as professional skeptic. The CFO will look for potential improvements and enhancements, continuously looping that process periodically throughout the life of the business. The CFO helps the team place their plans and evolving culture beside the model to “defend” those plans or to realize they have moved beyond the original model and that is time to revise the model. Evolution does not justify failure to follow the model. It may call for changing the model and failure to do this is called chaos. A business model adopted and ignored is more dangerous than no model at all.

The business model is the foundation of a successful business, and the CFO plays a critical role in building the optimal model for a company. The CFO tests the assumptions and presumptions of the business model, exercising his valuable role as professional skeptic. The CFO will look for potential improvements and enhancements, continuously looping that process periodically throughout the life of the business. The CFO helps the team place their plans and evolving culture beside the model to “defend” those plans or to realize they have moved beyond the original model and that is time to revise the model. Evolution does not justify failure to follow the model. It may call for changing the model and failure to do this is called chaos. A business model adopted and ignored is more dangerous than no model at all.

Consider, a business may have a great product or service, but the business model to take the product to market must be designed and executed continuously and consistently across the organization. The CFO, with the CEO, should analyze the critical elements of the business model. This will lay the foundation of the company’s strategy and define the key tasks of the CFO going forward. According to Todd Whetstone of FocusCFO, “the CFO must have a strong understanding of the company’s business model and industry to build strategies to create additional value for the company.”

Understanding the Value Proposition

The first element to understand is the company’s value proposition – this is the heart of the business model. Is the customer’s problem being solved by the solution (product or service) the business offers in the best way possible? Are customers receiving the best possible value? The solution to the customer’s problem must also be solved as promised. In the market, the product or service may be positioned as a low-cost alternative to higher priced alternatives, or it may be positioned as superior to alternatives and come with a higher price. Either way, it must be delivered as advertised. The analysis should also consider whether the value proposition can be enhanced. Can new or better products be offered to current customers or to attract new customers?

Understanding the Revenue Model

Second, the CFO will evaluate the revenue model of the business. Pricing should be analyzed to make sure it is designed to ensure the highest revenue possible. The price may be too low based on customer demand or the prices of the competition. Conversely, it may be too high to attract more customers. The CFO will also look for additional revenue streams that can be added from offerings such as warranties, or customer support subscription plans.

Examining Costs to Bring Product to Market

Next, the CFO will comprehensively examine the costs of the company to find expenses that can be reduced, or even eliminated. This must be done in context, considering all other elements of the business model. If the company is offering a low-cost product in the market, costs of goods sold and other costs should be as low as possible, while still supporting a viable product. A higher priced product must have sufficient quality to support the price; hence higher costs to create and support the product.

Know Thy Customer

Additionally, the CFO must understand the company’s customers. Knowing who the customer segments of the business are is key to reaching them. There may be multiple segments already, and segments that can be added.

Understanding the company’s customers drives the strategies to sell and market the products, and the CFO will determine if these strategies are designed to produce the best possible ROI. For example, if sales are being made online through a third party, i.e. Amazon, would it be worthwhile in terms of costs and benefits to create a direct online sales and distribution channel? Additionally, are all potential sales channels being utilized? Can any be added, and what are the costs/benefits of doing so? These discussions can and will go on many levels.
From the analysis of these elements, a plan to improve, or even pivot the business model, can be developed to drive cash and increase the value of the business.

In summary, having a CFO who can play the role of professional skeptic will assure that the business model is well-managed and consistently applied across all departments and segments of a business. This will result in:

1) A focused team who are unanimous in their understanding and execution of the company’s methods, culture, and values.
2) Customers who are receiving consistent messaging and results.
3) A very nimble company that can quickly detect change and precisely respond to change.
4) And with adherence and constant management – efficiency will be maximized.

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